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What Bad Weather Costs the Travel Industry

November 28, 2011 By: George Dooley Travel Agent

With the impending onslaught of severe winter storms - and on the heels of Hurricane Irene and a freakishly early fall snowstorm - the Global Business Travel Association (GBTA) has quantified the impact of major weather events on business travel. One conclusion: bad weather is costly.

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, GBTA says.

Business travel is a major driving force in the economy and disruptions in business travel will have wide-ranging repercussions, GBTA says. In this situation, business travel would initially lose about 514,000 trips and $606 million in spending due to storm-related cancellations. The report also predicts that interrupted business trips would result in a total GDP loss of about $675 million and that lost federal, state and local tax revenues could total $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. 


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About the Author

George Dooley
George Dooley, Travel Agent’s senior contributing editor covering retail and technology, has a long-standing reputation as one of the top travel industry journalists. He notes...

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By George Dooley | November 28, 2011
Hurricane Irene was a major wake-up call for the business travel community, the Global Business Travel Association (GBTA) says.
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