One reason for businesses to invest in employee travel incentives is to increase employee motivation. When there's an individual incentive to ride on a cruise or visit a beach, employees will work harder to earn the reward. Seen from this perspective, travel incentives increase business productivity and employee loyalty. Another reason why businesses should be keen to invest in travel incentives is the impact it has on their bottom line. Travel incentives have a favorable ROI and are a good long-term investment for businesses looking to increase employee loyalty. According to a report titled “The Return on Investment of U.S. Business Travel” prepared by Oxford Economics USA, incentive travel yields an ROI of more than $4:$1. This figure shows that the investment is worthwhile and profitable for businesses. The report continued to describe the benefits of travel incentives. According to the report, businesses should be cautious before cutting back on travel expenses because it may have a negative impact on their bottom line:
“This has critical implications for business leaders facing decisions about their investment in business travel. As with any cost, there are likely savings to be realized through more careful allocations of business travel. However, the evidence points to substantial risks associated with cutbacks in this particular area. And companies that continue to invest in travel, experience returns that more than warrant the investment.”
Because the ROI of travel incentives is positive, cutting down on the investment could actually cost business money. It's a short-term savings exchanged for long-term cuts in profit. There are multiple ways to look at employee travel incentives. Some businesses invest in them to keep their employees happy and show that the company values them. Other businesses have already discovered the positive ROI and want to take advantage of a good investment. If you would like more information about incentive travel, contact us.