Highlights: Core Issues
Incentive Travel Trends
Impact of Air Transportation on Incentive Travel
Incentive Travel Destinations
Incentive Travel Accommodations
Procurement And Purchasing in Travel Incentive Programs
Incent Travel Program Budgets
“Group Trips” to “Individual Travel Packages”
Average Per Person Spend on Incentive Travel Programs
Standard Qualifying Period for Incentive Programs
Geographic Regions Chosen
Impact of Economy
Anticipated Changes to Award Selections
Merchandise Types Used Within Reward and Recognition Programs
Anticipated Changes to Budgets
Anticipated Changes Incentive Program Elements
General Issues of Interest to the Industry


 

 

Background and Survey Purpose

Beginning in August 2008 it was decided that an appropriate topic for the 2008 Pulse Survey would be an incentive industry trends outlook for the upcoming years and with the continued economic conditions, also an appropriate topic for the trends outlook for 2013.
Given that the Incentive Research Foundation (IRF) is charged with advancing the science of incentives, it surveyed industry professionals to obtain their opinions about the more salient trends affecting the industry during 2014.
To this end, the IRF asked these professionals questions on trends with regard to incentive travel programs, merchandise non-cash programs, and budget changes forecast for 2014.

In addition to the current topic on industry trends, the IRF tracks core issues of continuing interest to the industry:

  • 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 successfully delivered to 2,104 incentive providers, suppliers to the industry and corporate incentive travel buyers.
The 190 survey participants can be categorized1 as follows…

  • Corporate (i.e./ Buyer, Planner, Sales, HR) (24.2%)
  • Supplier (i.e./ Hotel, Airline, DMC, Merchandise) (19.5%)
  • Third Party (i.e./ Incentive Company, Travel Agency, Consultant) (51.6%)
  • I am not involved in incentive programs (4.7%)
Data collection was conducted July 31st through August 10th, 2015.

Highlights: Core Issues

Findings indicate that the trend is in decline this period compared to the previous survey periods which indicated a strong positive upward trend for each of the core issues beginning in July 2009 – May 2014.
The trend is in decline this survey period 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 remains similar compared with 2014.
These questions were asked only of Corporate participants.

 

1 2014 Fall Pulse

Current Topic Industry Trends for 2015/2016

  • Incentive Travel Programs
  • Merchandise Non-Cash Programs
  • ROI – Budget Considerations

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

Respondents in the current survey (Summer 2015) indicate they continue to be optimistic and consider the economy as having a  positive impact on their ability to plan and implement incentive travel programs. (All positive 61% August 2015 vs. 66.7% August 2014) 
  • Strongly negative 0% August 2015 vs. 1% August 2014.
  • All negative impacts 11% August 2015 vs. 15% August 2014.

In the coming year what impact will the economy have on your ability to plan and implement travel incentive programs? (N=158)

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

—Comparing the perceived impact of the economy on the ability to plan and implement incentive programs by respondent category, we find:
The Supplier and Third Party segments are significantly more likely to perceive the impact of the economy to have a more “positive” impact than the Corporate segment.
  • Supplier 72.4% total positive
  • Third Party 66.3% total positive.

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

Most respondents (42%) have a negative perception of the current Air Transportation Environment and it’s impact on incentive travel plans. 
The percent of “total negative” responses has decreased 9% compared to August 2015.

 

  • Significantly negative- 4% August 2015 vs. 8% August 2015.
  • All negative perception- 42% August 2015 vs. 51% August 2014.

What impact does the current air transportation environment have on your incentive travel program planning?(n=158)

—Comparing the perceived impact of the current air transportation environment on travel programs by respondent category, we find:

  • The Supplier segment is significantly more likely to perceive the impact of the air transportation environment as more “positive” (37.9%) than the Corporate segments.
  • The Third Party segment is significantly more likely to perceive the impact as “negative” (53.5%) than the Corporate.

 

Techniques Used In Coming Year To The Air Transportation Portion Of Incentive Travel Programs, What Component? 

  • 46% anticipate that “All costs for air transportation-related expenses”, are to be included components of Incentive Travel Programs in the coming year.
  • 31% indicate that “Only tickers will be provided”.
  • 11% indicate that seating upgrades will be included.
  • 8% indicate that “Non-air options” will be included.
  • 5% indicate that “Airline club passes” will be included

In the coming year, do you anticipate any of the following changes will be made with regard to choices of incentive travel programs? Check all that apply. (n=190 multiple choice)

Techniques Used In Coming Year To The Air Transportation Portion Of Incentive Travel Programs, What Component? By Category

  • —Corporate respondents are more likely to use the following techniques than the Supplier and Third Party segments:
  • All costs for air transportation will be included
  • —Third Party respondents are more likely to us “Only tickets will be provided” as a technique than both Corporate and Supplier respondents. 

