by Leo Jakobson | October 11, 2016

INCENTIVE: Are travel budgets up? Where are people spending that money?

ROBINSON: Budgets have increased. I'm beginning to realize that it's not 2008 and that's very helpful.

TRAPHAGEN: The IRF Pulse Study did show that budgets are up, and spend per person is up. It didn't drill down to exactly where companies are spending it.

REED: I think the good news is five-star-level hotels and resorts are back. I'm definitely seeing a resurgence of RFPs in these five-star hotels, where a couple years ago that wasn't the case.

Denise Dornfeld of AlliedPRA says more
incentive programs are bringing along
the winners' families

 DORNFELD: It's not a dirty word anymore. A lot more families are coming, too, now, because people want their families with them. They've been away from their families working so hard, so they want their family to appreciate them: "This is what you get, family. Now support me in this role."

TRAPHAGEN: I'm going to say it's very client-dependent. We have a customer in the gaming industry -- app-based video games -- whose participants are super young, but the company is doing very, very well. They're going to put their money primarily in a lot of adventure travel. Others are rewarding the top 15 percent, but they're upgrading the top 5 percent to suites or to first-class airline seats.

Chris Reed of Langham Resorts
& Hotels sees more incentives
coming to five-star hotels

 REED: The spending inside the hotel is less. I think that a lot of the groups are doing more experiences outside of the hotel.

LEE: We do see a trend with larger programs that there is a choice of activities -- they can choose what kind of experiences they're going to go for. It's about customization. It's about how do you engage in different parts of your incentive group.

MACGREGOR: Those optional activities are taking a little more of the budget. Individual incentive travel is, for us, one of the fastest-growing segments. We have a do-it-yourself product that is a point-redemption for travel. Then we have a travel reward solution with customized packages at various price points. In some cases it's part of a tiered incentive travel program. Sometimes it is replacing a traditional President's Club group trip with a selection of options.

Cosimo Bruzzese of Briggs, Inc.,
says many incentive programs focus
on creating experiences that will
provide a "Facebook moment"

 BRUZZESE: One of the biggest shifts is that we're competing against the experience within the city as much as we are with other cities. We're now seeing groups looking to come into New York to see the Tribeca Film Festival -- that's the driving force. It's the Festival against Monte Carlo's Formula 1 race, against the Adele concert in London. "What is the experience that we can tie into the client's goals and objectives?" is a question we're getting a lot.

INCENTIVE: How are the current safety concerns about terrorism impacting your incentives?

ROBINSON: We are having those conversations, and it is affecting us right now. Terrorism is a major concern and, obviously, everything we do, whether it be incentives or internal meetings or client meetings, is revolving around that conversation at this point. There are company protocols put in place and things of that nature. But it's almost like it's happening so fast right now, we can't keep up with it. We are asking our vendors -- the hotels and other third parties -- to beef up their security protocols, absolutely.

BRUZZESE: In the past, a destination that had a terrorism attack would be forgotten by the incentive industry for two to three years. But our memories are getting shorter and shorter. The media is talking about it every day, so we're overexposed.

Karolyn Graves-Rhodes of Wynn Las
Vegas and Encore says all RFPs should
include questions about the destination
and hotel's security plan

 GRAVES-RHODES: It always surprises me that on RFPs there's a question about when was your last renovation, but there's no question about what you are doing for safety and security in your property, or in your city. I think it's a topic that needs to be discussed and taken seriously.

EDMUNDS: Having properties in the Caribbean and Mexico, we have definitely dealt with Zika. We haven't been asked yet to put Zika as grounds for cancellation in a contract, but we've lost groups over it.

MACGREGOR: Zika has not dramatically impacted buying decisions to date. Certainly, it's a consideration, but I can't point to specific destinations that customers are avoiding now because of Zika -- or because there's been an act of terror. It's really all about awareness and making sure that you're doing all of the right homework and putting all the right protocols in place.

INCENTIVE: What are the hot international destinations this year?

MACGREGOR: We've been seeing a resurgence in Australia and New Zealand -- New Zealand, in particular. African safaris tend to be cyclical with our clients, and they seem to be popular again. Then, of course, there's always Europe.

TRAPHAGEN: I can say the same -- long haul is back. We're seeing Dubai and New Zealand, South Africa is back in the mix. Unfortunately not a lot to Asia, but I think that's a cyclical scenario as well.

EDMUNDS: Iceland is huge.

REED: From the hotel perspective, our company's based in Hong Kong and is very Asia-Pacific heavy, and we're seeing a lot of interest in that region right now. I really see a resurgence for the Asia-Pacific market.

