by Vincent Alonzo | October 04, 2010
The big news to come out of Incentive’s 2010 Travel IQ survey is that the impact of the economy and the dreaded AIG effect has definitely begun to subside. While only 35 percent of respondents in the 2009 survey said they had not canceled or changed a program due to the economy or fear of the AIG effect, this year almost half (48.4 percent) are making that claim. Also of note is how resilient Mexico is as an incentive destination. In spite of all the bad publicity from the drug cartel wars in its northern states, Mexico remains the second most popular destination for international incentives.

We’re not out of the woods yet—but the forest is definitely getting less dense.

Economic Crisis/AIG Effect

Have you changed or canceled any incentive travel in the past year due to the economy or public perception?
                                                                                                        2009                2010
Canceled all programs due to economy                                        9.8%                6.4%
Canceled some programs due to economy                                 19.6%                15.9%
Changed all programs due to economy                                        3.5%                1.3%
Changed some programs due to economy                                13.3%                14.0%
Canceled all programs due to public perception                         0.7%                0.6%
Canceled some programs due to public perception                        2.1%                1.3%
Canceled all programs due to economy & public perception        2.1%                1.3%
Canceled some programs due to economy & public perception   4.9%                1.9%
Changed some programs due to economy & public perception   6.3%                3.2%
Canceled or changed programs for other reasons                        0.7%                1.9%
Have not canceled or changed any program                                35%               48.4%
 
General Incentive Travel Issues

What are the primary benefits your company associates with incentive travel programs? 
Increase sales                                        64.2%
Recognize performance                        61.8%
Build morale                                        51.4%
Improve employee loyalty                   35.8%
Foster teamwork                                33.5%
Build customer loyalty                        32.4%
Retention/recruitment of employees   30.1%
Improve customer service                23.7%
Introduce new products                        23.1%
Increase market share                        27.2%
Sell new accounts                                27.2%
Create new markets                                18.5%
Corporate social responsibility                6.9%

What audiences typically participate in your incentive travel programs? 
Internal sales force       70.0%
Client/customer        34.7%
Dealer/distributor        32.4%
Non-sales employees    25.9%
Channel sales force        23.5%

What changes, if any, have you had to make to your incentive travel programs to accommodate a diverse group of participants?
Added a wider variety of optional activities                        41.3%
No changes made to accommodate                                        37.8%
Offered individual incentive travel instead of group travel   27.9%
Changed awards from travel to merchandise                        16.3%

On average, what is the length of the qualifying period for your incentive travel programs?
Less than 3 months  13.3%
3 - 6 months        20.2%
7 - 9 months        9.2%
10 - 12 months       43.4%
More than a year     13.9%

What are the primary benefits your company associates with incentive travel programs?
Increase sales                                         64.2%
Increase market share                         27.2%
Create new markets                                 18.5%
Sell new accounts                                 27.2%
Introduce new products                         23.1%
Recognize performance                         61.8%
Retention/recruitment of employees      30.1%
Build morale                                         51.4%
Foster teamwork                                 33.5%
Improve employee loyalty                 35.8%
Build customer loyalty                         32.4%
Improve customer service                 23.7%
CSR/Corporate Social Responsibility  6.9%

What role does an outside incentive company play in the planning stages of your incentive travel program?
Involvement with the establishment of the incentive objectives  28.1%
Involvement with the establishment of the incentive rules         19.3%
Involvement with the establishment of the incentive budget        26.3%
Involvement in the awards selection                                        30.4%
No involvement in the planning stages                                        52.0%

Individual Incentive Travel

To what extent, if any, are you using individual incentive travel programs in place of group travel programs this year?
Not using more individual travel programs in place of group travel       51.3%
Using a few more individual travel programs in place of group travel    19.6%
Using some more individual travel programs in place of group travel     19.0%
Using a lot more individual travel programs in place of group travel       10.1%

Why are you using more individual travel programs in place of group travel this year?
Cost concerns                                                                                34.6%
Response to participant requests                                                30.7%
Other                                                                                        26.0%
Due to bad publicity/exposure associated with group incentive travel    8.7%

What types of individual incentive travel programs are you now offering?
Prepackaged programs (includes airfare, hotel, other aspects of trip)    62.8%
Customized programs                                                                           48.1%

How do you perceive the prospects of individual incentive travel?
It is a passing trend in response to recent market factors    28.3%
It is here to stay and will be popular in the future            60.1%


Site Selection

Which of the following domestic destinations are the most popular for your incentive travel programs in 2010? 
Florida     46.1%
California    42.2%
Hawaii    35.7%
Nevada    33.8%
New York    18.2%
Arizona   13.0%
Colorado   12.3%
Texas  12.3%
Alaska   9.7%
Louisiana   4.5%
New England 4.5%
South Carolina 4.5%
Georgia 3.9%

Which of the following international destinations are the most popular for your incentive travel programs in 2010?
Caribbean                                       43.5%
Mexico                                               35.1%
Western Europe                               26.6%
Canada                                               14.3%
Bermuda                                               10.4%
Central America                                9.7%
Australia/New Zealand/Pacific Islands     9.7%
Eastern Europe                                7.8%
Asia                                                        7.8%
Hong Kong                                        5.2%
Japan                                                5.2%
South America                                        4.5%
China                                                4.5%
Southeast Asia                                        3.9%
Africa                                                3.9%
Middle East                                        3.2%

Which of the following are the most important criteria when evaluating a destination for your incentive travel programs? 
Reasonable cost/value                                77.1%
Destination’s reputation/buzz                        45.2%
Easy access by air/car                                40.8%
Appealing climate                                        36.9%
Security/safety                                                35.0%
Cultural/recreational attractions available     28.0%
Distance traveled by attendees                        25.5%
Diverse dining/entertainment options        24.8%
Desire to use a new destination                19.7%
Convenient local transportation                12.1%

