Individual Incentive Travel Is Booming
By Leo Jakobson
June 7, 2011
As the economy improves, the individual incentive travel market is doing not just better, but very well overall, according to a number of hospitality companies that offer gift cards and certificates to the corporate motivation market.
This sentiment seems to cut across the spectrum of travel providers, ranging from American Airlines to Carnival Cruise Lines, and from Best Western to Fairmont Hotels & Resorts.
While individual incentive travel awards have been around for many years, they were seen largely as separate reward and recognition tools from traditional group incentive travel awards. Gift cards and certificates for hotel rooms, airline seats, and cruise cabins were treated much like retailer gift cards or merchandise awards—often redeemed as one-off rewards using program points.
But in the past few years, their widespread use as an alternative to group travel “was founded in the AIG effect,” says Greg Whitacre, senior director of global sales of individual incentive awards for Marriott International. “As the AIG effect has waned, executives are starting to ask, from a pure motivation standpoint, ‘Is it still better to pursue a recognition strategy with an individual travel experience?’ ” Whitacre is seeing more companies package Marriott and Ritz-Carlton’s multiple-night Stay Award certificates—good for a room for two with breakfast—with dinner, spa, and golf certificates, as well as its cash-value TravelCards for incidentals.
Another factor in the rapid growth of individual incentive travel awards, Whitacre says, is that, especially in direct sales channels like pharma and finance, today’s Gen X and Gen Y top performers “really struggle” with going to a resort selected by the company to rub elbows with hundreds of other winners. He adds that corporate sales leaders are starting to ask whether younger top performers would say, “Give me my five nights so I can go where I want, when I want, and with whom I want.”
While Robert Ward, director of sales for Ovation Rewards—which can be redeemed at Fairmont Hotels & Resorts, Raffles Hotels & Resorts, and Swissôtel Hotels & Resorts—is not as bearish on group incentive travel, he agrees that the under-40 demographic “really likes individual travel.” He says group travel always will be an important market.
Another reason behind the growing use of individual incentive travel is that organizations are much leaner these days and can’t afford to send all of their top performers, Ward says. With individual travel, “they go for a couple of days, staggered.”
Due to group travel budget cuts in recent years, lots of firms are doing tier programs. “Instead of 500 people going on the group trip, they are now sending 250, and 100 get individual awards,” Ward says. “We are also seeing them used for quarterly awards, and there is still the big end-of-year program.”
At Travelocity Incentives, founder Peter Friend sees a number of things that point to a healthier economy and growing use of Travelocity-branded hotel cards and vacation cards, which package hotel together with air—starting with the increasing card values that his firm has been issuing.
Also, card users once again are selecting luxury properties. Friend says that over the last three years, recipients who would have stayed at four-star hotels chose three-star properties. “Now, they have returned to [where they were] a few years ago,” he says. “And my international bookings are up.”
Tammy Lucas, Best Western International’s managing director of marketing programs, has seen sales of travel cards jump 22 percent in the last year, and one of her largest incentive house clients dropped lower-denomination cards from points-based programs. “They went away from the $50 card to focus on the $100 card,” she says, so people who wanted to redeem for a Best Western card had to hit a higher threshold to do so—by earning more points or spending more in consumer loyalty programs. Implicit in that decision is a better business climate.
Here are the individual incentive travel awards being offered to corporate programs.
The airline’s cards are available in denominations from $50 to $1,500, and up to eight can be used at one time. Its Cards for a Cause support the USO or the Susan G. Komen for the Cure organization. aa.com/travelcards
Usable at 4,000 hotels in 90 countries, Best Western Travel Cards start at $25. In February, the firm launched descriptors, and now it is in the process of differentiating its properties into three categories: Best Western, Best Western Plus, and Best Western Premier. bestwestern.com
Carnival Cruise Lines
Carnival’s Preferred Awards are for three-, four-, five-to-six-, or seven-to-eight-day cruises for two persons, including taxes, fees, and gratuities, in either interior, ocean-view, or balcony staterooms. Four tiers determine flexibility, and prices start at $518. All certificates can be upgraded by the recipients. Fun Ship Dollars in denominations from $25 to $500 are available for onboard use. carnivalmeetings.com
Fairmont Hotels & Resorts, Raffles Hotels & Resorts, and Swissôtel Hotels & Resorts
Ovation Rewards are good for stays of one or more nights and include breakfast at the properties of the three brands. They come in four tiers that determine eligible properties for use. Standard room, junior suite, suite, and Fairmont Gold (concierge floor) levels are available. The gift cards come in various denominations and are good for accommodations and services at the properties. fairmont.com/ovationrewards
Four Seasons Hotels and Resorts
Four Seasons’ gift cards are available in denominations ranging from $50 to $100,000 and can be used at any of the brand’s properties worldwide. fourseasons.com/giftcard
Hyatt Hotels & Resorts
Hyatt Stay Certificates are valid for one-, two-, or three-night stays at the firm’s properties worldwide. There are five tiers that determine which properties can be used. Spa cards and dollar-denominated gift cards and checks are also available. hyattincentiverewards.com/brochure
Marriott and Ritz-Carlton
Non-denominated Stay Awards are good for one or more nights, including taxes and breakfast for two, across its brands. They are divided into Worldwide, Americas, European, and Asia-Pacific, each with tiers that determine participating properties. Worldwide certificates have resort and villa versions, as well as Weekend certificates and Experience Awards for dining, spa, and golf. Cash-denominated TravelCards for on-property use are available. Ritz-Carlton has a somewhat similar portfolio of individual incentive awards, including new cash-value TravelCards. Later this year, Marriott will roll out TravelCards in Canadian, British, and euro currencies, with others slated for 2013. marriott.com/incentives
Travelocity gift cards are usable on the popular travel booking site and come in two varieties: Hotel and Vacation Package, which includes both flights and a hotel stay. travelocityincentives.com
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