The Incentive Destination’s Role in Driving Business Performance

Reposted from Elite Meetings Blog - click here for link

As 2012 quickly progresses, trends in incentive travel destinations continues to be a hot topic. Budget constraints as well as economic, political and social pressures will heavily dictate the growth of incentive travel and destination choice. Yet, among all of these considerations that come into play when identifying a destination, a program’s ability to drive desired results among its participants should remain paramount. So, what’s most motivating to participants? Let’s look at the trends:

• First, where are most group travel programs going?  Mainly driven by costs, not to mention likely residual hesitancy and concerns around public perceptions, organizations continue to place greater emphasis on short-haul and domestic destinations. A 2012 Incentive Travel survey conducted by the Incentive Research Foundation revealed that 27 percent of respondents shifted from long-haul to North American destinations to meet budget constraints. According to the study, destinations reflect economic realities with 83 percent of planners providing incentive travel within the U.S., 55 percent going no further than the Caribbean, 52 percent including Europe and 29 percent targeting Central America. Less than 18 percent are considering destinations in Asia, South America, Africa or the Middle East.

• Second, what are incentive travel participants telling us?  Through various insights from the Site Foundation and the Incentive Travel Council, it seems incentive travel participants are willing to trade-off other design elements in favor of a more motivating destination. According to a recent U.S. National Study, titled the Participant’s Viewpoint, study participants stated that “aspects of the destination” were more important than other incentive travel design elements such as length of stay, activities, hotels, etc. Also, based upon both national and independent studies from Maritz Travel Company, destination selection ranks among one of the top motivational values for program participants.

• Third, what can we learn from leisure-based travel?  According to Stephanie Ramos of Maritz Journeys, “Individuals, couples and families are looking to make the most of a limited number of destination bound vacation days, and, a mix of both domestic and international destinations continues to weigh on travel planning decisions, with seasonality also playing a big part. The idea of introducing leisure-based travel is that it helps distinguish what we, as individuals, would most ideally like to experience and how that compares and differs with destination choices for incentive travel. A mix of choices will likely exist in your ideal list, whether it includes the likes of Queenstown, New Zealand; Hong Kong; or domestic choices such as Jackson Hole, Wyoming. Should leisure and incentive travel based destinations be all that different?”

Recalling The Return on Investment of U.S. Business Travel study at the advent of the recession, the U.S. Travel Association and Destination & Travel Foundation research revealed that an employee’s total base compensation would need to be increased by 8.5 percent to achieve the same effect of incentive travel. However, to simply provide a pay raise wouldn’t necessarily help drive higher-level business goals such as building trust, loyalty or morale, nor would it foster improvements in teamwork or job satisfaction. Additionally, from an ROI perspective, Incentive Travel was found to yield an ROI of more than $4:$1. These intangible, hard-to-measure benefits, on top of tangible fiscal returns, provide a unique perspective when it comes to the current need to stretch dollars. Businesses need to invest wisely in key areas to effectively deliver the greatest returns.

The spirit of this post is not about promoting domestic over international destinations, or vice versa. It’s more about identifying the greater need to provide destinations with the most motivational value for program participants that will ultimately help achieve business objectives. We’ve all had to hunker down and tighten our belts these past few years, while continuing to make a lot of hard decisions. When it comes to incenting, rewarding and recognizing employees, channel partners or customers, identifying the right program design is tougher than ever; especially when budgets remain constrained and the cost of rooms, air and food & beverage continues to rise.

Destinations play a keen role in program design and business value creation. Beyond the affinity values associated with any destination choice, surrounding elements hinge on what a program has to offer. Activities, tours, cultures, scenery, history, related group events and other onsite elements can be important decision factors on the destination. And, depending upon the diversity of interests, passions and preferences of your program participants, destination selection can either agree or disagree with what effectively motivates your audience. Where you decide to take your business can be greatly influenced by where you decide to take your next incentive travel program. Overall, we need to spend less time and effort on ways to stretch our incentive dollars across broad design inclusions and focus more on specific areas that matter the most.