Weather Disaster + Business Travel: Dangerous, Disruptive and Costly

Business Travel Could See Losses of Over 500,000 Trips and $600 million

ALEXANDRIA, Va., Nov. 28, 2011 /PRNewswire-USNewswire/ -- On the heels of Hurricane Irene and a freakishly early fall snowstorm, and with the impending onslaught of severe winter storms, the Global Business Travel Association has quantified the impact of major weather events on business travel. The research uses GBTA's Business Travel Quarterly (BTQ) methodology to determine how a theoretical Category-3 hurricane on the East Coast would impact the business travel industry. The results can be applied to any significant weather event that leads to widespread shutdowns and canceled travel plans, such as East Coast snowstorms.

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Business travel is a major driving force in the economy and disruptions in business travel will have wide-ranging repercussions.  In this situation, business travel would initially lose about 514,000 trips and $606 million in spending due to storm related cancellations.  This report also predicts that:

• Interrupted business trips would result in a total GDP loss of about $675 million
• Lost federal, state and local tax revenues of $176 million

In addition, GBTA Foundation's "ROI Refresh: Travel as a Competitive Advantage" report directly links business travel activity with top-line revenue:

• On average, each U.S. business trip is correlated with about $56,000 in sales.
• Therefore, this hypothetical storm would cause an interruption of approximately $32 billion to top-line corporate revenue.
• While it is important to note that most of this would be recouped from rescheduled trips, some would be lost entirely.

"Hurricane Irene was a major wake-up call for the business travel community," said Joe Bates, GBTA Foundation senior director of research. "The impacts of a more severe East Coast storm of any kind may be frightening to contemplate, but vital to consider.  Corporate travel programs must be prepared to deal with the monumentally disruptive impact of a storm like this, and all players in the travel industry, including airlines, hotels, and airports, need to build this kind of thinking into their contingency planning activities." 

The eleven East Coast states in the path of the scenario storm suffered an average business travel spending loss of $58 million per day. They ranged from a low of $11 million per day in Delaware to a high of $157 million per day in New York. 

Lost business trips would average about 55,400 per day.  This varies broadly across GBTA's 11-state scenario as well.  Delaware would lose about 9,400 per day while New York would see an interruption of about 133,000 per day.

About The Business Travel Quarterly Outlook
The Business Travel Quarterly Outlook uses an econometric model to better inform the forecast process.  The model explicitly relates measures of business trip volume and spending, sourced from D.K. Shifflet & Associates to key economic and market drivers of business travel including: U.S. Gross Domestic Product (GDP) and its components, U.S. Corporate Profits and Cash Flow, U.S. Employment & Unemployment, ISM Business Sentiment Index, Key Travel Components of CPI (airfare, lodging, food away from home, rental cars, fuel, transportation), among other components.

This report is free of charge to all GBTA Members (gbta.org/foundation/resourcelibrary). Non-members may purchase the report through the GBTA Foundation at [email protected]. Members of the media seeking report details should contact GBTA Communications at [email protected].

About the GBTA Foundation
The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world's premier business travel and corporate meetings organization.

Collectively, GBTA's 5,000-plus members manage over $340 billion of global business travel and meetings expenditures annually. GBTA provides its network of 17,000 business and government travel and meetings managers, as well as travel service providers, with networking events, news, education & professional development, research, and advocacy. The foundation was established in 1997 to support GBTA's members and the industry as a whole. As the leading education and research foundation in the business travel industry, the GBTA Foundation seeks to fund initiatives to advance the business travel profession. The GBTA Foundation is a 501(c)(3) nonprofit organization. For more information, see gbta.org and gbtafoundation.org.

SOURCE Global Business Travel Association

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