by Deanna Ting | June 17, 2016
The beachfront pool at sunset at the Hilton Aruba Caribbean Resort & Casino Marble facade: Interior of the  Columbus Lighthouse (Faro a Colon).
 No doubt, incentive travel is back. According to statistics from the Incentive Federation and Incentive Research Foundation (IRF), 46 percent of U.S. businesses use incentive travel, spending $22.5 billion annually on those programmes.


In putting together our annual roundup of the top incentive travel trends, every source used the exact same word to describe the state of the incentive travel industry: "strong." As strong as the incentive travel industry is, however, it's important to note that although incentive travel has, in fact, rebounded from the AIG Effect and Great Recession of 2008, incentive travel planners still have to be mindful of costs, planning, and the challenge of creating new, one-of-a-kind experiences for participants.

Here's a closer look at the top 10 trends that have been impacting incentive travel.

1. Incentive travel is back. According to the IRF's "Fall 2014 Pulse Survey," there has been a 71 percent decrease since March 2009 in the number of organisations that believe economic conditions are having a negative impact on incentive travel programs. Additionally, statistics from the IRF survey show that properly designed and executed incentive travel programs are, on average, increasing sales productivity by 18 percent and produce an ROI of 112 percent.

At Minneapolis-based Aimia, Kurt Paben, president of channel and employee loyalty, says they are seeing more requests for proposals than in the past. "The industry is doing very well," he says. "A lot of corporations have reverted back to award travel to increase engagement with their channel partners and employees."

2. Budgets are remaining about the same, but trending up slightly. In the "Fall 2014 Pulse Survey," nearly 50 percent of planners said they would be increasing their budgets, and average per-person spending for incentive travel was up significantly to $3,440. "As the market continues to improve, travel budgets are growing again as well," says Tony Wagner, Minneapolis-based vice president of CWT Meetings & Events Americas.

However, "Cost will always be a factor, even in good times," notes Marty Doyle, senior director of travel experiences for New Brunswick, NJ-based Dittman Incentive Marketing. "Some industries, such as banking, still feel the pressure to not be seen as extravagant."

Doyle also points out that, regardless of budget, incentive planners have to keep a close eye on expenses and value. "Other industries, particularly distributors, feel the pinch in the form of squeezed margins in their marketplaces, resulting in tightly managed costs for employee recognition and incentives," he says.

Joost de Meyer, CIS, CITE, CMM, ACC, and chairman and CEO of Orlando-based First Incentive Travel, says his clients are asking him to "do more but with the same budget... It won't be like it was in the past when the sky was the limit," de Meyer notes. "When people organise incentives, they need to really set goals and have a return on investment [ROI] in mind. There's more to think about now that it is related to procurement."

Alison Taylor, senior vice president of Starwood Hotels & Resorts' Sales Organization, also notes, "Price continues to drive decisions and cost remains an important, if not the most important, factor for most incentives. While we are seeing increased budgets, these increases aren't keeping up with increases in hotel, air, and ancillary components of a programme."

3. Planning ahead is crucial. The demand for hotels globally is high, but accommodations aren't growing at the same rate to meet demand, making it harder for planners to book the programmes they want on the dates they need.

Merchandise bars, like the Bose Experience run by Incentive Concepts, are becoming popular for incentive programs and meetings.
 "Client forecasting has not caught up to the realities of the marketplace, and many organisations are still working under the assumption that it's a buyer's market," says Doyle. "In fact, it is very much a seller's market, and we must work closely with our clients to be sure they understand this and can adjust their plans accordingly."

Doyle says that because some of his clients are still working with shorter lead times and increased participant numbers, they are often opting for mega resorts, even for smaller programmes, because of the need for value, service, and accessibility.

Paben says that a survey of Aimia's supplier board of hoteliers, DMCs, and airlines shows "space is getting harder to secure." He says, "The booking cycle for large incentive programmes is, on average, two to three years out. Medium-size incentive programmes are 12 to 24 months out, and small incentives are being planned an average of 12 months-plus out."

Paben also says most incentive travel programmes are running an average of four to five days in length, and March is the most popular month of the year for delivering the trip, with April coming in a close second.

4. Get those passports ready. International incentive travel programmes are growing. According to the IRF, last year was the first time since the recession that more planners considered international destinations over domestic ones, with the Caribbean at the top of the list as the most popular region. "We'll see more clients continue to look toward international destinations," says Wagner. "This is really the first time since the recession that international destinations outside of Mexico are back on the radar for many planners." He adds, "In regard to our programmes, incentives continue to move to international locations from domestic as the economic growth continues." The strength of the U.S. dollar, in particular, is also making it easier - and more affordable - for groups to travel abroad, especially in Europe, Canada, and Asia.

5. Experience is everything. Today's incentive travel participant, regardless of age, isn't content with the same experiences as before. Instead, they seek new, unique experiences that connect them to a destination, and they crave personalisation and choices when it comes to their travel experiences.

Local and cultural authenticity, for one, is something a number of travellers desire. "We're living in an 'age of experience' where travelers are seeking opportunities to immerse themselves in the cultures they are visiting," says Wagner.

