Calculating ROI for business travel

Determining whether a business trip is worth the expense can seem like a vague endeavor. But Scott Gillespie, founder and CEO of travel consulting business tClara, presents a framework and guidance for the industry on assigning monetary value to business travel in his new white paper “The Justified Business Trip.”

C-suite executives are frustrated by the lack of credible data on which to base their travel budgeting decisions, and travel budget managers struggle to defend their decisions about who gets to travel and why, Gillespie wrote.

“The root cause of these problems is clear: It’s the lack of meaningful data about a business trip’s value,” Gillespie wrote. “We can – and should – estimate every trip’s expected ROI [return on investment] before the trip is taken.”

Gillespie said that his “justified business trip framework” reveals each trip’s expected ROI, ties trips to business goals and shows the travel budget’s strategic impact. The paper was based on tClara’s survey of 407 United States-based business travelers conducted in fall 2022. Respondents were asked in detail about their last business trip.

In one “call to action,” Gillespie wrote that online travel booking tools should enable “pre- and post-trip assessment questions” to determine a trip’s net expected value, ROI, justification rating and value rating. Online tools should also “enable dynamic configurations of advanced pre-trip assessments” to identify and avoid low-value trips.

“The justified business trip framework solves a long-standing problem – what’s the value of taking this trip?” Gillespie said.

A separate survey of business travelers found that concerns about travel disruptions – including flight delays and cancellations, long security lines, crowded airports or long bag check lines – has somewhat (41%) or greatly (9%) reduced their willingness to travel for work.

The poll was conducted by the Global Business Travel Association, a trade group.

Travel managers most frequently hear business traveler complaints from employees about delayed (76%) or canceled (72%) flights, long call wait times with travel management companies (62%) or travel suppliers (52%) and poor hotel service quality (46%), according to the GBTA survey.

Travel buyers estimate their companies’ current domestic business travel bookings have returned to 72% of 2019 pre-pandemic levels, up from 67% in GBTA’s January poll. Travel buyers estimate their international bookings have recovered to 63% (up from 54% in January), and their current spending is back to 66% (up from 58%).

GBTA’s survey results were based on 803 responses gathered from April 10-21 from across North America, Europe, Latin America and Asia-Pacific.