Landmark incentive travel study shows increased spending, shifting priorities

SITE, IRF and FICP publish their second annual joint report, the largest ever for the industry

Incentive budgets have continued to climb, with over 47% of companies indicating increased spend for 2020. (Kate_Koreneva/Getty Images)
Incentive budgets have continued to climb, with over 47% of companies indicating increased spend for 2020. (Kate_Koreneva/Getty Images)

North America - Companies are spending more money on incentive travel in 2019 than they did in 2018, and they are shifting their program priorities from emotional concerns like destination appeal to practical ones like infrastructure.

So finds the newly released 2019 edition of the Incentive Travel Industry Index, which was published jointly last week by the Society for Incentive Travel Excellence, the Incentive Research Foundation, and Financial and Insurance Conference Professionals. This second annual study is the largest ever undertaken by and of the incentive travel industry.

"Following last year's hugely successful inaugural joint study, we wanted to increase responses, both numerically and geographically, so as to ensure deep penetration into the universe of incentive travel," said SITE CEO Didier Scaillet. "We received a total of 2,600 submissions from over 100 destinations around the world, almost triple the number received in 2018."

Companies in this year's study indicated a clear trend toward increased spending: Last year, data shows incentive travel budgets increased for 37 percent of firms. This year, budgets have increased for 43 percent. And next year, budgets are expected to increase for over 53 percent.

Likewise, spending per person in incentive travel programs increased for approximately 30 percent of companies last year and for approximately 42 percent this year. Next year, spend is expected to increase for over 47 percent of firms. On average, total spend on incentive travel per person at US companies was US$4,000 in 2018 and is US$4,260 in 2019.

Participation in incentive programs also is growing, with 52 percent of companies reporting an increase in the number of incentive travel qualifiers this year compared to approximately 33 percent of companies that saw an increase in qualifiers last year.

In terms of priorities, most companies this year have spent the largest chunk of their incentive travel budgets on hotels; last year, most spending went toward airfare.

Hotels are just as important qualitatively as they are quantitatively, according to survey respondents, who ranked infrastructure (e.g. incentive-quality hotels) as the most important consideration when selecting an incentive travel destination. That was followed by safety and appeal of destination (appeal fell from first place in 2018 to third place in 2019).

The study also explored topics such as spending on destination management companies, supplier choice and incentive travel business objectives. Of the latter, survey respondents said increased sales and profits are most important but also acknowledged other key ancillary benefits.

"Beyond the hard dollar outcomes, we're finding soft-power objectives like engagement, relationship building and company culture emerging stronger," said IRF vice president of content Andy Schwarz. "And the primacy of the 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."

The entire Incentive Travel Industry Index is available for complimentary download from SITE's website.

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