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IRF Spring Pulse Survey 2013

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Core Issues
Incentive Travel Trends
Merchandise/Card Trends
General Interest Trends

Background and Survey Purpose

In August 2008 the IRF decided that future Pulse Studies would  focus on the incentive industry trends outlook for the upcoming years.  This theme continues in the trends outlook for 2013. The Incentive Research Foundation (IRF) surveyed industry professionals to obtain their opinions about the more salient trends affecting the industry during 2013.  The IRF asked these professionals questions on trends with regard to incentive travel programs, merchandise non-cash programs, and budget changes forecasted for 2013.
In addition to the current topic on industry trends, the IRF tracks core issues of continuing interest to the industry including:
The extent to which company financial forecasts influence incentive programs;
The effect of competitor reactions on company incentive programs; and
Sensitivity to others’ perceptions of company incentive programs.

Research Methods

Invitations to participate in this online survey were sent to 2501 incentive providers, suppliers to the industry and corporate incentive travel buyers.  Data collection was conducted March 26th through April 5th, 2013. 
The 241 survey participants can be categorized as follows…
•Buyer (Corporate planner, Incentive Company, Program Manager) (58.9%)
•Supplier (i.e./ Hotel, Airline, DMC, Brand/Merchandise) (29.5%)

Highlights: Core Issues

•Findings indicate that the trends have stabilized this period compared to the previous four survey periods which indicated a strong positive upward trend for each of the core issues beginning in July 2009 – April 2013. The overall trends continue to remain lower than reported in 2008.
•The positive trend continues with respect to the perceptions of the company’s financial forecast influences the design and implementation of our incentive program(s) compared and the previous three survey periods.
•The perception of internal (non-incentive) stakeholders influence on the design of incentive programs decreased significantly compared with September 2012.
 

Perceived Impact of the Economy on Ability to Plan and Implement Incentive Travel Programs

•Respondents in the current survey (April 2013) indicate they are slightly more optimistic and consider the economy as having a more of a positive impact on their ability to plan and implement incentive travel programs when compared with the previous result in September 2012. (All positive 56% April 2013 vs. 43% September 2012)
•Strongly negative 5% September 2012 vs. 3% April 2013.
•All negative impacts 36% September 2012 vs. 31% April 2013.
 

Perceived Impact of the Current Air Transportation Environment of Incentive Travel Programs

•Most respondents (52%) have a negative perception of the current Air Transportation Environment and it’s impact on incentive travel plans. 
•However, the percent of “negative” responses has significantly decreased from 73% in September 2012 to 52% in April 2013.
•Significantly negative- 13% September 2012 vs. 9% April 2013.
•All negative perception- 73% September 2012 vs. 52% April 2013.

Techniques Used In Coming Year To Enhance The Air Transportation Portion Of Incentive Travel Programs

•38% anticipate that “Only tickets will be provided” as part of their program(s)
•36% indicate that “All costs for air transportation” will be provided.
•11% indicate that “Non-air options” will be included.
•10% indicate that seating upgrades will be included.
•5% indicate that “Airline club passes” will be included

Trending of Techniques Used To Enhance The Air Transportation Portion Of Incentive Travel Programs 

•The inclusion of both components continues to decrease significantly compared to the results reported in September & March 2012.

Anticipated Changes In Coming Year With Regards To  Incentive Travel Program Destinations

•Many of the respondents (39%) anticipate no change with respect to the program destinations for Incentive Travel Programs in the coming year.
•17.5% “Will pick locations closer to “home” with regards to the travel program destinations.
•16.8% indicate that they anticipate a change from “International to Domestic” with regards to the travel program destinations
 

Trending Anticipated Changes With Regards To  Incentive Travel Program Destinations

•There has been a significant decrease in the move from “International to Domestic” since 2010.
•Compared with Fall 2012, all components are trending slightly higher.
 

Anticipated Changes In Coming Year With Regards To Incentive Travel Accommodations

•21% of respondents indicate “No Change”
•12%  of respondents anticipate reducing the “Total number of days/nights to be reduced” for the accommodations portion of Incentive Travel Programs in the coming year
•10% indicate the “Number of rooms will be reduced”, and, “On-site inclusions per participant” to increase.
•9% indicate that the “Total number of rooms” will increase.

Trending Anticipated Changes With Regards To Incentive Travel Accommodations

•The “anticipated reduction” of both days and room nights continues to decrease compared to the past three survey periods.

Anticipated Changes In Coming Year With Regards To Sponsored Non-Meal Related Components

•Most respondents (52%)anticipate No Change with regards to Sponsored Non-Meal Related Components for Incentive Travel Programs in the coming year.
•34% indicated that Sponsored Non-Meal related components will be Slightly Increased
•14% indicate that Sponsored Non-Meal related components will be Reduced to some degree, and
 

Anticipated Changes In Incentive Travel Program Budgets for This Year

• Many of the respondents (45%) anticipate budgets for Incentive Travel Programs to “Remain Unchanged” this coming year.
•18% indicate that budgets for Incentive Travel Programs will decrease by some degree in the coming year.
•37% indicate that budgets for Incentive Travel Programs will slightly increase this coming year.

Trend Strategy For The Consideration Of Award Strategy Moving (Either Temporarily Or Permanently) From "Group Trips" To "Individual Travel Packages"

•The majority (73%) of the respondents do not anticipate changing (either temporarily or permanently) from "group trips" to "individual travel packages" in the coming year.
•A combined 9% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages“ in coming year to decrease.
•18% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages“ to increase in the coming year.