LEE: I think that the competition in Asia is heating up. The markets have opened and the economy has turned around since the downturn of 2008 to 2009. Companies are spending more and willing to go farther. The competition in Asia is really unbelievable. Thankfully, all the countries in Asia have their own identity and different things to offer. Singapore and Hong Kong are always compared because of size and many other aspects. Hong Kong has been doing great, as well. Japan, Korea, and Shanghai are also destinations we always find ourselves competing with for business.

We are seeing more and more of the smaller groups, the 30- to 50-person kind that are more nimble and able to fly the long haul. We're also trying very hard to see how we can target the 50- to 200-person groups -- how we can incentivize those groups. It's not just with financial support, but how can we, as a CVB, curate an experience for you, how we can give you something that's typically Asia or typically Singapore. We find that's an attractive thing.

EDMUNDS: The destination that people are most curious about is Cuba. On the hotel side, everybody asks, "Are you opening something there?" It's going to take a few years before the infrastructure to handle the large masses of tourists is in place. Then it really becomes an incentive destination. But I think once the cruise ships get itineraries scheduled there, it'll open up.

DORNFELD: SITE and the SITE International Board went to Ljubljana, Slovenia, in January for the SITE Incentive Summit. I had to look it up on a map. I would pick it for an incentive destination in a heartbeat based on the service level. The food was amazing. And it's so close to Venice, so you can do Venice and Croatia. I think emerging markets are the ones that you need to look at -- wonderful places that people haven't been to. Isn't it all about bragging rights?  

INCENTIVE: How's Las Vegas doing?

GRAVES-RHODES: Las Vegas is an incentive destination in its own category. It constantly changes -- you blink and something else is happening. It has a price point for everybody. Obviously gaming is there, but the value placed on incentive and corporate groups is strong.

MACGREGOR: Some of our clients didn't consider Las Vegas for their incentives because that's where they would always go for their annual sales meeting. They would think to themselves, "Well, you go to Las Vegas for the meeting, how is that going to be an incentive?"

There are now all of these great new off-site venues, from Top Golf -- a 108-bay, climate-controlled driving range -- to the 550-foot-tall High Roller observation wheel, and all of those kinds of things. You can really create this view-from-the-top experience in a transformational way. So now we're having conversations with incentive clients who didn't want to consider it.  

GRAVES-RHODES: We are seeing a lot of meetings including incentives, even if it's for one day. We have [a leading multinational tech company] that's coming for a full-property buyout because they like the self-contained aspect. This client is holding a global meeting, but one of the objectives of the client was incentive. All of these people don't get together but once a year and they want to make sure the quality of the hotel and the events is high, and they don't have to go off property. They're using the nightclubs for opening receptions. You can create a meeting and an incentive all in one.

INCENTIVE: Are all-inclusive hotels still gaining favor?

TRAPHAGEN: Definitely, they've come a long way. All-inclusive hotels went from tacky to definitely classy. The product has so improved, and for the right customer it is a great buy.

EDMUNDS: You're seeing a resurgence of people wanting to take advantage of that because it is price effective and the quality is there. When you think all-inclusive you might think back to the days in the '90s, but it's not that concept. All-inclusive hotels have had to evolve, especially the food. You have to get away from the buffets. When you create the restaurants on property you have to have an Asian Teppanyaki restaurant.

We're in the process of building a luxury, adult-only property that will be boutique style, Unico Riviera Maya. You'll think that you're not at an all-inclusive. You'll think you're at some Miami-esque hotel, and you're getting that experience. You see brands like Hyatt coming in with the Ziva that is, again, a lifestyle concept. They're probably one of the biggest competitors that our all-inclusive Hard Rock Hotel properties in Mexico and the Dominican Republic have, moving forward. 

INCENTIVE: What are you seeing in the cruise segment?  

MACGREGOR: We continue to see cruising popular. It tends to be more of the smaller, more intimate, high-end ships versus the big mega-vessels. Groups still can't wrap their heads around how they can create that feeling of intimacy in some of these big ships. It has the same appeal for the customers who do all-inclusives.

GALLOWAY: Cruises tend to be prevalent in programs where you have choice of destination. If you're winning an incentive trip, cruises meet the need for a certain segment of your population. But you wouldn't, in many cases, recommend a cruise for everyone. When it is a whole group thing, it typically is the buyout situation.

TRAPHAGEN: I would say river cruising is the fastest growing cruise segment with us. It's more intimate, unique, and highly experiential.

Questions or comments? Email [email protected]

This article appears in the September/October 2016 issue of Incentive.