LONDON--(BUSINESS WIRE)--International business travel returning to pre-financial crisis levels within the next five years will add as much as £6.5 billion to the value of UK trade according to powerful new research from Oxford Economics and the GTMC.
£6.5 billion equates to around one percent of the UK’s total trade in 2015. As trade volumes contribute to economic growth, the average international business travel air trip triggers a £34,000 contribution to GDP.
The ‘Value of International Business Travel’ report, by Oxford Economics, is a comprehensive assessment of the direct correlation between business travel and imports, exports, foreign direct investment (FDI) and productivity.
Commissioned by the GTMC – the industry body for the travel management sector – the research highlights that international business travel attracts inward FDI. An increase in business travel of one percent grows FDI by 0.3 percent, the equivalent of a £100 million boost. A return to pre-crisis levels of business travel could grow inward FDI by £1.6 billion.
Paul Wait, CEO, the GTMC, comments:
“This new research from Oxford Economics highlights that international business air travel is critical for a vibrant economy, and a strategic consideration for companies looking to grow. Furthermore, the business travel sector is a major contributor to UK trade, powering foreign direct investment, exports and imports.”
Findings of the ‘Value of International Business Travel’ report include:
- Business air travel boosts trade – a one percent increase will boost total trade by around £400 million, or 0.05 percent
- A one percent increase in business air travel increases exports by 0.05 percent, and imports by 0.03 percent - around £160 million and £125 million respectively
- Greater air connectivity also generates trade – a one percent increase increases trade by 0.09 percent, or around £600 million
- The extra trade and FDI generated from a one percent increase in international air business travel would boost productivity and increase UK GDP by £390 million
International business air travel has begun to increase, rising by 12 percent between 2010 and 2014. This followed a decline of 26 percent between 2006 and 2010.
Oxford Economics’ research has taken a macroeconomic approach to establishing how international business air travel boosts economic growth through trade, measured as a sum of exports and imports, and through FDI.