What are the key resources you use for information when selecting an incentive travel destination? 
Trade/industry magazines                        46.8%
Trade magazine websites                                23.1%
Destination/CVB websites                              29.5%
Hotel/resort websites                                49.1%
Trade shows                                                35.3%
Conferences                                                20.8%
Sales reps                                                        25.4%
Industry associations                                16.2%
Word-of-mouth/referrals                                39.9%
Outside incentive company                        21.4%
Site inspection tours                                        35.3%
Familiarization trips                                        28.3%
CD ROMs                                                1.2%
E-newsletters                                                9.8%
Direct mail                                                10.4%

How has the growing difficulty in air travel (i.e. flight cancellations, security delays, high fuel prices, added baggage fees) affected your choice of incentive travel destinations?
We look for closer destinations/not considering long-haul destinations 30.8%
We look for destinations with sufficient but less congested airlift         21.8%
We look for destinations without major security concerns                 35.3%
We look for destinations with zero or one transfer for most participants  34.0%
We are using or considering charter flights                                           7.1%
No effect so far                                                                                        26.3%

CSR/Green Options

Which of the following have you implemented this past year in your incentive travel programs?
Included more environmentally friendly/responsible destinations   26.5%
Added a charity activity                                                                  23.2%
None of the above                                                                           59.4%

Cruise/Golf/Spa Offerings

How often do you use cruising for your incentive travel program?
Every year                19.7%
Every other year          8.3%
Every three years or so   14.0%
Every five years or so   12.1%
Never                           45.9%

When using cruising for your incentive programs, do you…
Prefer a full buyout                                13.5%
Prefer a partial buyout                        9.9%
Prefer to be one group on a larger ship   34.8%
Do not use cruises for incentive travel   41.8%

How do the availability of golf and spa affect your choice of a destination?
Golf is very important                23.6%
Golf is somewhat important        47.1%
Golf is not at all important        10.2%
Golf destinations are to be avoided  2.5%
Spa is very important                24.8%
Spa is somewhat important        40.8%
Spa is not at all important          7.0%
No affect                                        17.2%

Budgets

What is your entire organization’s annual incentive travel budget for 2010? 
Less than $50,000        27.5%
$50,000 to $99,999        14.4%
$100,000 to $249,999   20.9%
$250,000 to $499,999   9.8%
$500,000 to $999,999   10.5%
$1 million and above     17.0%

Which of the following incentive travel program budgeting methods best describes your process?
Fixed budget based on a pre-determined allocation of budget dollars   62.7%
Fixed per qualifier budget                                                                    24.7%
Unlimited per qualifier budget                                                                  6.7%

What is the basis used to establish your annual incentive travel budget?
Percentage of anticipated incremental revenue increases                       27.4%
Anticipated cost associated with the incentive program                       55.5%
Percentage of anticipated net results from incremental improvements    9.6%

Which company executive best describes the decision maker for your incentive travel program budget?
C-level (CEO, CFO, COO, etc.)   23.8%
President, principal, owner        32.5%
Vice President                                17.9%
Director of Marketing                   6.6%
Director of Sales                           3.3%
Director of HR                           2.6%
Marketing Manager                           3.3%
Purchasing/Procurement                   0.7%
Finance                                           1.3%
None of the above                           4.6%

What season(s) do you typically do your incentive travel program planning or purchasing for the year?
Sprin                                 21.8%
Fall                                 13.6%
Summer                         11.6%
Winter                         10.9%
Throughout the year    42.2%

If you are cutting your program budget, where are the savings coming from?
Less expensive destinations                34.2%
Not cutting program budget                27.5%
Fewer qualifiers                                20.8%
Combine with a meeting                        20.1%
Fewer planned activities/more free time   18.1%
Avoid overseas destinations                16.8%
Cut out pillow gifts                                13.4%
Cut/end per-diem cash allowances        11.4%
Considering/using gift cards                11.4%
Cut program costs/consultants/               11.4%
Avoid luxury destinations                       10.7%
Switch to 3-star hotel/resort                10.1%
Cut food and beverage expenditures  8.7%
Cut out spouses/family members          8.7%
Invite a partner/supplier company             8.1%
Cut program communication costs          2.7%
Cut program communications                  2.0%

ROI

How important is measuring the return on investment of your program compared to last year?
We always tracked and measured ROI very closely                                                30.2%
We are paying more attention to measuring ROI to defend/justify program budget   23.5%
We are paying more attention to measuring ROI to defend program publicly           8.1%
ROI’s importance is unchanged compared to last year                                                15.4%
We don’t have to track ROI to recognize the program’s importance                        22.8%

Which method listed below best describes how your company determines the ROI of your incentive travel program?
Total program gross sales/revenue increases minus the total incentive travel program costs                        40.0%
Total incentive travel program net sales/revenue increases minus the total incentive travel program costs   32.6%
Total incremental revenue and cost avoidance throughout the company attributed to the incentive travel 
program, minus all direct costs throughout the company attributed to the incentive travel program        17.8%

Which of the following methods best describes how you manage your incentive travel program ROI?
Negotiations with incentive suppliers to obtain the best rates/value for incentive travel program inclusions   43.5%
Change program rules and communications throughout the program                                                        10.9%
Reduce program expenses to stay within budget                                                                                        40.6%

How do you determine your incentive travel program investment risk?
Total budget allocated is considered at risk                        46.8%
Communications budget is considered our risk investment   10.8%
Pre-determined dollar amount is considered at risk                42.4%