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IRF Looks Into Future of Incentive Travel
By Deborah L. Vence
A recent study by the Incentive Research Foundation showed what the future looks like for incentive travel—with the identification of 10 key trends that include changes in growth in international destinations, self-defining experiences, and new tools and strategies that include stronger partnerships and mobile tools.
The study, called "Rebounding the Recession: 10 Trends Paint A Picture of The Future of Incentive Travel 2015," revealed that although the incentive travel industry was hit hard by the recession in 2009, current indicators show a thriving $22.5 billion industry that's prepared to grow.
The following list discusses the 10 incentive travel trends indicated by the IRF:
- Positive impacts on incentive travel design. The incentive travel industry is going strong, with the 2014 IRF Pulse Survey showing that there's been a 71 percent decline in the number of organizations that believe economic conditions are having a negative impact on incentive travel programs. The survey also shows that unlike the beginning of 2009 where 86 percent of respondents found the economy to have a decidedly negative impact on incentive travel programs, in the fall of 2014, only 15 percent felt this way. On the other hand, 67 percent of those queried found the economy to have a positive impact on incentive travel, with only 19 percent neutral.
- Incentive travel budgets trending up. Nearly 50 percent of planners in the fall of 2014 said they would be increasing their budgets. Additionally, per person spend is up significantly—with an estimated average of $3,440, which represents a significant increase from additional industry studies conducted last year.
- International programs on the rebound. For the first time since the recession, more planners are considering international destinations, with the top international destination being the Caribbean. At the height of the recession, as many as 45 percent of travel planners were moving their programs from international to domestic locations. This trend shifted in the spring of 2014, with IRF research showing more planners taking their programs international than bringing them back domestically.
- Planners invest in more robust experiences. More robust experiences are desired by planners, as they enter a phase that has been called the "Experience Economy." The strategies that incentive planners used to accommodate recessionary constraints fluctuated quite a bit in 2009 and 2010, which caused a great deal of volatility in the market. From shifting lead times, to changes in property types, to transfers from land to sea options, incentive travel planners consistently looked for new ways to meet the motivational needs of their groups within budget. In this latest survey, though, fewer than 10 percent of planners said they are increasing the number of days for their programs; a little more than 13 percent of third parties will be increasing the size of their programs; and only 8 percent of corporate planners plan to increase them.
- Self-defining experiences. Planners today are looking to satisfy different age groups with venues and lodging that affords multiple options. Mixing the needs of the under-35'ers and people 45 and older will be an ongoing challenge. For people under age 35, self-defining experiences will be focused on the unusual, unattainable or exciting (i.e., Las Vegas' Suspended Dining experience 300 feet in the air.) For people over age 45, these types of experiences will center on the familiar or ordinary experiences where close connections are readily available, such as dining with old friends in a quiet venue. Mixing the needs of both of these groups will be an ongoing challenge that future planners will need to accommodate.
- An app for everything. The rise in event-specific mobile devices is pushing the limits of hotel Wi-Fi capabilities during a time when participants are using more of their own applications for access to social media sites of their own choosing. For that reason, meeting planners should explore the use of mobile devices for real-time feedback on attendees' experiences; ways to gamify the experience; and connecting event apps to social media, the report stated.
- Wellness. It's been estimated that wellness tourism accounts for about 14 percent of global tourism and roughly $440 billion in expenditures. Especially in the United States, where an aging baby boomer population (and health-conscious millennial population) continues to drive multiple health-related trends, wellness has begun to shift from a "market differentiator" to "table stakes" in most properties. While recent IRF research has shown that 30 percent of planners are putting a focus on wellness, qualitative research shows that many planners have come to expect wellness options as a basic part of their meeting options, whether they choose them or not.
- Disruption as a constant state. Natural disasters, terrorist activities, diseases and weather changes all are putting new demands on travel providers and operators. Therefore, risk mitigation is central to success. And, finding new and creative ways to mitigate such risks will be a key differentiator for incentive travel owners in the future, leading to new tools, processes and partnership dynamics. The survey stated that as the need for disaster planning extends beyond backed-up servers and redundant data to broad-based understanding and experience in managing potential issues, the IRF expects to see outsourcing and partnerships take on new meaning.
- CEOs need to attract and retain talent. For the first time, CEOs are confronted with a smaller number of people entering the job market than the number of people leaving. Incentive travel offers key retention and education benefits to address this challenge. The study indicated that short of reviewing a company's annual reports, surveys of CEOs serve as the best proxy for uncovering leading indicators of what may (or may not) drive their market investments. The PricewaterhouseCooper's CEO study in early 2014 noted that the mindset in the C-suite has shifted from "recessionary" to a focus on "innovation and growth."
- Answering the "engaged in what?" question. In the new economy, successful organizations need their employees to be engaged in new (non-core) roles. Incentive travel has been shown to be a key strategy in motivating employees to do more than just their "regular jobs." Among the concern regarding shrinking skilled labor pools is the hope of not only attracting and retaining high performers, but also building a fully engaged workforce. Answering the "engaged in what?" question, non-cash reward and recognition programs have helped create brand advocates resulting in a 35 percent increase in customer service; helped diminish the valley of despair to increase change adoption and a 63 percent increase in productivity; and created better and more profitable ideas.