We were at IMEX America last week and one of the key bits of information coming from the show for us, was the IRF Incentive Index Report. In it's fifth year of the collaboration between IRF and the SITE Foundation. The Incentive Travel Index, formerly the Incentive Travel Industry Index, alongside research partner Oxford Economics, have again created an indispensable annual report on the state of incentive travel, providing data on current and future evolution.
The 2023 online survey, fielded globally from May to July 2023, included nearly 2,500 incentive travel industry professionals, representing 19 industry verticals, and 83 countries, participating in the survey.
Key points of the report:
The evolving purpose of Incentive Travel:
Since the pandemic, there has been a significant swing from "hard power" objectives (Those focussed on ROI, sales led rewards) into more "soft power" (building company culture, collaborative and motivational).
There is little surprise here with all that has happened globally in the past couple of years. Businesses have been focussed on bringing people back into the workplace and rebuilding company culture/ This along with attracting new talent from those who may have moved on / changed career across that time. The report shows this trend across most sectors and regions. Only APAC region held a more hard power focus, with Western Europe and Nort America showing a huge swing towards soft power led incentive events.
Projections up to and including 2025 show a more hybrid approach. This being a more inclusive hard/soft balanced objective as companies move towards retaining talent, setting business targets and goals as well as building on company culture.
Growth, Budgets and Spending:
Many expect incentive travel activity and spend per person to rise above 2022 levels in coming years. Rising costs will help boost spend per person. There is no surprise here as we have all felt the in balance between budgets versus rising costs since 2022. But this isn't just a throw down acceptance that budgets need to increase by companies if they are to run incentive programs. It's also to do with the type of of incentive event and destination of choice since 2022 that are being looked at.
One thing we as an agency have always prided ourselves on, is looking and thinking outside the box in terms of incentive programs. The one size fits all, standard package event is no longer appealing or engaging for incentive delegates - Hurrah..!! So corporate planners and agencies now need to be more active, mobile and creative with planning. There is more demand for experience and cultural led itineraries, along with new destinations and venues of choice. We also see now with more soft power led incentives that group sizes are increasing which also impacts on budget.
Key challenges since 2022 and certainly into 2025 are rising costs of hotels and travel (air travel in particular). With both of these factors showing the highest percentage spend within budgets for incentives. Inflation and costs are always difficult to predict, but there is potential with hotel rates over the next couple of years becoming more in line with expectations. Availability for corporate travel should improve as the swing towards leisure since 2022 comes back to a normal standard. this in term you would think would improve options and costs with hotels for corporate travel and events.
Relationships within the Channel:
The recent operating environment has tested even the strongest relationships, with planning uncertainty and limitations such as airlift and resort availability. Survey results confirmed this situation, as among buyers and sellers, many indicated relationships are challenging, difficult, uncertain or weakened.
The hospitality sector suffered significantly in terms of numbers and talent during 2020-2022. Some will still say the industry has still to fully recover. This means as a planner - agency or corporate. We are finding significant challenges with suppliers in terms of availability, rates, service and turnaround of information back when needed. But in fairness to suppliers, they are faces with unprecedented challenges in staffing, availability, short lead time for events and a genuine lack of experience lost to the industry.
It is more important than ever to have open communication regularly within the channel for both buyer and supplier. As an agency we need educate and manage expectation with our clients in this area to avoid frustration and misunderstanding in planning and management of events. More than ever we need to show and add our value as an agency to corporate planners who simply do not have the time in their working day a dedicated agency has for research, planning and management of events.
Destination and venue of choice for incentives:
The importance in destination choice since 2022 for incentives has shown a huge swing in two areas. Firstly somewhere more "close to home" which leads direct back to budget and inflation costs. But also the impact of more sustainable ethos and political global issues and views that directly impact company culture and delegate views and rights.
Secondly in complete contrast, new destinations in new regions are being considered more and projected to increase into 2025. Call it bucket list, instagrammable or experience led destinations. Companies and their delegates are more open now to looking at new locations from those year on year tried and tested. We can also see this in choice of venues where an projected increase is seen in all inclusive resorts and cruises. No longer seen as the boozy sun fed jolly's, it is recognised the range of group activities and experiences that can be integrated within an all inclusive choice. As well as being beneficial on budget forecasting and spend across the incentive event.
Summary:
This is just an overview of the findings from the report. We would encourage our clients to download the full report with all the statistics and in depth research to assist in their budget and event planning needs moving into 2024 and beyond.
Overall we view the findings as incredibly positive as we move into a new phase in business post 2022. The value and impact of corporate events both business and reward / culture led continues to play a key role within companies. As an agency we work in partnership with our clients to best advise on key aspects and choices to deliver on the objectives of each event. But also to make them creative, engaging and memorable.
To discuss the details of the report further, or to start a discussion on your next incentive event. Get in touch with the team - info@wearemeat.com