Economy Impacting Incentive Rewards, Study Says
“Respondents indicated they are less optimistic than they were in the spring about their ability to plan and implement incentive travel programs and consider the economy as having a relatively negative impact on their ability to execute the programs they would like,” said IRF President Melissa Van Dyke.
The Incentive Research Foundation’s (IRF) latest survey of incentive industry trends finds planners struggling with the effects of an economy caught in a slow recovery.
According to IRF President Melissa Van Dyke, “Survey participants demonstrated that their program’s sensitivity to internal pressures, competitor reactions, and perceptions of extravagance were lower than in the spring and actually at a level equivalent to or below 2008. However, they cited the economy as having a significant impact on all incentive plans.”
Incentive travel programs were affected most from the economic outlook. “Respondents indicated they are less optimistic than they were in the spring about their ability to plan and implement incentive travel programs and consider the economy as having a relatively negative impact on their ability to execute the programs they would like,” Van Dyke said, citing the following results for travel programs:
- Sixty-two percent said the economy is having a negative impact on program planning—numbers that haven't been this high since July of 2009.
- While 28 percent expected their budgets to decline, 45 percent anticipate no change, and 27 percent actually expect an increase.
- More than half of the programs will be providing air tickets and covering no incidental expenses.
- Forty-one percent will be reducing the number of nights.
- Forty percent are shrinking “non-meal” components.
- Destinations reflect economic realities with 83 percent of planners providing incentive travel to within the U.S., 55 percent going no further than the Caribbean, 52 percent including Europe, and 29 percent targeting Central America. Less than 18 percent are considering destinations in Asia, South America, Africa, or the Middle East.
“In the area of non-cash merchandise incentive programs, there is less agreement on the impact of the economy in 2012. Twenty-four percent of respondents see a negative impact, 27 percent anticipate no effect, and 25 percent expect a positive influence,” Van Dyke said. “In fact, 17 percent anticipate such positive changes as adding individual travel and/or increasing the value of merchandise or gift cards.”
The survey revealed the types of merchandise include: gift cards (46 percent), clothing/apparel (43 percent), electronics (42 percent), luggage (34 percent), and jewelry/watches (33 percent).
“In general, respondents indicated that they anticipate most incentive program elements to remain essentially unchanged in the coming year, reflecting a slower return to growth than originally anticipated,” Van Dyke added.
Click here to read the entire survey.