Sales & Marketing Management: All Signs Point Up For Incentive Travel
May 23, 2019
If the size of a tradeshow an industry stages is an indication of its health, things are looking up in the meetings and incentive travel world. I
IMEX America, the annual autumn expo that brings together global meetings and incentive travel users and suppliers, notched a record 13,000-plus attendees October 16-18, 2018, in Las Vegas. The event expanded into an additional hall at the Las Vegas Sands Expo Convention Center, creating space for over 3,500 exhibitors representing 150 countries. The success of the 2018 IMEX show is not the only indicator of the meeting and travel industry’s health.
A survey of providers and buyers that was released immediately before IMEX America paints a positive picture of increased budgets, corporate programs with more participants, and high satisfaction with the results that incentive travel programs are producing.
“It’s great to see that incentive travel is alive and well and moving forward,” says Tina Gunn Weede, vice president of research and content for SITE Foundation. The Incentive Travel Industry Index is a joint effort of the Society for Incentive Travel Excellence, Incentive Research Foundation (IRF) and Financial and Insurance Conference Professionals (FICP).
A global perspective
Weede says the fact that all three organizations combined efforts adds credibility to the survey findings. “It made sense to bring together one of the largest groups that participate in incentive travel — SICP; the research arm that covers all incentives — IRF; and the go-to voice for incentive travel, which is SITE.”
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.
Key takeaways from the survey include:
Over half (54 percent) of buyers report an increase in budgets year over year.
Sixty-five percent of buyers are increasing the number of incentive program qualifiers, fueled by company growth and optimism in the economy.
• While the average per person spend remains stable at $4,000, corporate users report a higher average spend ($4,550) than incentive agencies. Hoteliers report the greatest increase (33 percent) in per person spend.
• Two-thirds of corporate users and over 80 percent of incentive agencies are taking steps toward cost management, such as using less expensive destinations (30 percent), all-inclusive destinations (26 percent), or offering less-expensive amenities.
• Sales and profitability remains the top reason to run an incentive program, but more importance is now given to building relationships between management and employees, increasing productivity and employee engagement.
Similar to 2017, the greatest majority of buyers (98 percent) say their incentive travel programs have been “very effective” or “somewhat effective” in achieving their most important objectives, although only a quarter “always measure” program results.
All-inclusive destinations are on the rise as buyers continue to seek cost reductions.
North America,the Caribbean and Western Europe remain the most popular destinations for incentive travel, with destination appeal being the top criteria for selecting one destination over another followed by safety and value for money.
Wellness, including yoga, is now an inclusion for incentive planners, and corporate social responsibility initiatives have dropped in popularity.
Increase ROI measurement
The fact that only one-fourth of incentive travel program sponsors always measure return on investment has long been a concern for industry suppliers. Weede says SITE is paving the way for improved measurement by partnering with a thought leader in ROI to create a guide that will demonstrate the methodology of ROI modeling within rewards, recognition and incentives.
“Every incentive program should be self-funding, but it’s difficult to do that if you’re not setting up some type of measurement and creating indicators of ROI. Setting up a program effectively in the beginning really determines how effective it is in the end,” she says.
She is encouraged by the fact that employees outside of sales are being included in more incentive travel programs. “This part is exciting to me. It’s important to include people who are involved in the sales process, but don’t sell, and even those meetings & travel involved in the day-to-day business who are just exceptional at what they do.”
All-inclusives cut costs
Weede, who is president of Atlanta-based Peerless Performance, a provider of reward and recognition programs, says she is witnessing the increased use of all-inclusive resorts that the survey indicates with her own business. The cost savings on food and beverage alone is an attractive element of all-inclusives. And the quality of these resorts has improved immensely, says Weede.
“All-inclusives today are different than what we had even five years ago. We now have four- and five-star all-inclusives, which didn’t exist in the past.”
Bye-bye AIG effect
The survey found that, for the most part, corporate users and suppliers of incentive travel no longer wrestle with the AIG Effect — the stigma that cast a pall over the corporate travel industry in 2009 and beyond. (The name comes from a widely publicized group retreat for independent sales reps that the finance and insurance company spent $443,000 on just days after the Federal Reserve rescued AIG with an $85 billion bailout.)
Weede says one of the biggest changes in incentive travel programs stemming from the AIG Effect has been a realization that you can create memorable experiences without blowing out the budget.
“Prior to that, programs had become so opulent, and people were spending more money without getting any additional return. There were a lot of programs happening that were considered boondoggles, but incentive travel is not a boondoggle. It gives a lift to the bottom line of the company and should be self-funding.”
Article by PAUL NOLAN, SITE
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