PULSE SURVEY
The Incentive Industry
Trends 2011
October 2010
Background and Survey Purpose
2
Beginning in August 2008 it was decided that an appropriate topic for the 2008 Pulse
Survey would be an incentive industry trends outlook for 2009 and with the continued
economic conditions, also an appropriate topic for the trends outlook for 2011.
Given that the Incentive Research Foundation (IRF) is charged with advancing the science
of incentives, it surveyed industry professionals to obtain their opinions about the more
salient trends affecting the industry during 2011.
To this end, the IRF asked these professionals
p
q
questions on trends with regard
g
to incentive
travel programs, merchandise non-cash programs, and budget changes forecast for 2011.
In addition to the current topic on industry trends, the IRF tracks core issues of continuing
interest to the industry:
• The extent to which company financial forecasts influence incentive programs;
• The effect of competitor reactions on company incentive programs; and
others’ perceptions of company incentive programs
programs.
• Sensitivity to others
Research Methods
3
IInvitations
it ti
tto participate
ti i t iin thi
this online
li survey were sentt tto 2187 iincentive
ti
providers, suppliers to the industry and corporate incentive travel buyers.
Th 130 survey participants
The
ti i
t can b
be categorized
t
i d as ffollows…
ll
•
•
•
•
•
Provider (e.g., incentive company) (60.0%)
Corporate
p
incentive travel buyer
y ((16.2%)
%)
Supplier, (e.g., hotelier) (11.5%)
Other (12.3%)
…and represents, after undeliverable emails and out of office adjustments are made, a
espo se rate
a e of
o 7%
%
response
Data collection was conducted September 13th through September 30th,
2010.
Highlights: Core Issues
4
100%
Findings indicate that
the trends have
stabilized and are on an
positive upward trend
for each of the core
issues since July 2009.
However, the trends
remain lower than
reported in 2008.
The positi
positive
e trend with
ith
respect to the
perceptions of program
extravagance is
g at a faster
“rebounding”
pace when compared
with the other two core
issues.
90%
80%
70%
60%
50%
40%
30%
93%
84% 86%
81%
75% 75% 73% 77%
69%
64%
64% 63%
64%
61%
52%
2%
47%
40% 39% 43%
45%
31%
20%
10%
0%
Sep-08 Oct-08 Mar-09 Jul-09 Nov-09 May-10 Oct-10
The company financial forecast influences the design and
implementation of incentive programs
Competitors’ reactions to programs impact the products and
services included in company incentive programs
Sensitive
S
iti tto perceptions
ti
off program extravagance
t
tto the
th extent
t t
that it would impact the type of company program awards and
inclusions
T
Currentt Topic
C
i
Industryy Trends for 2011
5
Incentive Travel Programs
Merchandise Non-Cash Programs
ROI – Budget Considerations
Perceived Impact of the Economy on Ability to Plan
and Implement Incentive Travel Programs
6
Respondents
espo de ts in the
t e current
cu e t
survey (October 2010) continue
to be more optimistic and
consider the economy as
having a “more”
more positive impact
on their ability to plan and
implement incentive travel
programs when compared with
th 2009 results.
the
lt
100
18
80
15
5
5
9
9
8
43
20
14
7
8
30
Significantly negative
Moderately negative
60
18
Slightly negative
38
27
22
Sli htl positive
Slightly
iti
21
40
No impact
11
Moderately positive
Significantly positive
• Significantly negative 5% October
2010 vs
vs. 5% May 2010
• All negative impacts 27% May
2010 vs. 28% October 2010.
In your opinion in 2009, what impact will the economy have on
your ability to plan and implement travel incentive programs?
(N=130)
21
20
4
3
0
4
6
8
Not involved
20
10
8
6
5
23
23
5
8
0
Mar-09 Jul-09 Nov-09 May-10 Oct-10
Techniques Used In 2011 To Enhance The Air Transportation Portion Of Incentive Travel Programs, What Component? 7
A majority
j y ((45%, 43%)) of
respondents anticipate that All costs
for air transportation-related
expenses and Roundtrip airports
transfers will be included and
component off Incentive Travel
Programs in 2011.
All costs for air
transportation-related
expenses will be included
45%
Roundtrip airport transfers
will
ill b
be iincluded
l d d
43%
Only tickets will be provided
• 28% indicate that Only tickets will
be provided.
• 6% indicate seating upgrades will
be included.
