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Top 11 incentive travel trends for 2011
September 27, 2011
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The Incentive Research Foundation (IRF), based in St. Louis, MO., is a private not-for-profit foundation that funds research studies and develops products serving all segments of the global incentive industry. With permission, here are their Top 11 Incentive Travel Trends for 2011.

1. Cautious optimism emerges

At the 2010 IRF Roundtables, approximately four in 10 participants said the economy has had a slightly positive impact on their ability to plan and implement non-cash incentive (travel/merchandise) programs. Although this figure is considerably better than this time last year, optimism is rightfully tempered by the fragile and emerging state of the U.S economy.

2. Adjusting to a ‘new normal’
 
Fully 60 per cent of IRF roundtable participants said business seems to be settling into a new lower level of activity. Organizations are starting to adapt rather than reduce or eliminate programs. In the roundtable discussions, participants spoke of developing new ways to justify programs, reevaluating business models, and focusing only on business prospects with well-qualified potential. This includes moulding travel programs to fit into budgetary constraints, which often included a reduction in qualifiers, fewer management attendees, fewer room gifts and less than five-star properties.
 

  

3. Going, going, gone…

By 2015, more than 50 per cent of Brazilians, Indians and Chinese will be considered “middle income,” consumers. In January 2011, Google searches on “employee engagement” were 10 times higher in India than in the U.S., five times higher in Singapore and four times higher in South Africa. India is now ranked third in searches for “employee recognition” – just behind the U.S. and Philippines. And India was just behind the U.S. in searches for “sales incentives.” This shows immense promise for incentives services overseas.

4. Increasing government involvement 

All aspects of the incentive business face greater government influence. Along with the known travel pressures, the 2009 Card Accountability, Responsibility, and Disclosure Act installed new notification and fee requirements on all debit card providers. However, thanks to the work of the Network Branded Prepaid Card Association (NBPCA), the ECO-Gift Card Act was passed, extending the implementation deadline for the legislation to Jan. 31, 2011, ensuring that over a hundred million cards did not have to be destroyed.

5. Redefining extravagance vs. necessity

People are now more sensitive to – and wary of – extravagance in all forms. In the IRF roundtables, 33 per cent of participants saw a switch from international to domestic travel as well as a reduction in the length of trips.

6. Preferring experience over product

People are beginning to clamor more for experiences than products. Just over 40 per cent of roundtable participants say they expect that individual travel will increase as a result of this change in personal preference. Experience has always been a strong part of incentive travel, but now must also become more present in merchandise incentives.

7. Non-cash recognition on the rise

There is a strong interest in the use of non-financial motivators. According to McKinsey, three non-cash motivators: praise from immediate managers, attention from leaders, and a chance to direct projects are at least as effective as the three most highly rated monetary methods.

8. Changing social influencers

A number of indicators point toward a reprioritization of “what’s important” to many individuals. This trend impacts what we buy, where we invest and where we choose to work. In its Global Workforce Study, Towers Watson found that Corporate Social Responsibility (CSR) is the third most important driver of employee engagement overall. As such, incorporating elements of health and sustainability into programs moving forward will be crucial.

9. Communication = social media

Cost and service pressures will see more firms developing social media engagement strategies that encompass customers, prospects, suppliers and partners. Integrating technologies into one cohesive strategy will be key for successful incentive programs in the future.

10. It’s a virtual world

According to Bernstein Research, over the next 10 to 15 years, virtual meetings could replace up to 70 per cent of internal travel (to and from an organization’s own facilities) and 10 per cent of external travel (trips to visit customers).This could lead to an aggregate reduction of 21 per cent in corporate travel spending. Accommodating virtual products and solutions into an incentive plan will be an important part of programs moving forward.

11. Games have new meaning

The growth of computer games using token economies will continue in the retail markets and will be explored for application to employee and channel motivation programs. Multiple organizations have already added computer games to their incentive program promotion, communications and/or training. More and more games are using token economies (“points”) as an award for improved performance and it will only be a short time before gaming and token economies will be mainstream in employee and channel reward for performance programs.

For more information on the Incentive Research Foundation and a copy of the full report go to: www.theirf.org.

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