Victoria Falls is a popular incentive destination | Picture: Cansaf

Thursday, 15 September 2011
Joern Lucht

Incentive-Research-FoundationAfter more than four years of turbulence in the incentive and recognition industry, there are now indicators of a trend toward stability in both merchandise and travel programs.

So says a new report by the Incentive Research Foundation (IRF).

“What we are seeing is the new ‘normal,’” said IRF President Melissa Van Dyke.

“The general buying outlook for merchandise and travel program planners has moved from negative or flat, to slightly positive. There’s an underlying current of normalization – even suggesting growing optimism.”

The reason behind the uptick in confidence is a downturn in the correlation between incentive programs and outside drivers. According to the IRF pulse study, the influence of factors such as financial forecasts, competitors’ reactions and sensitivity to program extravagance has declined.

Even the economy, what many consider the dominant force affecting every business decision, is lessening its grip on incentive travel planning, with half of respondents saying they feel no pressure to change destination.

More than half the respondents claim that the economy has either no impact or a positive impact on the implementation of merchandise programs. An optimistic three-quarters of those queried expect no change to their incentive budgets, with a few even predicting a slight increase.

Daily News Alert: Subscribe to stay on top of meetings industry developments

In all, a near 80 percent of planners are looking forward to a positive 2012.

Incentive Travel Trends:

Overall, the economy’s impact on program planners’ ability to implement incentive travel programs is stabilizing with about 66% saying that the economy has either no impact or a positive impact. Still, a full quarter of respondents view the economy as having a slight or very negative impact on their programs.

Similar to last fall, 41% of respondents in Spring 2011 expect their incentive travel budget to slightly increase and 38% expect it to remain unchanged. This means that the vast majority (almost 80%) of planners are looking toward a positive 2012.

Likewise, last fall, over 50% of program planners said they would not be changing their destination choice. About a quarter said they will be moving from an international to a domestic location and a little over 10% will be moving back to an international destination.

Involvement by procurement is beginning to normalize as well with over 50% in Spring 2011 seeing no change or only a slight decrease in procurement’s involvement, significantly different from last fall when 64% of respondents saw an increase in procurement’s involvement.

As reported last fall that the vast majority of respondents were not expecting any great move from group to individual travel and this holds true for the spring of 2011 as well; 65% of respondents said they do not anticipate any movement toward individual travel this spring. Twenty-nine percent saw a slight or significant increase.

Despite the normalization in a number of indicators, there still remains some movement in planners’ efforts to optimize their programs, including the air, accommodation and non-meal components.

Looking forward, corporate social responsibility and integration with sales management tools are on the horizon. One in four respondents indicated they now use a CSR component in their incentive programs and one in five indicated they have integrated their program with other Sales Management Tools.

The full Spring 2011 pulse study is availale for download here (PowerPoint Presentation).