Incentive and resort business is back. A recent survey by the Society of Incentive and Travel Executives found that over 80 percent of respondents plan to use motivational travel programs in the next one to three years. Hotels already see the upturn.
“There is no doubt that incentives are back, in all regions,” says Irby Morvant, Hyatt regional vice president of resorts, from Chicago. “Programs are getting larger and we are seeing multiple waves of attendees returning. Groups are coming in much larger than planned.”
Planners have seen business building for months.
“Looking back, 2011 became the pivotal year,” says Mary MacGregor, vice president of business development at BCD Travel Meetings & Incentives and immediate past president of SITE. “As the economy improved and the negative perception of incentives eased, companies again realized the need to motivate their key constituents.”
Especially after seeing a change when programs stopped, she adds.
“There was a heightened awareness of the impact of incentives when they went away,” MacGregor says. “Companies clearly saw that incentives drive the right kinds of behaviors, boost incremental gains, and help retain top performers in an increasingly competitive set.”
In other words, she notes, “They are remembering that travel incentives are a very reliable tool.”
The New Normal
Although incentives are back, style and expectations have changed. Extravagance and flash are out, but value and engagement are in.
“Value has become key,” says Penny Jackson, director of group sales at the Sandestin Golf and Beach Resort, in Destin, Fla. “Planners want to provide an upscale experience at reduced cost. Everyone is being judged by that bottom line now.”
A SITE reported issued in late 2011 underscored the value of travel compared to other incentives. And while sponsors are coming back to travel, budgets are flat at best.
Alan Reichbart, director of marketing for the Four Seasons, Palm Beach, says South Florida has emerged as an alternative to Caribbean destinations.
But beyond shifting destinations, Reichbart is seeing planners move outside of peak season, and trim programs from five days to four.
Also to save money on travel, companies are doling out gift and reward cards with deals on air, hotel and the like, according to Jackson. Cards allow sponsors to control costs, and incentive winners can use their reward in whatever way makes the most sense to them, she says.
“We like to work with hotels that offer certificates and gift cards with no expiration,” says Jay Hagen, CEO of DriveSavers, a data rescue firm, in an Incentive Travel Council (ITC) report. “Our employees might save up one- or two-night rewards and turn them into a week-long vacation. Things like that make our program enticing and valuable for our staff.”
Incentive Plus
Awards also are becoming more flexible. Instead of aiming for a trip to a particular resort, winners often are picking from a list of award properties in different locations with different features and activities. Rather than offering a trip to a specific sporting event, many companies are offering a list of sports highlights to choose from.
“Nothing incentivizes like getting the winner involved in selecting the award,” says Michael Upp, senior vice president of business development at Mitch-Stuart Inc., an incentive provider in Laguna Nigel, Calif. “And I’ve never had a customer tell me that one of these travel incentives is a waste. It pays for itself.
The new focus on value and bottom-line results also is changing the way incentives are structured.
Pure travel programs are giving way to programs that combine travel and meeting content, notes Ellen Ryan, regional director of sales and marketing for Fairmont Hotels and Resorts in Boston. That can be a plus for hoteliers like Fairmont, with multiple properties in a location.
Attendee Input
Working with incentive participants is going to become more important in the future, says former ITC president Jim Ruszalo, director of marketing for Maritz Travel. What is now an employer’s market is shifting toward an employee’s market as business continues growing. As demand for high-quality, high-performance employees outstrips supply, incentives will be a key element in employee acquisition and retention.
“You need to talk with your participants,” Ruszalo says. “Let them co-create your next program for better impact. They can help you focus on business objectives and impact in incentive programs.”
He adds, “Participants realize that incentives aren’t just about recognizing and rewarding performance, they are about networking and spreading best practices. People learn a tremendous amount from those stories.”
Veteran meetings reporter Fred Gebhart has never won an incentive but does enjoy resorts.
