by Leo Jakobson | October 09, 2017
Incentive travel is on a roll, according to the latest SITE Index research report from the Society for Incentive Travel Excellence.

Incentive travel budgets are continuing to grow and optimism is high, despite the impact of world events, says SITE Foundation President Rhea Stagner, division vice president, sourcing and supplier relations, for Maritz Travel - A Maritz Global Events Company. The 2018 SITE Index survey had 574 respondents, including 201 corporate buyers, and was done in partnership with the IMEX Group and J.D. Power

The most basic reason for this, the survey found, was corporate buyers understanding that "incentive travel works," Stagner says. "Incentive travel budgets are continuing to grow."

Speaking at a session at the IMEX America show in Las Vegas, where the results were previewed on Monday, she added that another reason for budget growth is that the companies planning incentive trips know they have no choice if they want to maintain the size and quality of their programs. Incentive professionals have been warning clients about rising costs for six to seven years, she said, pointing to growing costs, particularly in room rates and in food and beverage. The cost of technology is also rising, but in some part, this can be attributed to the growing use of technology like mobile apps in incentive programs, as well as things like Wi-Fi.

How much budgets are increasing, however, is a little unclear. The SITE Index found a staggering 33 percent increase in budgets reported by incentive buyers -- from $3,000 to $4,000 per person. That is substantially higher than what Stagner is seeing at Maritz Travel, which is one of the largest third-party suppliers. She speculated the results may have been skewed by the large number of buyers from the typically high-spending finance and insurance sectors who participated the survey. At the same time, Stagner says, incentive suppliers also reported per-person spend growing by $100 over the 2016 SITE Index. That rose from $1,500 to $1,600.

The SITE Index also found that buyers are negotiating more aggressively with suppliers, as they seek to prove they are working hard at managing budgets.

Many buyers are tracking return on Investment (ROI) and return on objective (ROO), Stagner notes. "More buyers are saying that their programs are 'very effective,'" she says. That has grown from 51 percent in 2016 to 72 percent in the current SITE Index.

While security remains a big issue, the SITE Index found "incentive travel planners and travelers are more resilient," she says. "Safety is a big concern, but corporate buyers recognize that they have to get out there."

As for where they are going, Latin America and Western Europe are seeing big gains, according to Padraic Gilligan, vice president for research and education at the SITE Foundation and a managing partner of consulting firm SoolNua. Still, he adds, "most incentive programs stay within their own region -- North America in North America, Western Europe in Western Europe."

Eastern Europe, the Middle East and Africa, Australia, and India have been seeing declines, Gilligan adds.

When asked what criteria are used to select incentive travel destinations, respondents were unanimous in putting the destination's appeal on top. Safety came in second among corporate planners and sellers, but third among third-party incentive planning companies who said value was second and safety third -- perhaps because of that growing pressure to negotiate aggressively for clients.

This is not to say safety is unimportant. Stagner says it is -- and has long been -- a very high priority at Maritz Travel and many other incentive providers. "Planners expect suppliers to be able to discuss duty of care in preparing for emergencies," she says, adding that at her firm, "if we have not had this discussion with you, you are not a supplier for us."