For every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits, according to research commissioned by the U.S. Travel Association.

The study by research firm Oxford Economics claims to establish the first clear link between business travel and business growth.

"This study shows that not all spending cuts are smart cuts," said Adam Sacks, managing director of Oxford Economics. "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."

The study says the average business in the U.S. would forfeit 17% of its profits in the first year of eliminating business travel, and it would take more than three years for profits to recover.

"Business travel is economic stimulus," said Roger Dow, CEO of the U.S. Travel Association, which commissioned the study earlier this year when companies began drastically cutting meetings and business travel.

"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."

In the first six months of 2009, business travel spending was down 12.5% and business travel volume was down more than 6%, according to the study.

If businesses increase their travel they could lead the country out of recession, according to the study, which says a 10% increase in business travel spending would increase multi-factor productivity, leading to a U.S. GDP increase between 1.5% and 2.8%.

The researchers also surveyed business executives and business travelers, whose opinions backed their findings.

"Seventy-five percent of executives stated that if their company increased business travel while their competition reduced it, they would build market share," Sacks said.

Likewise, executives said incentive travel was key to employee morale and performance and estimated they would have to increase salaries 8.5% to offset the negative implications of cancellations those trips.

"For every dollar spent on incentive travel they would have to spend four dollars in increased wages," Sacks said.