By SITE CEO Didier Scaillet, CIS, CITP
At IMEX America in October, Society for Incentive Travel Excellence (SITE) launched the latest research into the state of the Incentive Travel industry. Partnering with Incentive Research Foundation (IRF) and Financial & Insurance Conference Professionals (FICP) – two organizations with a huge focus on incentive travel - we produced the largest research study ever conducted on incentive travel, by volume and geographical spread. It’s a good new story with results demonstrating, unequivocally, that incentive travel is in rude health and continues to thrive and grow.
Conducted in association with J.D. Power, the Incentive Travel Industry Index is a wide-ranging analysis of business conditions, attitudes and expectations impacting the incentive travel and motivational events industry worldwide. With over 1,000 respondents from more than 80 countries, it’s the largest survey ever conducted of senior players in the incentive travel industry, doubling responses from past individual efforts. Over half of the responses came from outside the US, with just over 20% from Europe,17% from Asia/Pacific, 6% from Latin America and 6% from Middle East/Africa.
Survey respondents were balanced between incentive travel buyers and suppliers, with buyers representing incentive agencies and corporate users, while more than half of the sellers DMCs. We increased the number of corporate end-user respondents by a staggering 80 percent and of these, 40 percent were from the financial and insurance industry, traditionally a big user of incentive travel.
While the survey findings show that incentive travel is on the rise, growth isn’t happening unchecked. For instance, costs to operate an incentive travel program are going up and over two-thirds of planners are taking steps to contain costs such as less expensive destinations or use of all-inclusive resorts. Sellers are looking to add value through creativity, innovation, and partnerships.
Here are my 5 takeaways from the study:
- Budgets for 2018 are up: Over half (54%) of buyers report an increase in budgets year over year with the median per person spend remaining stable at $4,000. Corporate users report a higher average spend ($8,151) versus incentive agencies ($5,193). The higher corporate spend is attributed to the large number of corporate buyers representing the financial and insurance industries, which are big users of incentive travel.
- More qualifiers than ever: Globally 65% of all buyers are increasing the number of incentive program qualifiers - 58% in US, 67% in EU and 73% in Asia There are many reasons for the growth in the number of qualifiers, from healthy economies to internal factors such as mergers and acquisitions. Many companies are realizing how much their service and support teams contribute to the organization’s overall value and are looking for new ways to deepen their relationships with employees.
- Incentives as a builder of workplace culture: while sales and profitability remain the top reasons to run an incentive program, findings show that companies are increasing their use of incentive travel to improve engagement and strengthen employees’ identification and emotional commitment to the company. Almost 70% of buyers say their programs are effective at achieving their business objectives as successful incentive programs help companies drive behaviour to reach their business goals, and have a positive impact on future economic investment and job growth.
- Increase in use of all-inclusive destinations: all-inclusive destinations are on the rise particularly for incentive agencies as, for the fourth year in succession, buyers continue to seek cost reductions. All-inclusive properties are improving on their abilities to offer a more unique experience i.e. locally sourced food, drinks, etc., to obtain the local experience, but still have a gastronomic experience that is amazing. Many all-inclusive properties are partnering with local DMCs to design a destination experiences. It's not just about the resort anymore, but how much groups can interact with locals in the destination to maximize their experience.
- Wellness is the new golf: Wellness, including yoga, is now a top inclusion for incentive planners as Corporate Social Responsibility (CSR) initiatives drop slightly in popularity. While overall figures for the impact and inclusion of CSR in incentive travel programs are lower than last year, the regional story is quite different. The inclusion of CSR in incentive programs is up significantly in Europe (from 38% to 43%) and dramatically up in Asia (from 17% to 38%). Across all regions CSR and sustainability are second only to the national economy in terms of impact on planning and implementation of incentive travel programs.
About Didier Scaillet:
Didier Scaillet, CIS, CITP was named CEO for the Society for Incentive Travel Excellence (SITE) in January 2018. A MICE industry veteran, Scaillet started his career working for one of the first association management companies in Europe, quickly becoming a business partner. For 18 years he held various roles with Meeting Professionals International (MPI) as director of European operations, vice-president of global development and chief development officer for MPI and the MPI Foundation.