The New Expectations for Incentive Travel
Skift Take
Findings from this year’s Incentive Travel Index reveal shifts in how companies and qualifiers view incentive travel programs. The collaborative report from the IRF and SITE surveyed more than 2,800 incentive travel professionals.
Skift Meetings contacted the heads of both organizations, IRF President Stephanie Harris and SITE CEO Annette Gregg, for their interpretations of three key shifts.
1. Incentives Increasingly Used to Building Corporate Culture
Incentive programs are a business tool that, when successful, drives revenue directly to the bottom line. The increase in sales pays for the program’s cost.
In this year’s survey, 58% of respondents said they see incentive travel playing a more distinct role in motivation and culture building. Gregg called this ‘soft power’ benefit “an unintended consequence of a business tool introduced primarily to improve a company’s profitability.”
The survey also found other soft goals of incentive programs that are increasingly important. These include retaining talented employees (81%) and offering a competitive advantage in hiring (62%).
“Culture building remains critical to both attendees and program owners, so soft power is more of a driver right now than the harder measures,” said Harris. “This may shift if more companies push employees back into the office, where other traditional culture-building tactics can be employed.”
She explained how companies design incentive agendas that mirror how they build corporate culture. “We see an increase in the desire for group dining experiences and award celebrations. Those are moments when companies can reinforce both their culture and their values with attendees. Of course, the added value of simply being together in our work-from-home world also is a major benefit.”
2. Incentive Travel Is Becoming an Expected Part of Compensation
Almost half of the survey respondents (41%) said they perceive awards today as ‘deserved.’ Supporting this finding, 55% of senior leadership considers incentive programs to be ‘essential,’ with 49% indicating they are a ‘need to have.’”
Are incentives becoming a given for both winners and management, just like the annual bonus?
“This is likely more prevalent among organizations where there are large groups of perennial winners,” said Harris. “That said, we also saw 68% of respondents indicate that travel is becoming more valued as a reward, and we know it is even more highly valued among younger employees than the older generations.”
Gregg agrees that the value of incentive travel varies among employees. “In some ways, incentive travel could be seen as just another reward, especially since there will always be employees who may prefer cash, merchandise, or other forms of recognition.
“Incentive travel may not be the right solution for every reward and recognition program, and that’s to be expected. The key is knowing when and where to use it so it can do what only it can uniquely accomplish – create lasting, transformational experiences that other rewards simply cannot offer.”
3. Destinations Perceived as Safe Attract the Bulk of Incentive Travel
Geopolitics could be influencing companies to choose ‘safe’ destinations despite attendees’ preferences. For 71% of respondents, political considerations overrode other considerations in planning for 2024 incentive programs, up 20% from 2023.
Harris described 2024 as “a year of uncertainty,” due to the fact that more than half of the globe will hold elections this year, on top of the war and unrest in Ukraine and the Middle East region. “Corporations have a duty of care for their travelers and are therefore looking more closely at destinations where there is more stability and security for attendees.”
However, there appears to be a disconnect between where attendees want to travel and where companies are willing to send them. Western Europe once again topped all international destinations among incentive winners in the IRF’s 2024 Attendee Preferences survey. The Middle East actually moved up one position this year to become the third most desirable destination.
“The truth is that Western Europe is not seen as ‘international,’ at least in the same way as Thailand or Argentina would be,” Gregg explained. “The ‘fear factor’ doesn’t kick in at all, even when a war has been raging on another part of the European continent for more than two years.”
“There are many safe but farther flung destinations,” Harris added. “The increased caution around safety means more vetting and may eliminate some destinations on a temporary basis, but long-distance travel is in a healthy place.”