• 0% indicate
i di t tthat
h t airline
i li club
l b passes
will be included.
With regard to the air transportation portion of incentive
travel programs, what techniques will be used in 2011 to
enhance this component? Check all that apply. (n
(n=117)
117)
28%
Seating upgrades will be
included
Airline club passes will be
included
6%
0%
0%
50%
Anticipated Changes In 2011 With Regards To Incentive Travel
Program Destinations
8
The majority (52%) of respondents
anticipate no change with respect to
the program destinations for
Incentive Travel Programs in 2011.
• 28% indicate that they anticipate a
change from “International to
Domestic” with regards to the travel
program destinations.
In 2011, do you anticipate any of the following changes will
be made with regard to incentive travel program
destinations? Check all that apply. (n=117)
No change
52%
From international to
domestic
28%
From domestic to
international
15%
From cruise to land
4%
From land to cruise
4%
0%
20% 40% 60%
Anticipated Changes In 2011 With Regards To Incentive Travel Accommodations
9
A majority (40%) of respondents
anticipate
i i
reducing
d i the
h totall number
b
of days/nights for the
accommodations portion of Incentive
Travel Programs in 2011.
• 32% indicate that number of rooms
will be reduced.
• 27% indicate a change to “all
inclusive” pricing options
• 26% indicate that On-site
inclusions per participant will be
decreased.
Total number of days/nights
reduced
40%
32%
Number of rooms reduced
Change to "all inclusive" pricing
options
27%
On-site inclusions per
participant decreased
26%
19%
No change
Number of room upgrades
pg
reduced
15%
On-site inclusions per
participant increased
9%
Total number of rooms
increased
9%
Total number of days/nights
increased
Number of room upgrades
increased
With regard to accommodations for incentive travel
programs in 2011 what changes, if any, will be made?
Check all that apply.(n=117)
7%
3%
0%
20% 40% 60%
Anticipated Changes In 2010 With Regards To Sponsored
Non-Meal Related Components
10
Slightly less than half (49%) of
respondents
d
anticipate
i i
N
No Ch
Change
with regards to Sponsored Non-Meal
Related Components for Incentive
Travel Programs in 2011.
Significantly reduced
0%
6%
Moderately reduced
20%
Slightly reduced
• 26% indicate that Sponsored NonNonMeal related components will be
Reduced to some degree, and an
equal percentage indicated some
degree of Increase
13%
Slightly increased
10%
%
Moderatelyy increased
Significantly increased
With regard to the sponsored (paid by your company) nonnon
meal related components for incentive travel programs,
what changes in 2011, if any, will be made? Will non-meal
related components be… (n=116)
49%
No change
2%
0%
20%
40%
60%
Anticipated Changes With The Involvement Of Procurement And Purchasing In 2011 Travel Incentive Programs
11
While a third (33%)
(
) of the
respondents anticipate No Change
with regards to involvement of
procurement and purchasing for
Incentive Travel Programs in 2011,
65% agree that procurement
involvement will increase by
some degree in 2011.
Significantly decrease
Moderately decrease
Slightly decrease
1%
0%
3%
33%
Remain unchanged
• 33% indicate that procurement and purchasing
involvement will “Slightly Increase” in 2011.
• 22% indicate that procurement and purchasing
involvement will “Moderately
y Increase” in 2011.
• 10% indicate that procurement and purchasing
involvement will “Slightly Increase” in 2011.
With regard to planning and implementing incentive travel
programs, do you anticipate the involvement of procurement
and purchasing in 2011 to… (n=116)
32%
Slightly increase
22%
%
Moderatelyy increase
Significantly increase
10%
0% 10% 20% 30% 40%
Anticipated Changes In 2011 Incentive Travel Program Budgets
12
One third (34%) of the respondents
anticipate
ti i t b
budgets
d t ffor IIncentive
ti
Travel Programs in 2011 to “Remain
Unchanged”.
Significantly decrease
Moderately decrease
1%
3%
20%
Slightly decrease
• 20% indicate that budgets for
Incentive Travel Programs in 2011
to “Slightly
Slightly Decrease”
Decrease .
• Only a combined 43% indicate that
that budgets for Incentive Travel
Programs in 2011 to increase.
