Corporate Event News Highlights Findings Revealed In New Incentive Travel Industry Index
Nov 05, 2019
Together with research partner Oxford Economics, three industry organizations — Society for Incentive Travel Excellence, Incentive Research Foundation, and Financial and Insurance Conference Professionals — released the second annual Incentive Travel Industry Index this month.
Known as the largest-ever survey undertaken on the incentive travel industry, the 2019 edition includes data collected from 2,600 submissions from more than 100 destinations around the world. This number is almost triple the submissions received in 2018, said Didier Scaillet, CEO of SITE.
“Almost half of all responses came from corporate end-user and agency buyers, representing 15 distinct industries or sectors that typically use incentive travel as a performance-enhancement tool,” said Steve Bova, executive director of FICP.
Financial services and insurance, pharma/healthcare and information and communications technology were the top three sectors represented, with automotive a close fourth.
The goal of the survey is to develop an accurate representation of the state of the incentive industry, as well as provide a historical snapshot of where the industry is now and predictions on where it’s heading.
A group of incentive industry experts discussed the findings of the Index during a panel session on Smart Monday during IMEX America earlier this month. The panel included:
- Adam Sacks, president of Tourism Economics, an Oxford Economics company
- Allison Cooper, vice president of conference experiences at LPL Financial
- Bob Miler, president and CEO at One10
- Selina Sinclair, global managing director, Pacific World
- Soma Kim, incentive sales account director at Four Seasons Hotels & Resorts
Key Takeaways from IMEX Panelists
We’re currently in a tight labor market, which means wages are growing and the hunt for talent is tighter than ever. Employers must think strategically about rewarding talent to retain strong workers; therefore making the incentive market more important than ever. However, with talk of a potential recession, panelists stressed that incentive spending could be the first to go.
The report shows that the average spend per person is $4,000 per incentive trip, a figure that remains unchanged since 2018. (EMEA has the lowest spend of any region with an average of $2,500 per person.) Supplier revenue has increased slightly, up to $1,900 per person.
Index findings show further increases over 2018 in per-person investment. Hotel bookings, not airline costs (the outlier in 2018), capture the majority of the budget. Buyers expect a budget growth of 6 percent through 2020, likely due to more participants and a higher spend per capita; sellers are not as optimistic.
Companies are placing a stronger focus on “soft power,” defined as the non-monetary benefits of incentive program.
While the “hard dollar” numbers, such as increased sales and improved individual productivity, still top the list of reasons for incentive programs, soft power items like improved engagement, better retention and stronger relationship building are becoming more important. This confirms that the lines between quantitative and qualitative data continue to blur when reviewing ROI from an incentive program.
In addition, companies are having larger conversations with destinations and host properties about aligning their culture and objectives. It’s no longer enough to simply consider where a company wants to go and handle logistics; incentive planners are now looking for the experiential value and how to align that with the company’s goals.
Sellers are competing by offering one-of-a-kind experiences, but not just bucket-list adventures; these, too, should be in alignment with a company’s objectives. The definition of luxury is also evolving. Traditional luxury properties are dropping some of the formalities in favor of bringing in emotion and helping program participants feel more connected to their company and the brand. It’s no longer so much about experiences “that money can’t buy;” instead, buyers are looking for a connected experience that leaves participants with long-lasting takeaways that improve their work and relationships.
One surprising finding from the Index was a 9 percent reduction in share of spend going to DMCs. However, panelists were skeptical of this figure, stressing that disintermediation is happening in all businesses. Incentive planners say they continue to rely heavily on local DMCs in destinations around the world when planning programs abroad.
The Index also examined where in the world incentive programs are growing. Domestic destinations continue to be in demand, with 29 percent growth expected in the U.S. Central America, Southeast Asia and Oceania — the latter with a growth of 12 percent — are also piquing interest.
Destination infrastructure is also the top consideration in destination selection, relegating destination appeal into third position, after safety. “The primacy of human touch within the world of incentive travel is carried across many other areas of inquiry, with reputation being the leading factor influencing supplier choice — significantly more important than financial stability and value,” said Andy Schwarz, vice president of content for IRF.
Learn more about the index and download a full copy for free at siteglobal.com
Thanks to: Kelsey Ogletree, Corporate Event News
By: MC Media Group International Global Office Berlin | Editor-in-Chief Werner Kreis
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