GBTA held another informative webinar on Tuesday, May 29 highlighting the results of a study compiled by Rockport Analytics on the economic impact of business travel in Canada. The webinar also featured representatives from Air Canada and BCD Travel, the study's sponsors. The following are my observations and takeaways from the webinar.
Rockport Analytics developed a model to estimate business travel expenditure for 2016 as this is the last year for which full data sets are available. Data sources include:
- GBTA's BTI Global Outlook - This is an exhaustive study of business travel, productivity and growth published by GBTA since 2009.
- Statistics Canada's Travel Survey of Residents of Canada (TSRC) - Published every quarter, this is a major source of data used to measure the volume, characteristics and economic impact of domestic travel. The survey is comprehensive and covers aspects of travel including origin, destination, duration, type of accommodation, mode of travel etc. It's important to note that this survey covers all kinds of travel, not just business.
- Statistics Canada's International Travel Survey (ITS) - The ITS provides statistics on travellers to and from Canada. Information is collected on country of residence, reason for travel, method of transportation, trip expenses etc.
- The Economic Contribution of Meeting Activities in Canada - I was not able to find references to this, but a Google search turned up a link to the Business Events Industry Coalition of Canada (BEICC) and their Canadian Economic Impact Study Survey here. I'm unsure whether this is the
Additional notes on research methodology:
- Only spending that took place within Canada was included since this is the only portion that ultimately accrues to Canadian GDP. This makes sense; if a businessperson makes a trip between Toronto and Chicago, any expenses incurred in Chicago would not benefit the Canadian economy
- Only the impact of business-initiated travel and meetings were studied
- Estimated business spending calculated using the above data sources was then translated into GDP, jobs, wages and taxes using the IMPLAN model of the Canadian economy. IMPLAN, from what I could gather, is an input-output modeling system originally developed by the USDA Forest Service
The following is a visualization of the results of the study on trip characteristics. All data is courtesy of Rockport Analytic's research. The interactive charts were compiled using Google Data Studio.
Here's what I found interesting about the research results:
- 90% of business travel in Canada by volume is comprised of domestic trips at 31.8 million
- Ontario and Quebec account for 67% of business trip destinations by volume at 46% and 21% respectively
- Alberta accounts for 13% of business trip destination by volume, but makes up 18% of spending. Compare this to Quebec which accounts for 21% of volume but only makes up 15% of spending
- Looking at cities, I was surprised to see Edmonton hold the 2nd spot for business travel spending, behind only Toronto. Montreal is second in terms of volume, but Edmonton's average spend per trip is more than 2.5 times that of Montreal
- Edmonton's average spend per trip at $1,531, is almost 50% more than Calgary's at $1,080! Surprising, again, given the (relative) similar nature of the two cities. Certainly, Edmonton's economy has fared better than Calgary's during the oil & gas downturn and could offer a possible explanation, but I'm not sure if this alone explains the difference. I posed this question during Q&A and was pointed to length of stay as a possible factor, but that it would need to be investigated further. My theory is that because a lot of companies have their headquarters in Calgary, any business-related travel would occur outside the city and any travel spending would accrue to the destination city and not Calgary
- Even though Vancouver ranks second for average spend per trip at $1,733, Edmonton's edge in terms of volume is enough to push it over Vancouver for total spending at just over $2 billion!
- Cars and trucks make up the primary mode of transportation at 79% followed by commercial aircraft at 12% - a little surprising given Canada's vast geography. This would suggest that even for domestic trips, most business travel is regional, confirmed by the fact that 82% of business travel in Canada is less than 319 kms,
ECONOMIC IMPACT OF BUSINESS TRAVEL
The infographic below summarizes the research findings. All data is courtesy of Rockport Analytics.
Business travel forms a crucial part of overall travel and is a major benefactor to the economy. Consider that Florida - the state that recorded the second highest number of overnight stays related to business conventions and home to the nation's most visited destination, Orlando - is on a push to regain business travel spending by capitalizing on "bleisure" - business + leisure. As if 116.5 million visitors and $112 billion in spending weren't enough!
Business travel in Canada is responsible for to 2.6% of Canada's economy at a staggering $40.1 billion. Every dollar spent on business travel returns $1.12 to the Canadian economy, thanks to the multiplier effect. Furthermore, 1 in every 32 workers owes his/her job to business travel.
The webinar provided some great perspective and context to business travel and its impact. The effects are especially pronounced in a country like Canada where 90% of trips are domestic, 82% of which are under 320 kms. It was also interesting (to me, anyway) to note the disparity in spending between Edmonton and Calgary and I would have loved to dive into this in more detail.