Geographic Region Chosen as “Destinations" for Incentive Travel Program(s). 

•42% of the respondents indicated that North America was their chosen region for Incentive Travel Destination programs.
•Top regional destinations include:
  • The Caribbean (32%)
  • Europe (31%)
  • Central America (18%)
  • South America (16%)

Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs

•In April 2013, respondents continue to anticipate the impact of the economy to have a “positive” effect on their ability to plan and implement merchandise non-cash incentive programs potentially indicating a positive trend in the coming year. 55% say the economy is having a positive impact.
•Negative impact 13% in April 2013 vs. 22% in September 2012 .
•No impact 32% in April 2013 vs. 28% in September 2012.
•Positive impact 55% in April 2013 vs. 50% in September 2013.

Anticipated Changes This Year With Regards To  Merchandise Non-cash Incentive Programs Award Selections

•31% of the respondents anticipate adding merchandise to their programs in the coming year 
•11% indicate “No change” to the merchandise non-cash incentive program this year.
•30% indicated they will include experience-related (SPA, event tickets, etc.) events
•26% indicated  they will increase the merchandise award value
•26% indicated they will increased use of debit/prepaid gift cards
•21% indicated they will include individual travel as an option

Merchandise Types Used Within Reward and Recognition Programs

•Electronics  top the award type chart, with 61% adding these into their programs
•Clothing/Apparel (49%), Golf Items (45%), and Jewelry/Watches (45%) are the next most common merchandise used in Reward and Recognition Programs.
•Other popular merchandise types identified by the respondents are:
•Luggage (44%)
•Housewares (40%)
•Open Card (40%)

Use of Points Based System for Merchandise Non-Cash Incentive Programs

•A majority (64%) of the respondents indicate they use a points based system  for their Merchandise Non-Cash Incentive program(s).
•36% indicated they do not use a points based system.
•Compared with both survey periods in 2012 results, less respondents indicate the use of a “Points Based System” for Non-Cash incentive programs as reported in April ‘13.

Anticipated Changes In Non-Cash Incentive Program Budgets for This Year

•Half (50%) of the respondents anticipate budgets for Non-Cash Incentive Programs to “Moderately Increase” this coming year.
•7% indicate that budgets for Non-Cash Incentive Programs will decrease by some degree in the coming year.
•55% indicate that budgets for Non-Cash Incentive Programs will increase by some degree in the coming year.

Anticipated Changes Incentive Program Elements

•In general, respondents indicated that they anticipate most incentive program elements to remain the same in the coming year.
•The “Number of total qualifiers” is the element that has the highest reported increase in the coming year at 47%.
•The following elements received “Increased” ratings of greater than 20% for the coming year:
•Awards budget (37%)
•Third Party/Incentive Company Involvement (29%)
•Communications Budget (22%)

Impact on Incentive Program As A Result Of The Current Economic Conditions

•55% of the respondents anticipate no changes to the budget for Incentive Programs in the coming year as a result of the recent economic conditions.
•20% indicate that that budgets for Incentive Programs have been reduced as a result of the recent economic conditions.
•16% indicate that budgets for Incentive Programs have increased as a result of the recent economic conditions.
•9% indicate no budget change, but reduced the component and added or increased a merchandise incentive program component.
•>1% (0.7%) indicate the program has been eliminated entirely as a result of the recent economic conditions. 

Impact of Budget Changes on Employee Morale

•Aside from the respondents that indicated an increase in the budget for the coming year, in general, respondents indicated that changes to their Incentive travel program will have either a “decreased impact” or “remain the same” on Employee morale. 

Impact of Budget Changes on Sales Results

•The impact of budget changes on Sales Results indicate significant differences.  For those that increased the budget 91% indicate an increase in Sales results.  Conversely, those that reduced the budget or reduced the travel incentive portion, 31% indicate that Sales Results have decreased.
 
 
 

Impact of Budget Changes on Profitability Results

•The impact of budget changes on Profitability Results indicate significant differences.  For those that increased the budget, 91% indicate an increase in Profitability results.

Use of Enhancement Tools/Techniques for Incentive Programs

•More than half of the respondents (55%) indicate they use Social Media tool/techniques to enhance their incentive program.
•39% indicate the use of CSR components.
•29% indicate that they use Integration with Sales Management Tools.
•26% indicate that they use Gaming techniques.
•26% indicate that they use a Virtual elements component.

Impact of Organizational Wellness Programs on Meetings and/or Incentive Events Planning

•Many respondents (38%) indicated that the implementation of organizational wellness programs is having “no impact at all” on the meetings and/or incentive events planning.
•21% indicated they have identified this as an issue and are looking at potential actions.
•Only 9% indicated that they are very focused on wellness and providing specific options for attendees.
•Additional comments were solicited to share details of existing wellness programs.

Role Rewards Programs Play In Uncovering, Promoting Or Commercializing Innovations In The Past 12 Months 

•Many respondents (27%) indicated that they are starting to look at an innovation strategy.
•22% indicated they have an innovation strategy in place.
•15% indicate they have a “full pipe line” and several implemented innovations.
•14% have not implemented an innovation strategy in the past 12 months.
•Additional comments were solicited to share details of existing innovation strategy programs.
 
 
 
The IRF
Incentive Research Foundation
100 Chesterfield Business Parkway
Suite 200
St. Louis, MO 63005 USA
T 314.473.5601
F 314.237.0008