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

 

  • The inclusion of “Only tickets will be provided” has decreased significantly since compared with August 2014 and the inclusion of “All costs for air transportation related expenses” continues to increase significantly- 15% since May 2014, 9% since August 2014.
Anticipated Changes In Coming Year With Regards To  Incentive Travel Program Destinations

Most of the respondents (39%) anticipate no change with respect to the program destinations for Incentive Travel Programs in the coming year.
  • 23% anticipate a change from “Domestic to International”, and,11% indicate that they anticipate a change from “International to Domestic” with regards to the travel program destinations
  • 11% “Will pick locations closer to “home” with regards to the travel program destinations.

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

  • —Most  of the Corporate and Third Party segments anticipate no changes to program destinations.
  • —Third Party and Corporate segments are more likely to anticipate no changes than the Supplier segment with regards to travel program destinations.

 

Trending Anticipated Changes With Regards To  Incentive Travel Program Destinations

There has been a significant decrease in program destinations from “International to Domestic” since 2010.
Compared with August 2014, there is a significant increase in reported program destinations from “International to Domestic”
Anticipated Changes in Coming Year with Regard To Incentive Travel Accomodations

 

14% percent of respondents anticipate a change to “Increase budget to accommodate rising F&B and Room costs” for the accommodations portion of Incentive Travel Programs in the coming year.
  • 20% indicate “No Change”
  • 13% indicate “Total number of rooms increased”
  • 9% indicate:
  • Change to “all inclusive” pricing options
  • On-site inclusions per participant  increased
  • 8% indicate:
  • Total number of days/nights increased
  • Total number of days/nights reduced

In the coming year, what changes, if any, will be made with regard to accommodations for incentive travel programs?  Check all that apply.(n=190, multiple response)

Anticipated Changes In Coming Year With Regards To  Incentive Travel Accommodations By Category

  • —Most  of the Corporate respondents anticipate no changes to program destinations.
  • —There is very little difference amongst the Corporate and 3rd Party segments with regards to changes on the upcoming year to incentive travel accommodations.
Trending Anticipated Changes In Coming Year With Regards To  Incentive Travel Accommodations

The “anticipated reduction” of both components with regards to hotel accommodations continues to decline compared to the previous survey periods.

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

Fifty-six percent (63%) of respondents anticipate No Change with regards to Sponsored Non-Meal Related Components for Incentive Travel Programs in the coming year.
  • 8% indicate that Sponsored Non-Meal related components will be Moderately Reduced, and
  • 29% indicated that Sponsored Non-Meal related components will be Moderately Increased

With regard to the sponsored (paid by your company) non-meal related components such as airline tickets, transfers, gifts, etc for  incentive travel programs, what changes  will be made in the coming year?  (n=128)

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

—Both Corporate and Third Party respondents anticipate a “moderate increase” for Sponsored Non-Meal related components.

 

Anticipated Changes With The Involvement Of Procurement And Purchasing In Travel Incentive Programs

Most of the respondents (55%) anticipate No Change with regards to involvement of procurement and purchasing for Incentive Travel Programs in the coming year, 43% agree that procurement involvement will increase by some degree in the coming year.
  • 33% indicate that procurement and purchasing involvement will “Moderately Increase” in the coming year.
  • 10% indicate that procurement and purchasing involvement will “Significantly Increase” in the coming year.

  • —Corporate respondents are more likely to anticipate the involvement of procurement and purchasing in travel incentive programs to “remain unchanged” when compared with Supplier and Third Party Respondents
  • —Supplier respondents are more likely to anticipate the involvement of procurement and purchasing in travel incentive programs to “significantly increase” when compared with the Corporate and Third Party segments.
  • —Third Party respondents are more likely to anticipate the involvement of procurement and purchasing in travel incentive programs to “moderately decrease” when compared with the Corporate and segment.

 

Anticipated Changes In Incentive Travel Program Budgets for This Year


Forty-seven percent (67%) of the respondents anticipate budgets for Incentive Travel Programs to “Slightly Increase (1-10%)” this coming year.
  • 8% indicate that budgets for Incentive Travel Programs will decrease by some degree in the coming year.
  • 26% indicate that budgets for Incentive Travel Programs will remain unchanged this coming year.

 

—Third Party and Supplier respondents anticipate travel incentive program budgets to “remain unchanged”, when compared with the Corporate segment.
—Third Party respondents anticipate that travel incentive program budgets will “slightly increase” when compared with Corporate  and Supplier respondents.