32%
Slightly increase
9%
%
Moderatelyy increase
Significantly increase
With regard to the sponsored (paid by your company) nonnon
meal related components for incentive travel programs,
what changes in 2010, if any, will be made? Will non-meal
related components be… n=116)
34%
Remain unchanged
3%
0% 10% 20% 30% 40%
2011 Trend Strategy For The Consideration Of Award Strategy Moving
(Either Temporarily Or Permanently) From "Group Trips" To
"Individual Travel Packages"
13
Slightly more than half (54%) of the
respondents
d
d
do not anticipate
i i
changing (either temporarily or
permanently) from "group trips" to
"individual travel packages" in 2011.
Significantly decrease
3%
Moderately decrease
2%
5%
Slightly decrease
• A combined 10% indicate that the
consideration of award strategy moving (either
temporarily or permanently) from "group trips"
to "individual
individual travel packages“
packages in 2011 to
decrease.
• Only a combined 36% indicate that the
consideration of award strategy moving (either
temporarily or permanently) from "group trips"
to "individual
individual travel packages“
packages to increase.
increase
22%
Slightly increase
13%
%
Moderatelyy increase
Significantly increase
With regard to planning and implementing incentive travel
award programs, do you anticipate the consideration of
award strategy moving (either temporarily or permanently)
from "group trips" to "individual travel packages" to…n=116)
54%
Remain unchanged
2%
0%
20%
40%
60%
Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs
14
In October 2010, less respondents
anticipate the economic downturn to
have a continued negative effect on
their ability to plan and implement
merchandise non-cash incentive
programs than in 2009.
100
5
90
16
60
40
30
20
10
0
In your opinion in 2011, what impact will the economy have on
the ability to plan and implement merchandise non-cash
incentive programs? Will the impact of the economy in 2011
be…(n=130)
0
5
2
4
18
18
19
15
21
23
17
50
• Negative impact 23% in October 2010
vs. 24% in May 2010.
• No impact 19% in October 2010 vs.
21% in May 2010.
• Positive impact 45% in October vs. 42%
i M
in
May 2010
2010.
7
8
10
80
70
5
9
7
4
19
20
33
16
8
2
20
Moderately
negative
Sli h l negative
Slightly
i
No impact
11
8
1
Significantly
negative
29
35
Slightly positive
Moderately positive
10
2
15
9
2
13
Significantly
positive
p
Not involved
Note: 2008 vs. 2009 percentages not comparable because “not
involved” response category added in 2009 survey.
Anticipated Changes In 2011 With Regards To Merchandise
Non-cash Incentive Programs Award Selections
15
41% of respondents anticipated
“Increased use of debit/gift cards” as
an award selection with regards to
2011 Merchandise Non-Cash
Incentive programs.
Increased use of debit/gift
cards
41%
Included individual travel
as an option
37%
Included experiencerelated
l t d (SPA,
(SPA event…
t
30%
24%
Added debit/gift cards
• 37% indicate that the use Included
individual travel as an option will be
i
increased
d in
i 2011.
2011
• 30% indicate that the use of Included
experience-related (SPA, event tickets,
etc.) as an option will be increased in
2011
2011.
No change
Added merchandise
17%
Decreased merchandise
award value
17%
Increased merchandise
award value
16%
Decreased use of debit/gift
cards
With regard to merchandise non-cash
non cash incentive programs,
what changes, if any, will be made in 2011 with award
selections? Check all that apply. (n=)
20%
0%
10%
20% 40% 60%
Anticipated Changes With The Involvement Of Procurement And
Purchasing In 2011 Merchandise Non-Cash Incentive Programs
16
36% of respondents
p
anticipate
p
no
change with regards to involvement
of procurement and purchasing for
Merchandise Non-Cash Incentive
Programs in 2011, most all agree
that their involvement will increase
by some degree in 2011.
Significantly decrease
Moderately decrease
Slightly decrease
2%
0%
3%
36%
Remain unchanged
• 30% indicate that procurement and purchasing
involvement will “Slightly Increase” in 2011.
• 22% indicate that procurement and purchasing
involvement will “Moderately Increase” in 2011.
• Only 7% indicate the procurement and
purchasing involvement will increase by some
degree in 2011.
With regard to planning and implementing merchandise nonnon
cash incentive programs, do you anticipate the involvement
of procurement and purchasing in 2011 to…(n=113)
30%
Slightly increase
22%
%
Moderatelyy increase
Significantly increase
7%
0% 10% 20% 30% 40%
Anticipated Changes In 2011 Merchandise Non-Cash
Incentive Program Budgets
17
Of note, a combined 55% indicate
th t budgets
that
b d t ffor Merchandise
M h di N
NonCash Incentive Programs in 2011 to
increase by some degree.
