2018 Incentive Travel TrendsFebruary 1, 2018

Planners Offer Firsthand Perspective From the Field By
February 1, 2018

2018 Incentive Travel Trends

Planners Offer Firsthand Perspective From the Field
Welcome reception for channel incentive participants at Moon Palace Golf & Resort, Cancun, Mexico. Credit: United Incentives

Welcome reception for channel incentive participants at Moon Palace Golf & Resort, Cancun, Mexico. Credit: United Incentives

It used to be that change in the world came slowly. For decades at a time things remained relatively the same, giving even the most change-averse among us time to adjust. But that’s no longer the case. Things evolve at quantum speed these days, and nowhere is that more true than in the travel, hospitality and meetings industries.

Airline and hotel brands come and go in a flash. Airline routes, seats and services evolve too quickly to keep up. Economies fluctuate rapidly, perspectives and opinions change on a dime based on 140-character tweets, the status quo is fluid, information floods in 24/7, and true privacy is largely a thing of the past.

Trends? They come and go like one-day sales.

All of which makes nailing down trends or predicting their evolution a challenge. Still, we went to the experts, planners, to find out which, if any, trends are rising to the top and where incentives may be in the next year. Additionally, we looked at the Travel Trends/Forecasts from the SITE Index 2018.

Not all of our sources agreed on every key point, but there were many commonalities.

Trends of the Moment

Among those noticed:

  • An increase in experiential components of programs, particularly in how participants discover and interact with a destination.
  • Greater emphasis on CSR and sustainability.
  • Increased use and impact of technology.
  • Companies planning programs further out and committing to multiyear contracts.
  • Increased costs but companies willing to spend more to get the high-level incentive programs they want.

George Kun, founder and president of Ohio-based George Kun Travel & Incentives and a 30-plus-year veteran in the industry, adds another top trend to the mix. “Planners and attendees are facing the unknown in a way they never have before,” he says, “and the unknown impacts everything we do as we plan and execute programs. I think from a trending perspective, we face an ever-changing global landscape re: security and natural disasters in ways we never did previously. We have to be in tune with and have solid knowledge of all these things that are happening.”

Speaking to three of the trends, Heidi Stevenson, CIS, director, groups and incentives, and a certified incentive specialist with Utah-based Destinations Inc., says, “People seem to be planning things out further in advance again. They also seem to be planning more group activities per trip, thus budgets are bigger. And programs are being designed with more of an emphasis on experience.”

Responsibility is another word that comes up. “There’s more of a sense of responsibility in the programs,” Kun says, “maybe with different tiers focused on health, sustainability, conservation, global giving or a positive footprint, and destination choices based on eco-friendly environments and practices. People and corporations are more conscious and aware of being good stewards in the world.”

As for advanced planning, Kun says that’s good for everyone. “Longevity of contracts is a positive trend. Previously, groups were waiting longer to make decisions. Now we’re seeing companies planning further out and with that comes an increase in multiyear contracts, which is great for the industry, for planners and for companies. You can create better and more efficient programs and increase logistical creativity, all of which increases revenue. This solidifies supplier relationships as well. When you strike multiple contracts, you can leverage for better pricing, better availability and better choices of locations, among other things.”

About Programs

Who’s Planning Programs?
Nancy Nachman, CMM, CMP, owner of The Meetings Concierge in Scottsdale, Arizona, says, “It’s still typically financial and insurance customers planning incentives; however, we do have a couple of technology companies in the Bay Area planning incentives for the first time.”

On the other hand, Nell Nicholas, senior director, global sales, HelmsBriscoe, says incentives for technology companies appear to be on the decrease.

Qualification of Participants
“Quotas to qualify are always going up, pushing people to perform above and beyond their goals,” Nachman says.

Kun agrees. “Qualification has edged up in terms of elevating what it takes to win the trip and be a participant. Elevating the bar should be part of incentives,” he says, “and it’s also a way of maximizing money.”

Nicholas is seeing fewer sales staff making their numbers at technology companies, which is one reason for the decrease in incentive programs she sees in that industry.

Budgets and Value
Stevenson notes that costs have gone up from vendors, but says, “Most clients appear to be willing to spend more money.”

Nachman puts it this way: “Costs have increased over the past few years simply due to costs rising everywhere with everything. It’s not that clients are spending more to get more, but they have to spend more to get what they had in the past. As we know,” she adds, “when travel budgets get cut, incentives are the first to go. That’s ironic as companies need incentives to generate more business, especially when opportunities lessen due to a downturn in the economy.”

