A Look Inside Incentive Travel Trends
Incentive travel is on the rise, but that growth isn't happening unchecked, with costs to operate an incentive travel program also increasing. This, according to the first joint study of the global incentive travel industry, released by the Incentive Research Foundation (IRF), Society for Incentive Travel Excellence (SITE) and Financial and Insurance Conference Professionals (FICP). The study, titled "Incentive Travel Industry Index powered by SITE Index, IRF Outlook and FICP," is a landmark for the industry, providing unprecedented, consolidated insights into the current state of incentive travel and where it's headed.
"Although the findings show that incentive travel is growing, the reality is that there are counter-currents, such as rising costs, that may temper growth," said IRF President Melissa Van Dyke. "Over two-thirds of planners are taking steps to contain costs, such as less expensive destinations or less expensive amenities. Fortunately, the nature of incentive travel programs allows companies to adjust them to reflect concerns with costs."
Conducted in association with J.D. Power, the study is a wide-ranging analysis of business conditions, attitudes and expectations affecting the incentive travel and motivational events industry worldwide. With more than 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.
Survey respondents were balanced between incentive travel buyers and suppliers, with buyers representing incentive agencies and corporate users, while more than half of the sellers are DMCs. The majority are industry professionals with an average of 17.3 years of experience, and about half are located in the United States.
Key highlights from the study include:
- More than half (54 percent) of buyers report an increase in budgets year over year, with the median per-person spend remaining stable at $4,000. Corporate users report a higher median spend ($4.550) vs. incentive agencies ($3,500).
- 65 percent of buyers are increasing the number of incentive program qualifiers, fueled by company growth and optimism in the economy.
- Sales and profitability remain the top reasons to run an incentive program, but more importance is being given to building relationships between management and employees, increasing productivity and employee engagement.
- Almost 70 percent of buyers say their programs are effective at achieving business objectives. However, only a quarter always measure ROI/ROO, with more than 50 percent saying such measurements are not required.
- All-inclusive destinations are on the rise, particularly for incentive agencies as, for the fourth year in succession, buyers continue to seek cost reductions. Sellers are looking to add value through creativity, innovation and partnerships.
- North America. The Caribbean and Western Europe remain the most popular destinations for icnenitve travel, with destination appeal being the top criteria for selecting one destination over another, followed by overall safety and value for money.
- Fam trips and hosted buyer meetings are the primary sources buyers use to learn about a destination.
- Wellness, including yoga, is now a top inclusion for incentive planners as CSR initiatives drop slightly in popularity.
- More than two-thirds of corporate users include meetings in their incentive programs (heavily weighted toward the finance sector); less than a third of incentive agencies do.
Sponsors of the study include Accor Hotels; Caesars Entertainment, MotivAction, Paradisus by Melia; Eco Destination Management Services, Hilton, IMEX Group, and Peerless Performance.