by Justin Myers November 09th, 2023
The Global Business Travel Association’s (GBTA) recent research shows business travel is booming, which naturally means many organizations are investing in incentive travel programs. Incentive travel continues to evolve and gain strategic importance as companies face new and varied workforce challenges. This expansion of perspective regarding the numerous benefits of this type of travel is great news for the future of the industry. In fact, incentive travel is supposed to grow at around 12% a year, meaning it will jump from 42 billion dollars to over 215 billion by 2031.
It is with this information and the desire to help businesses build successful incentive programs that the Incentive Research Foundation (IRF) and Society for Incentive Travel Excellence (SITE) conduct their yearly Incentive Travel Index study. Their 60-page report includes valuable insights, and we’ll review a few of the more revelatory findings here.
- Incentive Travel Goals
- Incentive Travel Budgets
- Incentive Travel Challenges
- Choosing Your Incentive Destination
- Designing Your Incentive Travel Experience
- Working With Event Planners for Better Incentive Travel
Incentive Travel Goals
One of the first sections of the survey explains what organizations with incentive travel programs hope to achieve. The research identifies two primary categories of goals – hard and soft – each of which has very specific returns.
Hard goals include ROI in the form of financial gains, including increased sales or market share. In contrast, soft goals include building corporate culture, nurturing relationships, and providing team-building and engagement opportunities. While those planning events are typically focused on one more than the other, secondary goals often crossover. Further, no matter what the goal, knowledge transfer is considered a vital and invaluable benefit of incentive travel.
While those “hard” benefits reign supreme in North America, the “soft” benefits are growing in importance, suggesting more organizations will be designing incentive programs focused on driving both hard and soft benefits. The research supports what many in the industry have known for quite some time: a major benefit of incentive travel is how it helps attract and retain talent in a competitive job market (90% of respondents reported this as a benefit).
In fact, more than 65% now agree that incentive travel (which used to focus primarily on motivating individuals, such as sales team members) is now far more about building relationships and a cohesive corporate culture. However, that doesn’t mean companies aren’t still seeing motivational benefits from incentive trips; it’s just not the primary benefit any longer.
More and more, senior management is starting to understand and see the advantages of incentive travel, especially when it comes to corporate culture and managing talent. For organizations looking for ways to boost morale, attract/retain talent, create/nurture corporate culture, and build strong teams, including incentive travel programs as part of their overall workforce strategy is a smart decision.
Incentive Travel Budgets
Even with senior management on board, many organizational leaders who want to include incentive travel programs in their budget are wondering just how to plan for these trips. Budgeting includes everything from determining pricing for specific dates to preparing for unexpected costs that may be incurred, as well as searching for potential savings. All of these considerations can make it difficult, even with buy-in.
The majority of respondents see incentive travel activity and per-person budgets increasing compared to 2022, and those increases are expected to continue one to two years out. The pharmaceutical and technology industries are leading the charge in expecting increased budgets above or significantly above 2022 levels over the next two years.
Inflationary pressures, as well as strong demand in business and leisure travel, continue to drive program costs higher with hotel and airfare accounting for nearly 50% of incentive travel costs. That said, food and beverages will also contribute significantly to the budget. In fact, 65% of buyers expect these costs to rise, and that tracks with the cost of dining rising across the board.
The good news is that one of the factors least likely to impact costs is the length of your program. This means experienced event planners can help you bundle, package, and make deals that get the most out of your budget.
Incentive Travel Challenges
Budgeting isn’t the only challenge facing organizations, though costs due to inflation are among the biggest concerns with 87% of respondents considering it the primary challenge. The second biggest challenge is finding qualified incentive travel professionals, and this is true across nearly every industry surveyed.
In fact, 84% of respondents reported that the skills, expertise, and services of travel professionals and incentive travel professionals are incredibly valuable and will become even more critical in the coming years.
Given concerns about strained relationships (54% report these difficulties) between buyers and suppliers, having help for planning programs is even more important. The crux of the challenge seems to lie with locating support and help for planning incentive travel programs. Finding agencies with travel and incentive program experience is vital, especially when it comes to managing budgets and destinations.
