A new report issued today at GBTA Conference 2018 - Toronto reveals the high potential of business travel to drive economic development and business success.
The report, produced by the Global Business Travel Association (GBTA), in partnership with BCD Travel and Air Canada, also reveals the risk to the nation’s economy from a downturn in travel.
The study, titled ‘The Canadian Business Travel Industry: Business Travel’s Impact on Jobs and the Canadian Economy,’ shows that business travel was responsible for about 2.6 percent ($40.1 billion) of Canadian GDP in 2016.
The economic impact study found that Canadian business travellers took a total of 35.1 million trips, up 5.7 percent from the previous year, and spent $29.4 billion on travel goods and services in Canada, up 7.3 percent. Total expenditures to support Canadian business travel reached $35.8 billion when factoring in the $6.4 billion spent on meetings operations.
The business travel industry supports 573,000 jobs and generated $10.7 billion in federal, provincial and local taxes. Much of business travel’s contribution to the economy accrues directly to industries that serve business travellers, but their supply chain beneficiaries received an additional indirect contribution of $10 billion.
“Business travel is the fuel that powers the engine of many corporations around the Canadian marketplace and is a critical driver of the economy,” said Michael W. McCormick, GBTA Executive Director and COO. “This study clearly demonstrates the importance both face-to-face interactions and enacting pro-travel polices can have on an economy’s bottom line.”
“We already knew from previous studies—and intuitively—that business travel was critical to the economic and business success; after all, how many companies can grow their business without expanding into new markets through travel?” said Kathy Bedell, BCD Travel SVP and Canada General Manager. “Sometimes it’s important to establish key drivers using data so that everyone interested in economic development and business success understands its potential to provide a return on investment.”
“Air linkages are a crucial driver of economic activity, allowing the movement of people and goods. At Air Canada we are intensely focused on expanding our network, especially internationally, and improving connectivity at our major hubs to facilitate traffic flows. This report underscores that we all benefit from an air transport system that is efficient and cost competitive in terms of taxes and fees for the airlines that operate this vital service,” said Duncan Bureau, Vice President, Global Sales, at Air Canada.
Breaking Down the Business Trip
In 2016, the average amount spent per business trip reached $838, including $342 on transportation, $215 on lodging and accommodations, $159 on food and beverages, $105 on retail purchases and $17 on recreation. These averages include both domestic and international inbound trips, as well as both day and overnight trips. Group business travellers on average spent $1,191 per trip, compared with $628 per trip spent by their transient counterparts. Group business travel was a key driver in the overall growth in Canadian business travel activity in 2016 with gains of 14 percent in total spending over 2015 levels.
Over three-quarters (77 percent) of Canadian business trips were taken for transient purposes (sales trips, client services, government and military travel and travel for construction or repair), while 23 percent were taken for group travel purposes. On average, business trips lasted only 2 days in 2016 and over two-thirds of domestic business trips were day trips while only 4 percent included a stay greater than 5 nights.
The full study also examines the most popular mode of transportation among Canadian business travellers, the most popular business destinations for domestic and international inbound trips and the demographics of Canadian business travellers.