2015 was one of the best years ever for the incentive travel industry around the globe. And, 2016 is projected to be another banner year, according to the 2015 Society for Incentive Travel Excellence (SITE) Index Benchmark Study, an annual analysis and forecast of the incentive travel industry, released this week during the SITE Incentive Summit in Ljubljana, Slovenia.
In an effort to provide more meaningful and actionable information, the SITE Foundation partnered with IMEX Group to utilize its database, and engaged leading global research firm, J.D. Power to manage the survey and reporting. Survey participants were given the opportunity to identify themselves as an incentive travel buyer, seller or interested industry observer, enhancing the relevance of the questions and allowing for buyer/seller comparisons.
"The SITE Foundation has been working to improve our research processes, data quality and response rates with the goal of providing deeper insights into why incentive travel is a vital business tool. The 2015 SITE Index not only demonstrates the business case, but also provides buyers and sellers valuable insights into industry trends and predicts optimism for growth in the global incentive travel industry in 2016," said Tina Weede,Vice-President, Research and Education, SITE Foundation and President, USMotivation, Atlanta, Georgia, USA.
Slight increase in budgets
Overall, both buyers and sellers report a slight increase in incentive travel budgets over the past year with a median spend per participant of around $3,400. And, many companies are planning to increase their budgets, and the number of eligible participants, in the next 12 months. While budgets may be increasing, nearly three-quarters of buyers are managing costs through a variety of ways such as planning shorter programs (34%), having fewer inclusions (29%), and selecting less expensive destinations (29%).
The bar is rising
For sellers of incentive travel services the market is likely to become even more competitive with customers’ expectations going well beyond acquisition of a travel package. Seven in ten sellers report they are currently developing new and more creative ways to add value for their customers. With the standards becoming even higher, sellers cannot afford to remain complacent about creating value through greater creativity and innovative event design. If they do, they are very likely to fall behind the competition.
Faith and belief are basis for most ROI acceptance
Despite a positive outlook for the incentive travel market, caution signs do exist. Among all respondents there is a fairly strong perception that domestic and world events - specifically airline costs, the world economy and the threat of terrorism - have the potential to negatively impact the incentive travel industry.
However, an even greater challenge to the industry’s health is how many companies assess the effectiveness of their incentive travel programs - more on belief than on metrics. Although a large majority of both buyers and sellers believe that incentive travel programs are strong motivators of performance, less than one-third always/almost always track the ROI of programs. Over half of buyers report not tracking ROI due to the program being so widely accepted and embedded that it does not require measurement. The lack of supporting metrics could make incentive travel programs especially vulnerable during financially challenging times.
Travel with a higher calling
It has increasingly become the norm to include a corporate social responsibility (CSR) component, with approximately seven in ten programs including a CSR activity. Another aspect that has become the norm is incorporating a meeting with 42% of buyers reporting that a meeting is "always" included in the incentive travel program.
"Buyers and sellers of incentive travel will benefit greatly from reviewing the SITE Index report, applying the findings and implementing strategies based on information relevant to their business. While times are good, it is vitally important we stay on top of prevailing trends and prepare for the future to ensure that our businesses and the global incentive travel industry remain strong for years to come," added Weede.
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