Published in Return on Performance Magazine - 2nd Quarter 2009
It’s no secret the incentive travel industry has been under tremendous pressure over the past several months. As the economy began its unfortunate and downward spiral, the virtual vise became tighter and tighter for companies that had to justify every dollar spent. With the advent of the American government’s Troubled Asset Relief Program (TARP), a series of unfortunate events created a seemingly perfect storm on the use and benefits associated with incentive travel programs. A massive level of negative, and often precarious, media attention generated an ominous surge of public and government outcry.
None of us seeks to validate lavish and ludicrous expenses racked up by out-of-control executives. But it’s important to note the magnitude at which the hospitality and travel industry has been affected by this uproar. The U.S. Labor Department reported a loss of nearly 200,000 travel-related jobs in 2008 and predicts an additional loss of 247,000 jobs in 2009. During the first two months of 2009 alone, the U.S. lodging industry lost more than $1 billion in revenue from the cancellation of corporate meetings and events. Travel incentives clearly have merit in our society at large, and at our companies, too.
Organizations -- especially publicly held companies -- are now being held accountable as never before to share how their incentive travel program decisions are made. Not only that, executives must demonstrate the values these programs deliver against associated expenses.
While determining hard ROI figures can be difficult, the established merits of incentive travel are easy to recite. From driving sales, strengthening channel relationships, improving employee morale and loyalty, rewarding and recognizing performance excellence and a variety of other targeted objectives, incentive travel programs provide substantial value to companies. A variety of studies have been done to support these statements; the Incentive Travel Council recommends the following key resources:
- The U.S. Travel Association http://www.ustravel.org/
- Incentive Marketing Association http://www.ropmagazine.com/
- Incentive Research Foundation http://www.theirf.org/
- SITE http://www.siteglobal.com/
- The Forum for People Performance Management and Measurement http://www.performanceforum.org/
In cases where the values of Incentive Travel programs aren’t necessarily in question but rather the spend itself, think about how you'll continue to strive towards achieving organizational goals during a down economy - it's already challenging in and of itself. Consider your participants' perspectives. Should public or shareholder perception be of concern, think long term. Reducing or taking away an incentive travel program from your employees, channel partners or customers can have negative consequences against the very objectives originally targeted. At the end of the year, the gap created through the incentive travel program’s absence will show itself in the worst possible place - your bottom line.
So, at the end of the day, in good times as well as in bad, when every penny counts and you want to ensure you’re getting the most value out of your spend dollars, think about how that can be done. Few alternatives provide the same degree of motivational power to drive performance and lend the levels of incremental value and sustained benefits as Incentive Travel programs.
