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Pulse Study: Spring 2011 Research Brief
To download this research brief, click here.
To download the full Spring 2011 pulse study click here.
To download the press release click here.
FOREWARD
For over four years the Incentive Research Foundation has been capturing and cataloging changes in travel and merchandise travel trends. The tumultuous nature of these past four years for providers and managers of recognition and incentive programs has been highly reflected in the data. Interestingly, in the spring of 2011, many of these trends have begun to stabilize providing a more solid picture of what is often deemed “the new normal”. The general outlook for both merchandise and travel have moved from negative or flat, to slightly positive with an underlying current of normalization and optimization. An overview of these trends is outlined below.
DRIVERS OF PROGRAM PLANNING
Throughout the downturn, the IRF has been keenly interested in what marketplace drivers are having an impact on suppliers and managers’ ability to design and implement incentive programs; these include the company’s financial forecast, competitor’s reactions, and sensitivity to program extravagance. Compared to the previous four survey periods (which indicated a strong positive upward trend for each of the core issues beginning in July 2009) fi ndings in the spring of 2011 indicate that these factors have all finally declined.
In sum, the general *sensitivity of programs to outside forces has started fi nally to decline a bit. Sensitivity to company forecast has dropped BELOW pre-recession levels as has sensitivity to competitor reactions. This is most likely due to better con fidence in forecasts and less volatility in the marketplace. Of important note, however, sensitivity to extravagance has stayed the same since the last survey with 64% agreeing it impacts their program decisions, pointing toward a fi nal resting place in the new normal.
INCENTIVE TRAVEL TRENDS
Overall, the economy’s impact on program planners’ ability to implement incentive travel programs is stabilizing with about 66% saying that the economy has either no impact or a positive impact. Still, a full quarter of respondents view the economy as having a slight or very negative impact on their programs. Similar to last fall, 41% of respondents in Spring 2011 expect their incentive travel budget to slightly increase and 38% expect it to remain unchanged. This means that the vast majority (almost 80%) of planners are looking toward a positive 2012.
Likewise, as we saw last fall, over 50% of program planners said they would not be changing their destination choice. About a quarter said they will be moving from an international to a domestic location and a little over 10% will be moving back to an international destination.
Involvement by procurement is beginning to normalize as well with over 50% in Spring 2011 seeing no change or only a slight decrease in procurement’s involvement, signi ficantly diff erent from last fall when 64% of respondents saw an increase in procurement’s involvement. We reported last fall that the vast majority of respondents were not expecting any great move from group to individual travel and this holds true for the spring of 2011 as well; 65% of respondents said they do not anticipate any movement toward individual travel this spring. Twenty-nine percent saw a slight or signi ficant increase.
Despite the normalization in a number of indicators, there still remains some movement in planners’ e fforts to optimize their programs, including the air, accommodation and non-meal components.
There was a signifi cant drop from last fall in the number of respondents who are including all costs for air transfer in their programs (from 43% to 22% respectively) and a slight drop in the respondents saying they will include round trip airport transfers (from 43 to 35%). Last fall over 40% said they would reduce the number of days/nights in their program, and while it has dropped signi cantly there were still over a quarter of respondents who reported reducing the number of nights this spring. Additionally, 26% of respondents indicated that sponsored non-meal related components will be reduced to some degree. However, an equal percentage indicated some degree of increase in sponsorship of these components.
MERCHANDISE TRENDS
Merchandise incentive programs appear to be on the mend. Over 50% of respondents view the economy as having no impact or a positive impact on the implementation of merchandise programs. As we saw last fall, 75% expect their merchandise incentive budgets to remain unchanged or to slightly increase.
Although 23% indicate no change to the merchandise noncash incentive program this year, 22% of respondents anticipated “Increased use of debit/gift cards” as an award selection with regards to Merchandise Non-Cash Incentive programs.
FUTURE TRENDS
Looking forward, corporate social responsibility and integration with sales management tools seem to be strong opportunities for
program advancement. One in four respondents indicated that they now use a CSR component in their incentive programs and
one in ve indicated that they have integrated their program with other Sales Management Tools.
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