The paleontologists at Oxford Economics have apparently dug up the missing link between business travel and business growth. For every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits, according to this study.

ROI of Business Travel

The U.S. Travel Association, which commissioned the study - is pushing the results of this study as part of a joint push by industry organizations and travel companies to promote the benefits of face-to-face meetings and ‘re-launch’ business travel.

In the first six months of 2009, business travel spending is down by 12.5% and business travel volume is down more than 6%.

At the Elite Meetings Alliance conference, keynote speaker Geoff Freeman – Senior VP of Public Affairs for the U.S. Travel Assoc., said that the USTA estimates there was $1.9 billion in travel losses during January and February 2009 alone due to meeting and event cancellations – that’s not taking into account the losses to supporting businesses like restaurants and suppliers for the events.

Roger Dow, president and CEO of the U.S. Travel Association, said in a press statement that “Business travel IS economic stimulus. In order to grow, businesses have to invest. This research shows that face-to-face meetings and incentive awards to top performers are among the smartest investments companies can make.”

Adam Sacks, managing director of Oxford Economics, explained that “This study shows that not all spending cuts are smart cuts. When companies reduce their travel budgets, there are negative consequences that we can now quantify, in terms of lost revenue and profit growth, and in terms of giving competitors a distinct advantage.”

Both executives and business travelers estimate that 28 percent of current business would be lost without in-person meetings. Roughly 40 percent of prospective customers are converted to new customers with an in-person meeting, compared to 16 percent without such a meeting.

Executives cited customer meetings as having the greatest returns, approximately $15-$19.99 per dollar invested, with conference and trade show participation returns ranging from $4-$5.99 per dollar invested.

You can download the full study here (pdf file).