Incentive travel continues to grow, with industry professionals pointing to rising budgets and expanding incentive programmes as reasons indicating that the industry remains an important means for companies to reach business objectives, a new joint study has found.
The new study, the industry's largest research effort to date, was a joint effort by Incentive Research Foundation (IRF), Society for Incentive Travel Excellence (SITE) and Financial and Insurance Conference Professionals (FICP).
While findings show that the industry is on the rise, growth is not happening unchecked, with factors of rising costs to operate an incentive travel programme going up.
"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."
The survey collated responses from over 1,000 respondents from 80 countries. Survey respondents included incentive travel buyers and suppliers, with buyers representing incentive agencies and corporate users, while more than half of the sellers are DMCs. Of those surveyed, the majority comprise tenured industry professionals with an average of 17.3 years of experience; approximately half are located in the US with the other half outside the US.
"For 2018 we increased the number of corporate end-user respondents by a staggering 80 percent. Of these, 40 percent were from the financial and insurance industry, traditionally a big user of incentive travel, said Steve Bova, CAE, FICP Executive Director.
Expanding market share
The market demand for incentives is expanding, with more than half (54%) of buyers reporting an increase in budgets year over year and sixty-five percent (65%) indicating increases to the number of incentive programme qualifiers. The median per person spend remains stable at US$4,000, while corporate users report a higher median spend (US$4,550) versus incentive agencies (US$3,500).
Driving factors for incentives
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.
Over two-thirds of corporate users include meetings in their incentive programs (heavily weighted towards finance sector); less than a third of incentive agencies do.
While almost 70% of buyers say their programmes are effective at achieving business objectives, only a quarter always measure ROI/ROO, with more than 50% saying such measurements are not required.
Popularity grows for all-inclusives
All-inclusive destinations are on the rise particularly for incentive agencies as, for the fourth year in succession, 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 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.
The full study is due to be released during IMEX America in Las Vegas on October 15.