Smart organizations keep an observant eye on what the market is doing and where it’s heading. If one of your growth strategies is to plan, buy and execute sales and channel incentive programs, then the recently released incentive travel industry index by the Incentive Research Foundation (IRF), Society for Incentive Travel Excellence (SITE) and the Financial and Insurance Conference Professionals (FICP) is a must read.
Conducted in association with J.D. Power earlier this year, the study is a wide-ranging analysis of business conditions, attitudes and expectations impacting the incentive travel and motivational events industry worldwide. With over 1,000 respondents from 80 countries, it is the largest survey ever conducted of senior players in the incentive travel industry—doubling responses from past individual efforts and netting new insights based on combined questioning. The five primary areas of inquiry included: Budget, Business Impact, Inclusions/Corporate Responsibility, Logistics and Destination Selection.
Following are seven key takeaways that you should know if you’re buying incentive travel.
1. Budgets are Up
The rise comes primarily from companies increasing the number of people who are eligible for the award due to positive company growth and profit. The median spend per person remains unchanged from 2017 at $4,000. And as in past years, buyers are still seeking to reduce costs while not encroaching on the quality of the travel experience. “All inclusive” properties and less expensive destinations top the buyers’ actions taken to manage costs as well as fewer inclusions, shorter programs and less expensive hotels.
2. Great Business Climate
Buyers are 8% more optimistic about the world economy than in previous years and are focusing on sales and/or profitability to be driven in part by incentive travel programs. The research showed a widely-held belief among buyers (98%) that incentive travel is an effective motivator that also has a positive outcome on the personal and professional development of the reward contenders. All this good news resulted in the majority of both buyers and sellers (58%) saying they had a more positive perception of incentive travel than they did ten years ago. And more buyers say government regulations have had no impact on their RFP’s scope of service.
3. Sick of Wellness? Don’t Be
The top two items incorporated by buyers in incentive travel programs include wellness (86%) and the inclusion of spouses/partners on the trip (96%). Wellness won the top spot with buyers looking to add classes like yoga, mindfulness or healthier meals. Somewhat surprisingly, after years of trending upwards, the research indicated that corporate and social responsibility has somewhat less emphasis by users in 2018.
Related: Younger generations are inspiring a rise in event wellness trends. Check out these ideas for incorporating wellness in your events and incentive travel programs.
4. Let’s Meet Up
Seventy-five percent (75%) of buyers include a meeting component because of business-driven requirements. There are also strategic reasons such as team building or financial reasons such as tax laws and regulatory matters. Whatever the circumstances, the majority of buyers find it smart to leverage incentive travel beyond recognition for a job well done.
5. Where to Go
North America, the Caribbean and Western Europe are the most used regions for incentive travel destinations. Geographical location of the buyer influences destination choice based on proximity. For example, 93% of North American buyers choose North America for their incentive travel program followed by the Caribbean (85%) and Western Europe (65%).
Related: Check out this guide to some of the top incentive travel destinations in the world.
6. Selecting a Destination
The top consideration for buyers is to appeal to the participant audience, followed by overall safety and the value for the money being spent. Influential sources for choosing a destination are word of mouth from within the company, recommendations from trade associations and word of mouth from outside the organization. Infrastructure within a destination has become more important in decision-making due to recent weather, geological and/or humanitarian catastrophes around the world.
7. When to Go and When to Leave
Ben Franklin didn’t have it quite right when he said, “After three days, guests and fish stink.” This study showed that a usual length of stay for participants to enjoy a truly remarkable experience is four days—five days if travel to the destination is more than four hours. (Of course, travel today is comparatively more luxurious than in Ben’s day.)
One surprise finding from this study was the fact that only one in four buyers track ROI. Among buyers who “Never or almost never” track ROI and ROO (Return on Objective), the majority (55%) says that the clients or management do not require it. Other reasons include that the program is so widely accepted that it doesn’t require ROI/ROO measurement as well as the belief the company can assess success based on an assessment of increased progress toward the program's objectives. This is a missed opportunity as there are many options available to demonstrate ROI or ROO in partnership with experienced suppliers like ITA Group.
It should be noted that buyers are still very concerned about the threat of terror groups, national political situations and airline costs which propel them to mitigate risk and ensure the safety of all their travelers. In addition, fluctuating gas and fuel prices have a direct impact on budget management and is another top concern buyers (and suppliers) contend with every day.
But the positive global economic outlook around the world presents a rosier picture than in past years. Senior leadership in many companies are changing incentive travel eligibility to allow for more winners. They’re doing this because they can see a direct correlation to higher performance, profitability and retention of star performers when well-constructed rules and exciting destinations are put in place. Plus, building better relationships between your top employees and management is just good business.
Are you ready to take your incentive travel program to the next level?
Learn actionable ways to make it happen with our list, 7 Overlooked Ways to Revamp Your Incentive Travel Program.