What does the future hold for incentive programs?
Based on research conducted by the Society for Incentive Travel (SITE) and the Incentive Research Foundation (IRF), the outlook for programs in 2018 seems to be mostly positive.
We looked at SITE’s “State of the Industry” report, which focused solely on incentive travel and solicited responses from nearly 600 travel professionals worldwide from corporate planners and incentive agencies to suppliers, destination management companies, hotels, and other third-party service providers.
We also looked at the broader-ranging IRF Outlook Study, which surveyed over 200 industry representatives from a variety of fields.
While both studies offer plenty to be excited about for 2018, here were a few of our key takeaways:
1) The growth and popularity of incentive travel
Both studies found corporate budgets for incentive travel to be on the rise.
SITE found an average per-person increase of nearly $1,000 from 2016, while the IRF study indicated a more gradual 4%-5% year-over-year increase on travel budgets since 2014. Both found the average budget for organizations to be right around $4,000 per-person.
According to SITE, the perception around incentive travel programs’ overall effectiveness also seems to be improving: 72% of respondents felt that incentive travel was “very effective” in motivating performance, up more than 20% from the previous year.
Similarly, 20% of respondents to the IRF study indicated that they were considering shifting their overall incentive budget to include more group travel. These findings indicate that as confidence in the incentive group travel industry continues to build, organizations are also becoming more willing to commit their resources to it.
2) The more the merrier
According to the IRF, both corporate buyers and third parties agree that participation in incentive programs is likely to increase in 2018.
This is reflected in the fact that nearly 32% of stakeholders anticipate more participants earning rewards, while 12% expect to add more trip-earners to their 2018 incentive travel programs.
Similarly, more than half of respondents to the SITE survey believed there would be a rise in the number of qualifiers for incentive travel rewards. As programs continue to grow, it makes sense that participation in these programs would likewise see an uptick.
3) How best to quantify program success?
Finally, with the advancement of program technology—after all, more and more programs seem to be utilizing unique apps, personalized e-statements, data tracking, and more—one would think that organizations would be placing greater importance on more accurately quantifying the success of their programs.
Somewhat surprisingly, however, only one-third of respondents to the SITE report claimed that they “Always” or “Almost always” track their programs’ ROI; likewise, in the IRF survey only 38% of corporate respondents said they use ROI to measure their programs’ success.
Contrast this with 64% of third-party respondents—most of whom are experts specializing in the field of performance improvement and incentives—who measured ROI.
These findings seem to suggest a gap between the types of resources and services corporate incentive planners deem vital for the success of their program, and those that a third party can (and often does) provide.
In fact, when surveyed on the various methods used to assess program success, the majority of corporate respondents said they use either “participant feedback” or “general morale and enthusiasm,” qualitative and subjective measurements that leave plenty of room for more thorough analysis.
Some other key points from the studies:
- Top incentive travel destinations continue to be the continental U.S., Hawaii, the Caribbean, Mexico, and Europe.
- Both Corporate Social Responsibility (CSR) and wellness/wellbeing components are being utilized more and more frequently in incentive travel programs.
- The industry is seeing an increase in the inclusion of individual travel packages (up 31%) and experiential rewards (up 37%) as reward offerings.
- The majority of respondents (73%) who have implemented non-cash programs report having participants outside the U.S.
Conclusion
While it seems clear that the health of the incentive industry continues to improve in tandem with the economy at large, there certainly remains room for growth in the way individual programs are being administered.
This extends particularly in regard to the use of technology, reporting and analytics, and the measurement of program success. Will we start to see these elements taking up a greater share of incentive program bandwidth? We can’t wait to see what the future will hold.
Sources:
https://theirf.org/research/the-2018-irf-outlook-study-white-paper/2275/