Choosing Your Incentive Destination
When it comes to selecting the destination for incentive travel, most buyers want to explore new locations. In fact, 71% of buyers are looking for destinations they have never traveled to. This is where event planning agencies with incentive travel experience can really shine.
Another area of interest, perhaps related to budget concerns, is all-inclusive resorts with 53% considering this option. In fact, there is a significant increase in interest in trips that are true getaways. This would explain why interest in resorts is increasing in popularity while urban destinations are decreasing.
In addition, distance from the point of origin seems to be a factor in choosing destinations. More buyers are looking closer to home, with those from North American looking at the Caribbean, Mexico, and Western Europe. However, the desire to see new places seems to supersede all other wants.
Where in the world is important, but equally important to buyers is what’s there. At 60%, group cultural sightseeing opportunities are a major contributing factor in destination selection. Relationship and team building (58% and 43%), dining experiences (57%), and bucket list/luxury (53%) opportunities are also near the top when it comes to finalizing a choice.
These factors stem from the desire to create memorable trips and experiences that provide the soft benefits discussed previously. A bucket list trip, stronger connections to coworkers, beautiful escapes, and top-class dining will absolutely help companies retain their most talented members while sharing those experiences will help attract others.
Additionally, many are looking at other factors when making their destination choice, particularly as they relate to their attendees' health and safety, as well as overall sustainability. More specifically, they’re looking for low crime rates (72%), environmental, social, and governance (ESG) (50%), and diversity, equity, and inclusion (DEI) (45%) in their destinations and venues.
Designing Your Incentive Travel Experience
With your organization’s goals in mind, you have to carefully consider the elements of your incentive program – your goals should be reflected in all decisions. Obviously, budget is a major factor in creating your program, but the “why” of designing your incentive initiative should also be taken into account. With more remote employees and global workforces becoming more commonplace, 40% of those considering programs noted that their dispersed workforce was a driving motivator for periodic or recurring trips. An event that brings together employees from across the globe to foster team building and improve corporate culture is a much different event from one that celebrates a company’s highest-producing sales members. Your “why” matters.
Another factor that matters is the criteria that must be met in order to become one of the well-earned winners. Consider that the milestones to reach incentive travel are becoming more varied. In the past, a single sales goal might have been the primary factor, but now most companies want more from these events. While motivation remains a goal, incentive trips might have multiple goals beyond motivation moving forward. In other words, hitting a sales goal may still be rewarded with incentive trips, but there will likely be other criteria included in the program.
Designing a corporate incentive trip involves careful planning and consideration to ensure it's not only enjoyable for participants but also aligns with your company's objectives. The research from IRF and SITE can help you plan for some obstacles that may be encountered along the way. Armed with the data that true getaways in all-inclusive resorts are popular destination choices, you could survey your potential attendees as to which destinations would be most desirable. Always consider the preferences and interests of those who will be traveling. Keep their demographics and any special requirements in mind as you make plans. Tailor the trip to appeal to the majority while accommodating various preferences.
Because the research also indicates that 60% of incentive travelers want to integrate local culture, cuisine, and traditions into the itinerary, you could arrange visits to local markets, cooking classes, or cultural performances. Authentic experiences that enhance the trip and leave a lasting impression make your event even more impactful.
Remember, a well-designed corporate incentive trip not only rewards employees but also strengthens team bonds, boosts morale, and promotes a positive company culture. Create the experience in a way that makes it memorable and meaningful for your specific participants.
Working With Event Planners for Better Incentive Travel
When it comes to a holistic view of your incentive travel program – everything from cross-functionality to destination knowledge to meeting budgetary needs – working with an event planning agency is extremely beneficial.
As noted above, finding ways to package and bundle or negotiate with venues and vendors often comes from established relationships. That means a company like Bishop-McCann can leverage our existing relationships with destinations, vendors, venues, and more to help you maximize your trip. We know that many organizations are beginning to budget and plan for trips in the coming year, and that’s why our team is in the field, traveling, and working on discovering destinations and building the relationships we need to help you deliver an exciting, memorable destination event for your team.
As corporate event planners with significant travel experience, including group air travel management and sourcing, we’re ready to help you plan. Get in touch with our team today, and let’s determine where you’re heading in the coming year and how you can get the most out of your incentive program!