What's Next for Incentive Travel?

In June, Successful Meetings’ sister publication, Incentive, convened a panel of industry professionals at the 21 Club in New York City to discuss the state of motivation, recognition, and incentives. Here are excerpts from that conversation dealing with the travel side of the incentive business.

LEO JAKOBSON: It’s been a rough year for incentives. Are things getting better?

BRENDA ANDERSON: It’s much better than last year. Though we never want to recreate the pain of the last two years, I think as an industry we’ve come out of it stronger because we’ve had to organize and get clear on our story. We were really good about talking to each other about what we did, but we weren’t good about having an elevator speech for Washington, DC, or for business partners. There is a strong group that’s come up from the U.S. Travel Association, the Meetings, Incentives, and Trade Show Council. They are really focusing on getting the value proposition out there, and they are getting the attention of the key lobbyists in [Washington], DC.

MELISSA VAN DYKE: At the 17th Annual Incentive Research Foundation Invitational in May, our participants said things had stabilized somewhat on the economic side, and on internal factors, but public perception still has the biggest impact on whether people can put together the programs that they really want to.

ROB DANNA: I think the folks that have gone through this incentive drought realized just how important group events and incentives are to their overall strategy. It gave everybody a control test of using incentives against not using incentives.

MIKE RYAN: There’s definitely an interest in talking about the role incentives can play in optimizing human capital. And it’s not just from the perspective of a trip or any other type of reward mechanism. It’s in terms of how do we focus our employees on behaviors that are critical to our outcomes? How do we get multiple generations of the workforce aligned? The marketplace is really right for our industry.

ANDERSON: We have to get real clear on how we measure that success to be able to sit in the C-suite and actually point to a specific ROI. We’ve been talking ROI for years, but the [2010] Site Index [survey] showed that less than 50 percent of companies are even using ROI metrics right now.

JIM DITTMAN: I’ve always believed that from bad comes good. There were times in the last 18 months when it was tough to see, but this was an opportunity for each one of us to look at our own businesses and say, “What do we do of worth, what do we do well, what do we have to do different?” And in the process—we have a ton of banks for clients, and virtually all them canceled their major programs at least for a year—it became a moment of zerobased budgeting. Now they’re going to go back to redo a big travel program, a multimillion-dollar travel program, [and they are saying], “Lets go back and examine: What do we get out of it emotionally, passionately, financially?” We had better be prepared to answer those things. This is going to present those of us who have used the time wisely great opportunities in the future.

JAKOBSON: Studies show trust is at record lows in the workplace. Can incentives help?

RYAN: Yes. The anxiety that comes from the economic problems is a change in mindset. You become less cooperative at work because you feel you need to become more defensive. And when you have an environment where people don’t share ideas or best practices, you can only succeed if others fail. Recognition, in terms of telling a story, is actually a very good exercise for organizations to recreate that cooperative culture, because you are sharing how somebody helped the client or helped a coworker or went the extra mile or came up with a better idea.

JAKOBSON: Last year Las Vegas got clobbered by perception. Now Arizona’s got its immigration law boycott. What effect will that have on incentives going to Arizona?

ANDERSON: From what our members are telling us, it’s more on the convention and meetings side, that they are feeling the hit. Not so much on the incentive side—yet, anyway. But it’ll be six months before we know the full picture of the damage.

JAKOBSON: Are clients still shying away from resorts and from going abroad? Where are companies doing programs now?

CHERRYL BRAZIER: We still get quite a lot of demand for the Caribbean. Our [Radisson and Radisson Blu] hotels are more in the four-star deluxe market, which is one where people can play it safe a little bit—they’re not seen to be too extravagant, they can still keep it fairly close to home. We have seen some demand for some of the cities in Europe pre- and post-cruise, or some of the Eastern Bloc countries where there’s still pretty good value. Those are fairly safe in terms of perception. I think if you’re touring Prague, Budapest, or something like that, it’s not quite as flashy.

ANDERSON: They’re looking for good values. So it’s not necessarily if it’s five or four [stars], it’s what it will give to the overall experience. Right now, with the euro tanking a little bit, it’s good value to go outbound again. But generally, I agree it’s been more regional.

CHRIS LYNN: I would concur to a degree, but I think there are flashes of optimism as opposed to a year ago. They’re still managing the perception, but people are prepared to look in the right direction rather than saying, “Can you come talk to me in 12 months?” Our biggest hurdle has just been taken away with the exchange rate. You can actually get the “wow” factor in a destination like London without paying the budget, because it’s kind of a “wow” just to go there. [And] London is a business capital before it’s a luxury capital. We are lucky that we are throwing another 20,000 hotels rooms at the world in the next two years.

We’re seeing incentive meetings, if you will, but also we’re seeing pure incentives that are smaller but coming from either private companies or entry sectors such as multilevel-marketing companies.

BRAZIER: A lot of the European incentives have been done like that for a while, where it seems to be more of a meeting and then add on the incentive side. We’re seeing more of that over here.

DANNA: We’re advising our clients not to change their destination choice, but maybe look at the content. Maybe it’s not the extravagance that we used to have, it’s not the big-name entertainment, so the destination remains the backdrop.

DITTMAN: We’re seeing a lot of interest in the Caribbean. Programs that would have gone to Europe have gone to the Caribbean or places like Palm Springs. But clearly the challenge is on the budget side. You have to do more with less, be more creative. So much automatic. Now when they haven’t been going for a while, you really have to think them through and justify them. The question is do we really have to spend as much as we have? The answer is invariably no. But you really need to have something great. As long as people keep saying we have to do something great, we’re in fine shape. It’s when they say, “Well, we don’t really need to do great things anymore,” that the nature of the incentive travel industry changes forever—and for the worse. That’s my great fear, that we’ve recalibrated at a lower level that could become somewhat permanent.

That would alter forever the definition of incentive travel that I’ve adhered to for the last three decades: To create an experience that people couldn’t duplicate on their own no matter how much money they had. That doesn’t necessarily mean that you have to have Sheryl Crow come in for the final banquet, but it means you need to exercise your creativity and originality, because if somebody comes home from an incentive trip and all they can talk about is the hotel, nice restaurants, and the golf, we failed miserably. We want them to remember brilliantly, 10 or 20 years from now, what the experience was like, why they got it, the effort that they put forth to earn the opportunity.

JAKOBSON: Perception hurt a lot of big sporting events last year. Are planners ready to embrace London’s 2012 Olympics?

LYNN: Requests are already coming through. I think it’s almost a good time from the economic climate. It’s a significant enough time away—two years— that now that we are on a journey of optimism, it’s a good target to aim at.

I think because of the size of the games—10 million tickets will be sold—it will create an exciting platform, whether you use the games or whether you want to be in a city that’s playing host to the games. We’ll probably be the first host city in history to be ready a year out, so we’ll be running as an Olympic City next year, with a number of test events throughout the year.

Originally published Sept. 1, 2010

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