With the last quarter of 2013 coming to a close, trends in the incentive travel industry continue to be a hot topic to discuss. After all, many companies choose to send their employees on trips both during and after the holiday season as a reward for all of their hard work. Where is the incentive travel industry headed in relation to the economy? According to a 2012 study by the Incentive Research Foundation (IRF), employers noted that the economy was causing them to be less optimistic about planning incentive vacation programs for employees. One of the biggest changes that the incentive travel industry will be seeing well into the future months is the switch from international to domestic destinations.
According to the EIBTM Trends Watch Report for 2013, nearly 15 percent of those who responded stated that they will be picking destinations closer to home for their next incentive travel plan. Nearly 16 percent of respondents also stated that they will be switching from international to domestic destinations.
There are a number of reasons why the switch is occurring.
The EIBTM’s report also noted that 48 percent of respondents are deciding to keep their travel budgets the exact same for next year. 31 percent stated they their budgets for incentive travel will slight increase while 21 percent are planning to decrease their budgets slightly.
As mentioned earlier, employers noted that the economy plays a large role in determining how their incentive travel programs are being implemented. For many employers, not being sure how the economy will perform within the next year affects how they will be implementing trips for their employees. This is also why many trends in the incentive travel industry tend to fluctuate during specific months of the year. When a company is formulating their financial plan for the coming year and feels confident that their numbers are improving, they often feel as if they want to reward their employees for hard work. On the other hand, negative financial projections lead to decreased confidence.
Even if a company chooses not to decrease their incentive travel budget, switching from international to domestic destinations is advantageous. Domestic destinations help counter any urgent office issues; if a major problem occurs that a key employee needs to fix, there is no need for them to take a few days to return. Most trips would get employees back within a day. At the same time, companies are able to send employees out for longer periods of time while keeping them closer to home.
Because this trend in domestic travel for incentive-based programs is relatively new compared with the last decade or so, it is hard to tell how it will affect the industry. For many researchers, the industry should continue in an overall positive direction. Despite the variety of companies cutting their incentive travel budgets, they are still sending their employees to trips just as often, if not more frequently.
Additional factors may affect areas of an employee’s trip outside of airfare or length of hotel stay. For instance, 21 percent of respondents in the IRF’s survey noted that they will be increasing the share of sponsored non-meal related components. As 2013 draws to an end, it will be interesting to see how incentive travel rewards compare with merchandise, perks and other benefits for employees.
Sources: http://www.eibtm.com/en/Sessions/3564/EIBTM-Trends-Watch-Report-2013 ; http://theirf.org/research/content/6090730/2012-fall-pulse-survey-incentive-industry-trends/
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