Kun believes prices are steadily increasing but not skyrocketing. “I think programs are still decently priced, but any increase can challenge a company in terms of creating these programs. We as industry planners must be more savvy shoppers to get the best deals that meet the quality, culture, activities, destination and level of service required.”

He says airlift is a detail that should be discussed earlier in the planning process to prevent it from negatively impacting budgets and other areas of a program. “Too often it’s not discussed much until it comes down to actually moving people. That no longer works. We need to know registrant numbers and participation further out in order to accurately project costs. And because airline seats and nonstop options are fewer for all passengers, we need to book earlier to get the flights and seats we need.”

Nicholas is seeing a trend in different types of cost containment and downsizing. ”Less extravagant incentives are being executed with a simpler agenda, such as all-inclusives and one big awards dinner and reception, leaving couples to plan their own agendas,” she says. “This is a cost saver.”

She’s also seeing other strategies for downsizing, noting that cutting incentive trips altogether is one current trend, with companies offering gift cards of up to $5,000 instead. “This strategy is implemented in part because meeting-planning departments have been slashed to the point that there is simply not enough bandwidth for a single planner to execute a successful incentive along with his/her other planning responsibilities. As a cost-saving measure, however, it’s a fallacy that gift cards are less expensive than incentive trips. The feedback I’ve received is that a) an amazing incentive trip can be planned for $5,000 or less per couple, and b) employees are looking for experiences vs. cash. Time spent with company colleagues and superiors outweighs cash in hand.”

Number, Size and Makeup of Programs
This area seems to be all over the spectrum, with no clear trend.

Nicholas says that running fewer trips is one option companies are choosing. “In non-technology-based companies, one trend I’m seeing is incentives run every other year. This way, companies can still spend extravagantly on a memorable incentive but the cost is cut in half vs. annual programs.”

With some companies, she says, programs aren’t canceling but, “they seem to be more petite, with 25 or fewer couples on the programs.”

Stevenson and Nachman say incentives overall are on the upswing.

“We’ve seen incentives grow in leaps and bounds over the past two to three years,” Nachman notes. “Even smaller companies we partner with are doing incentives. There’s just no better way to motivate and reward people than dangling an amazing trip in front of them.”

That said, there are shifts in what’s normal. Nachman says the annual trip is still the status quo with most of her clients, but others are going a different route.

“One client is changing from one large incentive (150 couples) to three smaller programs. The smallest program of 10 couples will be the crème de la crème trip. The medium-sized one will be for 40 couples, and they’re looking at all-inclusive resorts in Mexico or the Caribbean. The largest one, for 100 couples, is staying stateside, probably in Miami or San Diego.”

Kun is seeing the same thing and attributes it in part to companies being more flexible, as well as to acquisitions and mergers. “With acquisitions and mergers, the size and makeup of programs may change. Do we want a national program or bigger programs? Do we run more back-to-backs with smaller numbers? What’s a good size without losing sight of the ultimate goal? These are all considerations impacting who goes, including how many managers we take. The balance of management to key people in their departments is fluctuating with respect to incentive trips, so we’re seeing customization.

“One way to handle this is with two-tiered programs or a pre- or post-trip that may be exclusively for a management team, for example. From a budget perspective, we have to balance all of that in terms of number of days and people. It forces us as meeting planners to become higher-level consultants to our clients on how to maximize and be creative. We’re not just planning travel.”

Kun says he’s running more back-to-backs to manage group size within a destination. “We ran a program at the Four Seasons Hotel Gresham Palace Budapest, an incredible property across from the famous Chain Bridge. We caught it at exactly the right time when it was not so well known. It’s total world class but too small for our client’s normal group of 350. We couldn’t have made this work if the company didn’t have the flexibility to split the group into three. Given this destination and what it offered, we tested the flexibility component with the company, which we had never done before. Maybe we need to test these boundaries more in order to implement the highest level programs.”

Components, Planning and Implementation of Programs
Incentive programs at core are about offering a memorable, often one-of-a-kind experience that participants could not duplicate on their own — something that truly impels employees to deliver their best work and achieve high-level success because they want to qualify for that trip. How planning and implementation are achieved varies.

