It has been a decade since the recession of 2008-2009 painted incentive travel as an example of corporate excess and waste, and the impact of that shift in mindset continues to ripple through the industry. Incentive trips, corporate events, and meetings were not only cancelled that year, but companies continue to be mindful of this perception, being more budget-cautious less likely to reinstate or explore these programs.
What was lost during this time was how well-designed incentive travel programs are profit drivers, rather than cost centers, driving productivity and revenue. It seemed like no one was able to effectively communicate the value of incentive travel, or other performance incentives, to strengthen company performance.
Additionally, there is significant value to other types of corporate travel as it represents an opportunity to strengthen corporate culture, roll out new products and services, and provide training for both new and seasoned employees. All of these are critical to the continued profitability and productivity of companies.
The other element that was lost amid the rhetoric a decade ago was how many jobs rely on the incentive travel industry, including hotel workers, restaurant staff, taxi drivers, and a host of others. This is a significant economic driver in the communities where incentive travel had been thriving.
On the bright side, the most recent Incentive Travel Index Study, sponsored jointly by the Society for Travel Incentive Excellence (SITE), the Incentive Research Foundation (IRF), and the Financial and Insurance Conference Professionals (FICP), found that 58% of buyers and sellers of incentive travel services felt the perception of incentive travel was more positive than a decade ago. This suggests that much of the negativity surrounding incentive trips has dissipated with an improved economy. Budgets have increased for these programs as have the number of participants.
However, given that the Incentive Travel Index Study indicated that the primary purpose for incentive programs is to drive corporate growth and profitability, corporate travel programs are at a great risk if the economy begins another downturn.
As such, the travel industry needs an inoculation strategy to prevent a reoccurrence of what happened during the last recession. Rather than waiting until things turn for the worse, the time to start defending the value of travel programs is now. Here are a few ideas to help you set your strategy:
Focus on establishing the ROI of incentive travel
Creating ROI stories to proactively protect travel programs is something that needs to be done while the economy is still strong, so the narrative is thoroughly embedded within corporate cultures. Hotels and other incentive travel providers should focus on creating ROI stories that reinforce the key narrative that incentive travel programs primarily exist to increase profitability – and have data to support it. The Incentive Travel Index Study showed that buyers ranked increased sales and/or profitability for the overall company as the most important statement associated with incentive travel programs – but only 25% actually measure the ROI associated with incentive travel programs.
Similarly, quantifying the effectiveness of corporate meetings is also rarely done. While people may accept, at face value, these activities are valuable to companies, when budgets need to be cut, the hard evidence is missing to preserve these programs. Work with your past groups and programs to quantify the impact to their business of the events you host.
Find ways to add value without adding cost
As sellers, there are ways to add value to incentive travel without adding cost – which will further safeguard these programs and support ROI stories. Some ideas include factoring hotel resort fees into the group rate, eliminating banquet set-up fees, hosting a special welcome reception, supplying free upgrades, offering discounts on spa treatments, providing in-house catering services and giving more added-value service with a local touch.
Demonstrate agility and human-centered design thinking
Finally, it will become increasingly imperative for incentive travel and program managers to apply design thinking to their process. Incentive travel managers and program owners now need to entice an evermore traveled and experience-hungry generation and will need to continuously test new and different ways to engage attendees in transformational experiences.
Designing for these increasingly savvy travelers is going to challenge the typical methods of incentive program planning, calling on program designers to continuously test new ideas and incorporate changes quickly. They will need to adopt a design thinking mentality to encourage testing of continuous change and implementing the overlapping of ideas from many different domains.
Of course, these things are easier said than done. Some performance outcomes can be measured rather easily, while others are fuzzier. Often, positive outcomes of a travel program are more indirect, such as enhancing working relationships with teammates. While the economic outcomes from greater collaboration can usually be measured, they’re a step removed from catalysts like travel or incentive programs, which facilitate a more effective corporate culture. Nonetheless, economic indicators suggest that putting the thought and effort necessary to create these ROI stories is not going to be simply a nice- to-have, but rather a necessity if corporate travel programs will survive intact.
In order to keep incentive travel programs from sinking, the time is now to begin creating these important data-supported narratives. By readying the sails now, the travel industry will be able to weather the storm and won’t find itself scrambling to sustain itself much as it did a decade ago.