Adds Taylor, "Many people want to have a closer connection to the community they are visiting. They are craving more indigenous and cultural experiences, as opposed to the normal tourism or shopping highlights."

When it comes to delivering the type of experience that incentive winners desire, it boils down to freedom of choice, says Marilyn Murphy, CEO of Woodland Hills, CAbased CTP Group. Some itineraries are just too crammed with activities for people to really enjoy the experience." Murphy says for her groups she often offers a variety of activities from which to choose.

"For activities, there's a push to more personalised, customised experiences," adds Taylor. "Planners are often tasked with designing a programme that appeals to the varying interests of the multigenerational guests who attend." She notes that interest in golf seems to be down, while leisure time or "time on one's own" is growing in popularity among incentive programmes held at Starwood properties. "Attendees want to experience the destination their way, but at the company's expense, so we are continuing to see cash allowance gain popularity."

Personalisation is also a key element for a successful incentive travel programme, and goes beyond activity choices. On-site merchandise bars where participants can choose from a variety of different brands or items are a growing incentive travel trend. Examples run from the Maui Jim Sunglass Experience and the Blue Jeans Bar to custom Nike shoes and Bose Experiences.

Even perennially popular incentive travel destinations are trying to find new ways to deliver experiences, says Paben. "Our clients are always looking to top the programme from the prior year. A lot of well-known incentive destinations are creating new ways to attract the experiential participant."

Adds Doyle, "It's critical for planners to provide an experience the participants can't replicate, as well as to ensure that the experience merits the effort taken to be on the trip."

6. Check that Wi-Fi. While the popularity of mobile event apps and social networks like Instagram, Twitter, and Facebook is encouraging incentive programme participants to share their experiences online, it can drain hotel Wi-Fi bandwidth. So, planners need to be mindful of Wi-Fi capability in the destinations where they bring their programmes.

Likewise, Paben says many of Aimia's clients are "spending a lot of money on sharing - through social media - on-site videos created by drones, or using mobile apps, etc." He adds, "In fact, Aimia has tripled our mobile app delivery in just three years. The communication experience helps participants share with others back home in real time."

7. Wellness is essential, becoming top of mind for many participants. Rice sometimes incorporates a wellness speaker, tai chi or yoga classes, and healthier activity alternatives for many of her clients.

And when it comes to food, meeting or shopping with local chefs and having healthier options overall is essential. SRI, a nonprofit research insitute, estimates that wellness tourism now accounts for approximately 14 percent of global tourism, and in the U.S., wellness offerings like yoga, healthful menus, and state-of-the-art fitness centers are expected among many travellers. Although IRF research shows 30 percent of planners currently focus on wellness for their incentive travel programmes, qualitative research suggests that planners expect wellness to be a part of their programme, whether the planner uses it or not.

8. Always be prepared.
 Whether it's a natural disaster, terrorist activity, diseases, or weather changes, disruptors have the potential to wreak havoc on an incentive travel programme, and risk mitigation is now an essential element of any trip. The recent Ebola outbreak and terrorist attacks in Tunisia, Paris, and Thailand, for example, are proof of that. Incentive travel planners have to do disaster planning and find ways to mitigate risks.

9. It's about attracting and retaining talent. While incentive trips traditionally were held to motivate and increase sales, they are also being used to recognise employees and channel partners, and reward customer loyalty. In an increasingly competitive landscape, these programmes are also being used to attract and retain talent.

"Our clients understand and prioritise the critical connection between employee engagement and the success of their organisation," says Doyle. "The war for talent is looming as Baby Boomers retire and Gen X just isn't large enough to replace it. Most of our clients fully understand that engagement, development, recognition, and incentives - including travel incentives - are essential to retaining and attracting talent. Incentive travel is an important opportunity to recognise the best of the best, to educate on company direction, to build a community, and to appropriately award not only the winners but the spouses or other important people supporting their efforts. It will take this kind of commitment to the workforce to remain an employer of choice."

10. Give back. Corporate social responsibility (CSR) remains popular with incentive groups. "Most of our incentive programmes do some type of give-back programme, like going to a local school or helping to build something for the community," says Rice. She often tries to get in touch with community leaders to facilitate some type of interaction between her attendees and the local community.

At Starwood, Taylor and her team have taken note of community networking and CSR as an ideal way for groups to not only give back but also feel a stronger sense of connection to the community that they are visiting. "In Fiji, where we have a new hotel, The Sheraton Resort & Spa, Tokoriki Island, we've seen customers aid in building schools and accommodations, as well as sponsoring orphanages," she says. "The fivestar experience is important to our customers, but participating in social responsibility initiatives while they're there is a growing trend."

Giving back through gifting is yet another way incentive groups are incorporating CSR on a trip. Paben says Aimia often sets up on-site boutiques with local artisans and handcrafted jewelry from social enterprises like Fair Anita. Sales of these pieces, made by oppressed women in foreign countries, help empower the women, and most of the money goes back to the jewellery makers.