In terms of pre-trip strategies, Nachman says she’s intrigued by what different companies do. “Some send out teaser puzzles and gifts promoting the destination. Others just talk about it without providing any visuals. It’s quite interesting from our perspective as independent meeting planners to ask and learn what our clients do to entice potential winners.”

She says unique experiences still rule. “A recent trip to London with Four Seasons gave the guests a private tour of the Crown Jewels before the Tower of London opened to the public and tea with the Queen’s cousin. Now that was memorable, special and unique.”

Kun says people want creativity but also simplicity. “They want an accessible destination and activities and action but they want their experience to be stress-free.” He references a program in Montreux, Switzerland, that delivered on all fronts.

“Logistically, you don’t want to be too far from the airport — 30-45 minutes is good but over an hour and people start squirming. You can’t beat them up. We were close enough to the airport in Montreux and also right on the water and that made people happy. The Fairmont property is palatial and incentive worthy but also in the heart of the action where people want to be. There are buses and trains right there, giving participants diverse opportunities for simple transportation that doesn’t break the bank. Switzerland Tourism provided participants with a free card for transportation and other discounts, including local riverboats. That added simplicity.”

Stevenson is seeing CSR as an added or increased component within programs, not surprising given that it’s among the top trends. And it’s no longer just a couple of hours of working on a quick project. “CSR is a big one,” Stevenson says. “We dedicated two days of service at a school for abused girls in Costa Rica last year as part of an incentive program.”

Some changes are not about program details and activities, especially for insurance and financial companies. Changes related to incentives in these industries have their origins in what happened back in 2008.

“In the AIG era, there became more of an awareness of accountability and that has stuck with the industry,” Kun says. “I think there’s more emphasis on the right product vs. planners simply selling a particular product because they like it. Planners have to be more accountable and more aware of not burning money. That, of course, applies industry wide, but I think there may be less waste for insurance and financial companies as opposed to other industries. Financial accountability is very high when planning incentives for those industries, even while providing the wow factor.”

Current Go-to Destinations
Where are groups meeting these days? Pretty much everywhere.

“There are more programs looking at Europe, Africa and Asia than there previously had been,” Stevenson says.

Nicholas is still seeing the Caribbean as popular for incentive travel, though she says companies focused on cost savings are looking more at domestic incentives.

“Worldwide is where our clients’ incentives are taking place,” Nachman says. “Of course, beach trips are always front and center so Hawaii, Mexico, the Caribbean and some European cities are always exciting. A few of our clients are staying in the United States and have met in fun cities such as San Francisco and New Orleans. We planned a ski incentive trip this year too, in Utah.”

Kun notes that “Canada is getting a nice look” and Europe continues to be hot. “We just got four groups of 200 for Sorrento, Italy, for next year.”

He also mentions Dubai, a destination with “a ton of new inventory and growth, which has done a good job of marketing itself.” He thinks companies are often surprised to find how secure and safe Dubai is.

The challenge, Kun adds, is that to get those top destinations, planners may have to be flexible. “Seasonality comes into play more. You may have to move into shoulder season, for example, or split groups to get the right pricing and availability.”

Looking to the Future
What are planners predicting?

“I think people will be spending more money,” Stevenson says. “It will be bigger, better. One concern is that the length of stay seems to be getting shorter — just three nights in Costa Rica, for example.”

Nicholas sees the same thing in terms of nights. “Companies are looking to decrease the number of nights on domestic incentive programs. Caribbean island destinations that are easy, affordable and safe are on a continuum.”

Nachman believes “wow” will remain the ultimate goal for incentives regardless of budget. “We will see more unique and special programs that no one could do without the help and creativity of a DMC for the higher-end incentives,” she says. “Being able to do something and tell everyone that only you got to do it is something everyone wants.”

Kun predicts that planners will have to become more educated than ever before with less learning time. “Planners must be better educated and maximize their education on all fronts — pricing, trends, safety, everything. People are more demanding,” he says. “It’s an incredible world and there’s beauty everywhere, but you have to be careful not to step on a logistical landmine. It’s complex now and I think it’s going to become more complex — and yet we have an appeal of simplification and people want that.

“We have to be in tune with what’s happening in the world,” Kun concludes. “Our clients have instant communication and they’re sharp. But we are professionals in the industry. We have to know what we’re talking about so we can better protect and guide our clients. The better we understand the current complexities of the world, the more valuable we are to our clients and end-users. You can’t sit back. You have to be in the know and on top of things no matter how quickly they change.”  I&FMM

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