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    Industry News

     

    Incentive Travel Remains Preferred Business Strategy

    Thursday May 28, 2009

     

    New York — May 27
    A new study just released from the Incentive Research Foundation (IRF) at its 2009 Invitational reveals that despite the ongoing impact of the economy on incentive travel programs, a majority of incentive practitioners are unlikely to switch from travel incentives to another program initiative.
     
    The IRF “Incentive Industry Trends Outlook 2009” Pulse Survey indicates that while incentive travel programs will indeed be altered due to budget constraints, their utility as a strategic business tool persists. Incentive travel providers, corporate incentive travel buyers, suppliers (e.g., hoteliers) and others participated in the survey. Their answers reveal a shift in award selection decisions in merchandise programs and budgets for incentive travel programs and note the political landscape’s impact on the industry, among other findings.
     
    “Amid the economic downturn and intense public scrutiny of motivation and awards programs, savvy business professionals continue to realize the power of incentives to help achieve business goals, even when they may need to alter programs due to cutbacks,” said Rodger Stotz, chief research officer of the IRF.

    “This supports the beliefs of those who work within the incentive industry that incentive programs are results-oriented, cost-effective, useful for multiple applications and highly measurable.”
     
    The study questioned respondents about specific actions that could help properly communicate the value of industry offerings. The three ideas suggested most include:

    • Explain/educate the value/ROI of incentive programs (37 percent).
    • Lobby government/educate government on program value/ROI (35 percent).
    • Lobby/educate press and media about benefits of incentive programs (30 percent).

     
    These types of efforts may be especially critical in the coming years since a majority of respondents consider the incoming political climate to be “unfavorable” to the incentive industry (unfavorable, 65 percent; favorable, 15 percent; no effect, 20 percent).
     
    Other Key Findings

    • A number of the “Industry Trends Outlook 2009” questions are the same as those asked in an October 2008 Pulse Survey, providing additional insight into the variable nature of the industry and a snapshot of change during the intervening time:
    • Use of experience-related awards and gift cards are on the rise. While 30 percent of respondents continue to foresee no change in award selection, they are now more likely than earlier to include experience-related awards (24 percent in March vs. 13 percent in October), add debit/gift cards (16 percent vs. 5 percent), and increase merchandise award value (12 percent vs. 5 percent) in incentive programs going forward.
    • Incentive providers face challenges and opportunities. With the exception of “per diem cash allowances,” all incentive program elements measured were expected to face deeper budget cuts as reported in the March survey than reported in the October survey. Results reveal the deepest cuts are expected in incentive company management fees, 64 percent in March vs. 34 percent in October. Other anticipated reductions include incentive company involvement, on-site gifts, number of total qualifiers, communications budgets and overall awards budgets.
    • Respondents in March 2009 were much less likely than those in October 2008 to agree that competitor reactions impact the products and services included in their company incentive programs, 31 percent in March vs. 64 percent in October. Furthermore, respondents were less likely to agree in March than in October that their companies are sensitive to perceptions of program extravagance to the extent that the type of awards and program inclusions would be changed. Apparently, companies believe that the benefits of such programs outweigh if and how outsiders might judge them.

    For more info: http://www.TheIRF.org

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