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Incentive travel trends for 2008

The magic of incentives - getting your people to a place they've never been by taking the business to a place it's never been.


The magic of incentives - getting your people to a place they’ve never been by taking the business to a place it’s never been. By Sandra Eagle, Market Report, Jan/Feb 2008

Sonia Kurmey was looking at her watch and getting a little anxious as she stood in the entrance to the Playa Conchal Resort. About 20 members of the incentive group had headed out from the resort early that morning on an outback mountain Jeep tour in Costa Rica, just one of the options during last year’s incentive trip. It was 5:00 p.m. and the group was already an hour late. Imagine Kurmey’s surprise when the convoy showed up a few minutes later, covered in mud from head-to-toe, absolutely raving about the best day they had ever had, off-roading on mountain trails and cruising long stretches of sandy beaches, which included a pit-stop at a beach hut for lunch. They were having such a fabulous adventure that the group had simply lost track of time.

For Toronto-based Kurmey, president of Touchstone Travel & Promotions Inc., who organized the trip, that story perfectly illustrates the spirit she believes is the heart of incentive group travel. “Essentially, employee incentive travel to me is a trip an individual wouldn’t or couldn’t put together themselves.” This particular group, she says, was a younger crowd – 20-to-40-year-olds – who wanted a more physical experience and opted for a wilder and untamed environment. The 20 incentive winners and their spouses were whisked away to the luxurious Paradisus Playa Conchal Resort for one week. “Another activity included rappelling through the jungle canopy. They wanted exhilarating and they got it,” she adds.

On this trip, pushing personal boundaries was one part of the lure of incentive travel. For a company overall, the push for stellar sales performances is just one part of the incentive programme. With a looming labour shortage due to retiring Baby Boomers, retaining good employees with an attainable incentive goal is becoming a necessary component of an overall performance package. Employers need to think about how they can create an environment where people want to work, are motivated to work and are acknowledged and rewarded for the results of their efforts.

For Jeffrey Charles, sales account executive with Mississauga, Ont.-based Reward Worldwide, reminding his clients of what travel does is a large part of his job. “Travel shapes you as an individual, you get to experience a different culture and push your personal boundaries. That’s where the magic of this business happens – pushing business boundaries is a personal recipe for growth.” Charles, as a Gen Y guy, says his generation is a bit of a different beast. “Travel is the ultimate reward, but it has to be somewhere I’d never go by myself.”

WHO AND WHY
The corporate sales team, not surprisingly, is still the top contender for a company incentive programme, according to 58 per cent of corporate respondents. Non-sales team members make up 30 per cent of the mix, while dealers/agents/brokers and distributors weighed in at 14 per cent. In the past year, 27 per cent of respondents say their company has altered its philosophy to include more non-sales staff.

Based on the results of this year’s Market Report, 21 per cent of corporate respondents indicate that group incentive travel is currently offered to an organization’s top performers, and the immediate future for incentive travel remains strong. Third-party planners are bullish on the trend for the coming year, as 40 per cent say that incentive travel rewards for their clients will increase, compared to 20 per cent of their corporate counterparts. Third-party planners expect to average about 11.1 trips this year, compared to 9.3 in 2007, while corporate planners will plan an average of 3.3 trips in 2008.

HOT SPOTS
As in previous years, the Caribbean still takes top spot as a destination for incentive travel for the next 24 months, with 22 per cent of corporate and 45 per cent of third-party planners. Mexico is big with 18 per cent of corporate and 41 per cent of third-party planners, while Europe is a destination of choice for 10 per cent of corporate and 35 per cent of third-party respondents. While 6 per cent of corporate respondents will use cruising as an option in 2008/09, there is a huge spike of 27 per cent in third-party planners who are opting for the high seas in their incentive travel mix over the next two years.

Albert Vandermey, senior manager, business development with World Wide Meetings & Motivation, based in Toronto, is planning two Caribbean cruises this year. One will depart San Juan, Puerto Rico for ports of call such as Aruba, Curacao, St. Maarten and St. Thomas. The other is a four-night cruise departing from Miami.

The increased interest in cruising is due to a number of factors, he says.

“Purely from a pricing standpoint, it’s the most cost-effective programme you can run. And the ships themselves are evolving. There’s so much to do on board, that some cruise lines are spending more time at sea to just experience what’s on board. Party animals can dance the night away, or go head-to-head in a fully-sized boxing ring complete with lessons. On the Liberty of the Seas (part of the Royal Caribbean Line), passengers can actually surf in the wave pool. In the last five to six years, ships have changed so much. It’s literally the latest and the greatest. And once you’re on board, there are no new expenses.”

Domestically, Toronto, The Niagara Region, Vancouver, The Laurentians, Banff, Lake Louise, Whistler and Quebec City will be used as incentive-travel destinations by both corporate and third-party planners in the next 24 months.

Stateside, San Francisco/Napa Valley tops the list as a consideration for incentive travel, at 24 per cent of corporate and 32 per cent of third-party planners.

When it comes down to the numbers, 22 per cent of corporate and 11 per cent of third-party planners spent between $2,000 and $2,499 per participant last year, while 20 per cent of corporate and 14 per cent of third-party planners spent between $4,000 and $5,000 per person.

Looking ahead, corporate respondents say they expect their total budget to decrease from an average of $580,300 to $464,800 to 2008. Third-party respondents think their budgets will increase from a total average budget of $536,000 in 2007 to $594,000 next year.

The average size of an incentive group, according to corporate planners, is shrinking, from an average group of 360 in 2006, to 169 in 2007 and an estimated 163 persons in 2008. Third-party planners went from an average group size of 309 in 2006 to 198 in 2007. Looking to 2008, they expect those numbers to rebound to an average size of 244 participants per group.

SURVEY SAMPLER
20% of corporate planners and 40% of third-party planners say incentive-travel rewards will increase in 2008.

Corporate respondents estimate the average size of an incentive group in 2008 will be 163 people. For third-party respondents, the average size of an incentive group will be 244 people.  

In 2007, 22% of corporate planners spent between $2,000 and $2,499 per participant in an incentive programme and 20% spent between $4,000 and $5,000 per participant.

27% of third-party planners say they will use cruising for incentive travel programmes in the next 24 months, while 25% are considering cruising for incentive travel in the next 24 months. 

62% of corporate planners always or usually include a business meeting during an incentive trip.

57% of third-party clients offer incentive travel as a motivational tool.

27% of corporate respondents say their company has altered its philosophy to include more non-sales staff in motivational rewards.

(So
ur
ce: M&IT magazine 2008)
Sandra.eagle@mtg.rogers.com



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