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by Leo Jakobson | October 17, 2016
The incentive travel industry has traditionally been the most easily spooked branch of the Meetings Incentives, Conventions and Events (MICE) industry -- the first to leave and last to return to a destination after trouble. But even in a year in which terrorism has become a factor in the safest of mainstream destinations, and the world economy is showing signs of a slowdown, the incentive industry is booming. 

That is the key finding of the 2017 SITE Index survey, produced by the Society for Incentive Travel Excellence Foundation and conducted by J.D. Power. Fully two thirds (60 percent) of the 599 incentive buyers and sellers from 62 countries who responded say their firms plan increase the number of people eligible to win the trip in next year's incentive programs, and nearly half (49 percent) plan to increase their travel budgets. Eighty percent called incentive travel a "strong motivator of performance," and virtually all believe it is "somewhat or very effective" in achieving important business objectives. 

That said, there are potentially serious headwinds coming in the next year. The combination of tightening border security and terrorism's spread into destinations ranging from France to New York that were long considered safe has nearly 80 percent of the survey's buyer respondents seeing a negative impact on their ability to plan incentive travel. Yet, North America, the Caribbean and Western Europe were the destinations seeing the biggest increase in incentive travel programs.

Over all, about one quarter of the buyers felt tightening borders will have an impact, although Asian (58 percent) and European (53 percent) buyers were far more concerned.

On the economic front, increased airline costs were the biggest negative, but two thirds (67 percent) of sellers -- the respondents from the hoteliers, destination management companies (DMCs), and destination marketing organizations (DMOs), and other suppliers -- say that "the state of the world economy has the potential to negatively impact their travel programs."

Another roadblock, according to SITE, is the inability, unwillingness or lack of interest in tracking and measuring the return on investment (ROI) of these programs. Fewer than one quarter of incentive buyers (23 percent) and incentive sellers (24 percent), "always or almost always track ROI," SITE says in the survey report. "Like any sound business investment, the use of incentive programs to achieve critical business objectives must have proven value to the organization," the report adds. "Buyers and suppliers appear to be missing an opportunity to prove the efficacy of their programs."

Finally, the SITE Index points to disintermediation -- the ability and inclination of incentive travel end users to go directly to suppliers rather than using incentive professionals -- as a factor that has hurt their companies' programs. On the incentive buyer side, 57 percent feel this way, as do 70 percent of third party suppliers. Perhaps unsurprisingly, less than one in five (19 percent) corporate end users agree. 

About three fifths (61 percent) of the 2017 SITE Index respondents were from outside the United States. And for the first time, the survey was available in Spanish and Mandarin as well as English. 

To download the full report or register for a SITE webcast to discuss the report on Nov 17, or to download the full report, visit http://www.siteglobal.com/page/site-index.