This year’s study, conducted by J.D. Power, includes responses from 599 buyers and sellers of incentive travel, as well as other industry professionals from 62 countries - 61% are outside the United States.
Incentive Travel Works. 60% of buyers report they plan to increase the number of people eligible for incentive travel in the next year and nearly half say that budgets have increased. An overwhelming majority of respondents (99%) believe incentive travel programs are somewhat or very effective in achieving business objectives, with approximately eight in 10 buyers and sellers reporting that they are a strong motivator of performance.
World economy. While increased airline costs have the greatest negative impact, concerns over the economy are growing. 67% of sellers and 56% of buyers say that the state of the world economy has the potential to negatively impact their travel programs. Consequence: creating value becomes essential, and 76% of sellers report working on greater creativity and innovative event design in order to increase value for their customers.
Terrorism and border security. Tightening of border security and safety concerns has had an increased impact on incentive travel decisions. Almost eight out of ten buyers see a negative impact of terrorism on their ability to plan incentive travel programs. Similarly a growing number of buyers, one out of four, believe the tightening of border security will have a negative impact.
ROI tracking. Even if measuring effectiveness in terms of sales and profits is not new, the practice is still surprisingly limited with only 23% of corporate buyers and 24% of third party suppliers “always” or “almost always” tracking return on investment. The primary reason is a lack of requirement from management. Definitely a topic our industry should address.
Disintermediation. The majority of buyers (57%) think disintermediation in the travel industry has negatively impacted their company, especially agencies, 70% of whom believe the increase of corporate buyers going direct to suppliers has negatively impacted their company. This trend may be explained by the growing role of event technology in the purchasing process, with 54% of buyers reporting their use of event technology will increase in the next three years.
Popular destinations. Despite concerns of health and safety, buyers report the highest incidences of increased use of incentive travel to North America, the Caribbean and Western Europe. North American and European buyers are most inclined to utilize domestic travel while Asian buyers are most inclined to utilize international travel destinations. South American buyers are trending towards decreased domestic travel.
The study does not mention two key challenges for our industry: tax uncertainty (at least in Spain) and compliance policies, which, as every challenge, has to be rightly tackled by our industry. We will see the impact of those in our November 2016 issue, with a special report on the incentive market.
SITE will host a webinar on 17 November 2016 to review the 2017 SITE Index results and share what they mean to the global incentive market. To download the full report and to register for the webinar go to http://www.siteglobal.com/page/site-index