Air drying of hands is not as effective in providing hygiene as paper towels.
Not only do air blowers take longer than restroom users are willing to invest to achieve hands that feel dry and don't pass germs. At the same time, aerosols and sprays created by the forced air (and water shaken from hands) create increased cleaning costs to keep up with the splatters onto walls and floors. That same dispersal of water, sprays and germs is a threat to hygiene, providing a means for germs to cross-contaminate throughout large sections of the restroom and even onto clothes of nearby restroom users.
This need for additional cleaning is one of the considerable hidden costs not only to budgets, but to restroom imagery that forced-air dryers cause.
Because 95% of cleaning expense is in people, and 5% in supplies, increases in restroom cleaning labor are significant, even before electrical and initial investments in equipment and remodeling are considered. Basically, people - a part of the 95% - cost well more than paper - a part of the 5%. When you add to cleaning requirements by making things dirtier, you increase your people costs which are the lion's share of your budget. (Like Mom said, don't be penny wise, pound foolish. Mom must have been from England.)
But there is even a more fundamental problem with blowing moisture off your hands. The moisture getting blasted into the air and onto walls, floors and people has germs in it. Laboratory experiments have shown even standard blow dryers distribute bacteria onto users and throughout a 3-foot range of the dryer. Paper towels on the other hand, are part of the cleaning process and are shown to help reduce bacteria counts on hands and do not re-distribute bacteria, but instead help to contain and dispose of safely. [D]
"The dispersal of bacteria...was found within a radius of approximately 3 ft from hot air dryers and to the investigator's laboratory coat. When paper towels were used for hand drying, no dispersal of bacteria was found." - Mayo Clinic in reference to Ngeow, et al, study. [D]
From PUR-O-ZONE's observations and experience - and keeping in mind that we carry a wide range of air drying devices - air dryers of all kinds are messy and contribute to dirty conditions. And, not to put too fine a point on it, hardly anyone who uses your restrooms is going to be pleased. That means you will have a reduction in handwashing. Why? Restroom users - that's all of us - dislike the thought of using even the most advanced new dryers.
- Even the strongest hot air drying units only damp-dry hands in 10-12 seconds, 40 seconds is likely. Jet-dryer manufacturers have claimed their electrically powered units are equivalent to towels. Studies done in response found most users did not feel their hands were dry after 10-12 seconds under the jet blower and in fact averaged over 20 seconds, at which time, they still felt damp. The same study (as well as those conducted by an Australian university study) showed paper does the job needed in just 10 seconds. [C]
- Single-serve towels reduce hand moisture to only 4% in 10 seconds.
- Dryers create longer lines in busy restrooms, because only one person can dry per blower at once. With paper, users take their towel and generally step back, allowing others to dry.
- Research shows hygiene factors are in favor of paper,  which provides part of the cleaning process. Dry hands are more germ-free. Damp hands support and pass more diseases.
- Because of dryer avoidance, more users walk away from restrooms without washing their hands at all than when paper towels are available.
- People have learned to open doors with the towel and then toss the towel in the trash. Opening the door with a handle wet from semi-dry hands gives most people the heebie-geebies.
- Pathogens (germs) can become aerosolized by air-blasting methods.  Aerosolized droplets can be spread throughout the restroom, something also proven to occur in toilet-flushing studies. 
- Pathogens can grow inside parts of air dryers (see picture above).
- Users often shake wet hands to improve their chances dryer hands. The messes from splattering increase restroom labor, the biggest cost in any cleaning budget.
- Increased drips onto flooring equates to increased slip and fall risks [A].
- Restroom imagery suffers. Users consider air dryers an inconvenience for them designed to save money for the building operator.
Studies regarding the green footprint of paper vs. air drying have been released advising in both directions. Unfortunately, most of these studies are funded by parties already positive toward one method of drying or the other. According to Sierra Club's Ask Mr. Green, "MIT’s recent cradle-to-grave comparison of drying methods gives paper towels a slightly better grade than dryers," except for the two most efficient dryers. A Dutch study found basic parity between hand dryers and paper towels when all factors were taken into consideration. 
Cost factors blower manufacturers sometimes omit