Last year was one of the best years ever for the incentive travel industry, not just in North America, but also around the globe. And, 2016 is projected to be another banner year, according to respondents to the "2015 SITE Index Benchmark Study," an annual analysis and forecast of the incentive travel industry.
In an effort to provide more meaningful and actionable information to incentive travel professionals, the SITE Foundation partnered with IMEX Group, and engaged leading global research firm J.D. Power to manage the survey and reporting this year. Participants were given the opportunity to identify themselves as an incentive travel buyer, seller, or interested industry observer, allowing for buyer/seller comparisons. The report reveals a number of positive and potentially challenging trends.The Spend
Overall, both buyers and sellers report a slight increase in incentive travel budgets over the past year -- and many companies are planning to increase both their budgets and the number of eligible participants in the next 12 months. While budgets may be increasing, nearly three-quarters of buyers are managing costs in a variety of ways such as planning shorter programs, having fewer inclusions, and selecting less-expensive destinations.Up the Game
For sellers of incentive travel services, the market is likely to become even more competitive, with customers' expectations going well beyond the acquisition of a travel package. Clients are asking them to design customized incentive travel programs that are unique, demographic-appropriate, and drive performance. And, participants are seeking more personalized, authentic experiences indigenous to the program destination, as well as activities that allow them to give back to the communities they visit.
With customers' standards becoming even higher, sellers of incentive travel services cannot afford to remain complacent about creating value through innovative event design and greater creativity. If they do, they are very likely to fall behind the competition. To successfully bridge the value gap, it is essential that sellers gain a better understanding of a potential client's target audience and core business objectives to design a program that is motivational, memorable, and measurable.Impacts
Despite a positive outlook for the incentive travel market, warning signs do exist. Among all respondents, there is a fairly strong perception that domestic and world events -- specifically airline costs, the world economy, and the threat of terrorism -- have the potential to negatively impact the incentive travel industry.
Although a large majority of both buyers and sellers believe that incentive travel programs are strong motivators of performance, only 28 percent report that they always or almost always track the ROI of programs. The lack of supporting metrics could make incentive travel programs especially vulnerable during financially challenging times. A well-designed program should demonstrate a quantifiable link between the reward and performance, which demands cooperative efforts between buyers who can identify and communicate the business goals, and skilled sellers who can design a program to achieve the desired results.
Buyers and sellers of incentive travel will benefit greatly from reviewing the SITE Index report,
and applying the findings. While times are good, it is vitally important to stay on top of prevailing trends and prepare for the future to ensure that our businesses and the global incentive travel industry remains strong for years to come.Denise Dornfield, CIS, is the 2016 SITE Foundation president and president of AlliedPRA, Inc. where she has dedicated 31 years to the destination management industry. She currently oversees operations of 20 AlliedPRA US-based franchises and wholly owned offices. Dornfeld holds active memberships and volunteers her time on numerous boards and committees including the SITE Foundation Board of Trustees, SITE Southern California Chapter, FICP, and MPI.