 

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

The majority (78%) of the respondents anticipate no changes (either temporarily or permanently) from "group trips" to "individual travel packages" in the coming year.
  • A combined 6% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages“ in coming year to decrease.
  • 16% 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.

 

Trend Strategy For The Consideration Of Award Strategy Moving From "Group Trips" To "Individual Travel Packages"
By Category

—Supplier respondents indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages“ to moderately decrease in the coming year when compared with the Corporate and Third Party segments.

 


Average Per Person Spend on Incentive Travel Programs

  • 30% of the respondents indicate the average spend per-person is $2001 - $3000.
  • 6% indicate that the average spend per person is $1000 - $2000.

 

Average Per Person Spend on Incentive Travel Programs
By Category

 

  • —3rd Party respondents are more likely to indicate the average spend per-person on Incentive travel programs to be between $3001 - $4000. 
  • —Corporate respondents are more likely to indicate the average spend per-person on Incentive travel programs to be between $2001 - $3000. 
—Standard Qualifying Period For Incentive Travel Programs

 

  • The majority (84%) of the respondents indicate the standard qualifying period for incentive travel programs is 12 months.
Lead Time For Booking Incentive Travel Programs

  • Most of the respondents *41%) indicate they normally have 7-12 months for booking incentive travel programs.
  • 31% of the respondents indicate they normally have 13-24 months for booking incentive travel programs.

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

50% of the respondents indicated that the Caribbean & USA was their chosen region for Incentive Travel Destination programs.
Top regional destinations include:
  • Canada (40%)
  • Europe (38%)
  • Central America (26%)
  • South America (14%)
  • ASIA (10%)

 

In the coming year, please indicate which geographic region you will choose as your "destinations" for your incentive travel program(s).  (n=181)

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

—Corporate respondents are significantly more likely to choose Mexico as the destination for incentive travel programs compared to Third Party respondents.


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

•In August 2015, 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.
  • Negative impact 5% in August 2015 vs. 8% in August 2014.
  • No impact 54% in August 2015 vs. 43% in August 2014.
  • Positive impact 40% in August 2015 vs. 48% in August 2014.
Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs
By Category
  • —Comparing the perceived impact of the economy on the ability to plan and implement Merchandise  Non-Cash incentive programs by respondent category, we find:
  • The Corporate segments are significantly more likely to perceive the impact of the economy to “have no impact” compared with both the Supplier and the Third Party segment.
  • —Both the Supplier and Third Party segment are more likely to perceive the economy to have a “positive” impact on their ability to plan and implement Merchandise  Non-Cash incentive programs

 

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

7% of the respondents anticipate “Included experience-related (SPA, event tickets, etc.)” in the coming year with regards to Non-Cash Incentive Program Award Selections

  • 17% indicate “No change” to the merchandise non-cash incentive program this year.
  • 14% indicated “Included individual travel as an option”.
  • 13% indicated “Increased merchandise award value”.
  • 10% “Increased use of debit/prepaid gift cards”.
Anticipated Changes This Year With Regards To  Merchandise Non-cash Incentive Programs Award Selections
By Category

  • —Third Party respondents are significantly more likely to anticipate the following changes to merchandise non-cash award selection than Corporate respondents:
  • Included experience-related (SPA, event tickets, etc.) as an option
  • Included individual travel as an option
  • Increased merchandise award value
  • —Corporate respondents are are significantly more likely to anticipate the following changes to merchandise non-cash award selection than Third Party respondents:
  • No Change
  • Increased use of debit/prepaid gift cards
Merchandise Types Used Within Reward and Recognition Programs
Electronics (31%) and Open Card (28%) are the most common merchandise used in Reward and Recognition Programs.
  • Other popular merchandise types identified by the respondents are:
  • Jewelry/Watches (23%)
  • Clothing/Apparel (22%)
  • Golf Items (22%)
  • Housewares (18%)
Merchandise Types Used Within Reward and Recognition Programs
By Category

—Third Party respondents are significantly more likely to use all of the listed merchandise awards, except “Plaques/Trophies” when compared with the Corporate respondents.
Use of Points Based System for Merchandise Non-Cash
Incentive Programs

A majority (71%) of the respondents indicate they use a points based system  for their Merchandise Non-Cash Incentive program(s).

