When Ray Bloom, chairman of IMEX, looks to China and India, he likes what he sees. He's quick to point out that between them, the two countries account for more than one third of the world's 6.5 billion people. "A lot of the current incentive business in this part of the world is generated by multinational corporations," Bloom says, "many of them American-based." It seems globalization is going to be very good for the incentive business.
That may be somewhat true now. It will definitely be true in the not so distant future. But at this moment, training programs, more than incentives, are leading the way in terms of Western companies establishing meaningful contact with this part of the world. Training in China often involves contact with other cultures, Western culture in particular. So far, though, Laurie Underwood, author of China CEO: Voices of Experience From 20 International Business Leaders (Wiley, 2006), doesn't think that travel for motivation or even for its own sake is hugely popular. "Vacation is still quite a new idea here," she says. "It feels like blowing all your money on a week, especially for the older generation in the workforce."
But she adds that travel is gaining in popularity with young people. According to the Pacific Asia Travel Association, travel from China to other Asia-Pacific countries has increased by about 20 percent each year since 2001. After having their movement restricted for decades, says Jon Hutchison, head of the Sydney Convention and Visitors Bureau, the Chinese have a huge pent-up desire to see the world. In Sydney, that desire is helping to ease the impact of slow business out of other countries.
"We're not seeing as many American incentives as we'd like," Hutchison says. "But we're really excited about the potential of doing a lot of business with China."
Chinese consumers, and therefore Chinese employees, are hearing more messages about travel as destinations open marketing offices in China. Australia is the pioneer here: Tourism Australia has offices in Shanghai and Beijing; Melbourne opened offices this summer not in mainland China, but in Hong Kong and Singapore; Sydney also has a Hong Kong office.
For now, the Chinese government doesn't make it easy to open a tourism marketing office within its borders. Only nations with approved destination status can do so, with few exceptions. One such exception is the Nevada Tourism Commission, whose Beijing office is the only U.S. destination marketing operation in China. In early September, the Monaco Government Tourist and Convention Authority (MGTCA) announced the opening of its office in Shanghai.
Michel Bouquier, president of the MGTCA, has two major approaches for installing the Monaco brand in the Chinese market: "to capture up-market leisure tourism, and to introduce our destination as an essential in the Chinese incentives market, which has been in constant development for two years."
Incentive Travel, Made in China
When it comes to presenting incentive travel programs to a Chinese audience, simply duplicating methods used elsewhere is not advisable.
The Chinese desire learning experiences when they travel, says Sandra Chipchase, CEO of the Melbourne Convention and Visitors Bureau. Guided tours of cultural and historical landmarks should always be on the itinerary. And as a group they may be more receptive than Americans to job-related training while on the road. Sydney's Hutchison adds: "If they can meet a state dignitary, say a governor or mayor, that's really appreciated. Not something you'd set up with an American group, but the Chinese appreciate it." But in other ways their interests more closely mirror those of stateside employees—beaches, adventure, and volunteer projects are popular activities.
"China can move very fast, and is skipping steps all the time," says Max Brown, managing director of training for Salt Lake City-based O.C. Tanner. "Look what happened with tele-communications. [The Chinese] started with almost no land line phones at all, and went straight to cell phones almost overnight. In my line of work, you might think you could take a product from ten years ago and apply it over there, but that doesn't work. They know they can get all the information. The Chinese are very smart, and when they get hold of a good idea they adopt it quickly."
"History repeats itself," says Lex Granaada, president of the Society of Incentive & Travel Executives. "Financials, pharmaceuticals—the same industries that pull the wagon in Europe are doing so in China."
Breaking into India
With 1.3 billion people and the world's fastest growing economy, China is a big market in Asia. But it is not the only one. Businesses employing and selling to India's one billion citizens are definitely a secondary target. "Everyone's trying to find out how to get into India," says Lisa Hopkins, regional business director of Asia Pacific meetings and events for Minneapolis-based Carlson Marketing. "One of the things [incentive firms] are finding is [that companies there employ a large] number of employees. It's not unheard of to have 20,000 employees in one building. It is an amazing, dynamic country with staggering opportunity."
The Two Indias
Like most companies doing business in an emerging market, incentive providers find a wide gulf between the local divisions of multinational corporations and local firms. Most of Carlson's business in the region is with the former, focusing on IT, automotive, pharmaceutical, and financial services companies. "In India, the sales [managers] know what [incentives] are all about," Hopkins says. "But India is not where they sell. The people we're talking to are in marketing and human resources. The staff turnover rate in India is huge. We are starting to talk to them about retention programs." The key, she says, is showing them that these programs are worth the money. "They want to see the return."
For the 10 percent of Carlson's business that involves local companies, incentives are mostly used in channel partner programs, Hopkins says. Steve Hibberd, managing director of international business for Accumulate, a Melbourne, Australia-based full-service incentive house, agrees that channel sales programs are the most common incentive run by Indian firms. He notes that these tend to be cash-based and says that using travel can be both a point of differentiation for new players and a way to communicate with those partners.
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The Rest of the World
Asia isn't the only market where incentive providers are looking to advance. Parts of Western Europe have yet to be cracked, to say nothing of Russia and the European Union's (EU) newest members, like Poland and the Czech Republic. And then there's Latin America, Africa, and the Middle East to consider. In Latin America—Mexico, Central and South America, and the Caribbean—the state of the incentive market often rises and falls with the local economy, says Claudio Ayub, vice president of sales for Grass Roots BitTime, one of Latin America's largest incentive suppliers. He points to Venezuela, where a strong incentive market is being undercut by political turmoil. As for the smaller countries, notably Central America and the Caribbean, incentive business tends to be minimal.