  • 29% indicated they do not use a points based system
  • Compared with August 2014, slightly less respondents (-4%) indicate the use of a “Points Based System” for Non-Cash incentive programs
  • Third Party respondents are significantly more likely to use a points based system than the Corporate and Supplier respondents.
Anticipated Changes In Non-Cash Incentive Program Budgets for This Year

 

Forty-eight percent (48%) of the respondents anticipate budgets for Non-Cash Incentive Programs to “Remain unchanged” this coming year.
  • 7% indicate that budgets for Non-Cash Incentive Programs will decrease by some degree in the coming year.
  • 46% indicate that budgets for Non-Cash Incentive Programs will increase by some degree in the coming year.


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

—Comparing the anticipated changes in Non-Cash incentive program budgets by respondent category, we find that Third Party respondents are significantly more likely to anticipate “increases” in Non-Cash Incentive Program budgets 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 “Awards Budget” is the element that has the highest reported increase in the coming year at 38%.
  • The following elements received “Increased” ratings of greater than 20% for the coming year:
  • Awards budget (38%)
  • Number of total qualifiers (37%)
  • Third Party/Incentive Company involvement (23%)

Average Per Person Spend on Merchandise or Gift Card Reward Programs

Most (26%) of the respondents indicate the average spend per-person is $101 - $200.
22% indicate the average spend is $251-500.

 

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

—Comparing the anticipated changes in Non-Cash incentive program budgets by respondent category, we find that Third Party respondents are significantly more likely to anticipate “increases” in Non-Cash Incentive Program budgets 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 “Awards Budget” is the element that has the highest reported increase in the coming year at 38%.
  • The following elements received “Increased” ratings of greater than 20% for the coming year:
  • Awards budget (38%)
  • Number of total qualifiers (37%)
  • Third Party/Incentive Company involvement (23%)

 

Average Per Person Spend on Merchandise or Gift Card Reward Programs
Most (26%) of the respondents indicate the average spend per-person is $101 - $200.
22% indicate the average spend is $251-500.
Average Per Person Spend on Incentive Travel Programs
By Category

 

  • —3rd Party respondents are more likely to indicate the average spend per-person on Incentive travel programs to be between $201 - $250 compared with Corporate respondents.
  • —Corporate respondents are more likely to indicate the average spend per-person to be between $251 - $500 compared with 3rd Party respondents.

 

 



General Issues 

Of Interest to the Industry

 

Budget Changes for Incentive Program Elements

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

  • 51% of the respondents anticipate no changes to the budget for Incentive Programs in the coming year as a result of the recent economic conditions.
  • 30% indicate that budgets for Incentive Programs have increased as a result of the recent economic conditions.
  • 9% indicate that that budgets for Incentive Programs have been reduced as a result of the recent economic conditions.
  • 6% indicate no budget change, but reduced the component and added or increased a merchandise incentive program component.
  • 3% indicated no budget change, but replaced the travel incentive.

Use of Enhancement Tools/Techniques for Incentive Programs

Slightly more than half of the respondents (52%) indicate they use Social Media tool/techniques to enhance their incentive program.

 

  • 43% indicate the use of CSR components and Gaming techniques.

 

Trending of Enhancement Tools/Techniques for Incentive Programs

Most tools/techniques showed decreased use in the enhancement of incentive programs compared to August 2014.
  • Integration with Sales Management Tools and Virtual Elements decreased as enhancement tools when compared with August 2014.

 

General Perceptions of the Coming Year

The majority of respondents (74%) perceive “The Economy” to be either Slightly or Extremely positive in the coming year. 

 

  • While the outlook on the Economy is generally “positive”, 8% of the respondents also indicate a “negative” perception of the economy in the coming year.
  • In general, over 35% of the respondents perceive “Slightly Positive/Extremely Positive” views with respect to each of the areas measured.

Goals & Objectives used to Determine Incentive Payouts and Measurement of Success

The majority (89.3%) indicated that goals/objectives are used to determine incentive payouts.
  • Most respondents (54%) indicate that they use ““Participant feedback” (i.e., survey, focus groups, etc.)” to determine a programs’ success.
  • Only 5% of the respondents indicated they have no method to determine a programs success.

Primary Reason For Ending An Incentive/ Recognition Program

Thirty eight percent (38%) of the respondents indicated that they have not ended a program.

 

 

  • 23% indicated they lost executive support.
  • 20% indicated there was no budget.
  • 14% indicated lack of results.

 

 

Frequency of Results Analysis and Program Design Element Changes

Thirty percent (34%) of the respondents indicated that they analyze results and program design elements Annually during a programs duration.

 

  • 5% indicated that they “never” analyze results and program design elements during a programs duration.
  • 24% analy
    ze results only when reque
    sted by mana
    gement/
  • 21% analyze results and program design elements “3-4 times” during a programs duration.