• Only 10% indicate that budgets for
Merchandise Non-Cash Incentive
Programs in 2011 to “Slightly
Decrease”.
Decrease
• 37% of respondents anticipate budgets
for Merchandise Non-Cash Incentive
Programs in 2011 to “Remain
g
Unchanged”.
Significantly decrease
1%
Moderately decrease
0%
35%
Remain unchanged
42%
Slightly increase
10%
%
Moderatelyy increase
Significantly increase
In 2010, do you anticipate budgets for merchandise non
noncash incentive programs in general to…(n=113)
10%
Slightly decrease
0%
3%
20%
40%
60%
Generall Issues
G
I
Of Interest to the Industry
18
Budget Changes for 2011 Incentive Program Elements
Anticipated Changes Incentive Program Elements
19
In general, respondents indicated
th t they
that
th anticipate
ti i t mostt iincentive
ti
program elements to remain the
same in 2011.
• The following elements received ratings
of Increase of greater than 20% for
2011:
2011
• Incentive Company involvement (25%)
• Number of total qualifiers (22%)
• Awards budget (21%)
25% 17%
53%
5%
Number of total qualifiers
22%
26%
44%
8%
Awards budget
21%
25%
48%
6%
Communications budget
19%
27%
48%
6%
Incentive Company involvement
Incentive program non-meal
components
17% 25%
33%
Per diem cash allowances 7%
30%
Administration budget 4%
35%
0%
In 2011, do you anticipate the following incentive program
elements will increase, decrease or remain the same?
(n=130)
41%
%
Incentive p
program
g
on-site g
gifts 14%
%
Incentive Company management
10%
fees
49%
20%
9%
38%
%
6%
%
48%
48%
8%
15%
56%
40%
60%
80%
Increase
Decrease
Remain the Same
Don’t Know/No Opinion
5%
100%
Changes To 2011 Incentive Program As A Result Of The
Economic Conditions In 2010
20
37% of the respondents anticipate no
changes
h
tto th
the b
budget
d t ffor IIncentive
ti
Travel Programs in 2011 as a result
of the economic conditions in 2010.
• 22% iindicate
di t th
thatt th
thatt b
budgets
d t ffor IIncentive
ti
Travel Programs in 2011 have been reduced
as a result of the economic conditions in 2010.
• 17% indicate that that budgets for Incentive
Travel Programs in 2011 have increased as a
result of the economic conditions in 2010
2010.
• 16% indicate that no budget change, but
reduced the travel, while 6% indicate no
budget change, but replaced the travel for the
Travel Incentive Programs in 2011 as a result
of the economic conditions in 2010
2010.
• 2% indicate the 2011 program has been
eliminated entirely as a result of the economic
conditions in 201-.
As a result of the economic conditions in 2010, have you
made a change to your 2010 incentive program, and if so
have you… (n=130)
37%
No changes
Reduced the budget for
2011
22%
Increased the budget in
2011
17%
No b
N
budget
d t change,
h
b
butt
reduced the travel
16%
No budget change, but
replaced the travel
incentive
Eliminated the 2011
program entirely
6%
2%
0% 10% 20% 30% 40%
Impact of Budget Changes in 2011 on Employee Morale
21
No budget change, but replaced
the travel incentive (n=8)
In general,
general respondents indicated
that changes to their 2011 Incentive
travel program will have either a
“decreased impact” or “remain the
same” on Employee morale.
same
morale
25%
No budget change, but reduced
the travel (n=21)
75%
43%
Eliminated the 2010 program
entirely (n=2)
43%
100%
31%
Reduced the Budget (n=29)
45%
14%
0%
24%
You indicated that you have [inserted response on
change to their program], what impact has this has on…
0%
Increase
Decrease
20%
40%
Remain Same
60%
80% 100%
Don't Know
Impact of Budget Changes in 2011 on Sales Results
22
No budget change, but replaced
the travel incentive (n=8)
In general, most respondents
indicated that changes to their 2011
Incentive travel program will have no
impact on Sales Results.
75%
No budget change, but reduced
14%
the travel (n=21)
Eliminated the 2010 program
entirely (n=2)
25%
62%
24%
100%
Reduced the Budget (n=29) 10% 24%
38%
28%
You indicated that you have [inserted response on
change to their program], what impact has this has on…
0%
Increase
Decrease
20%
40%
Remain Same
60%
80% 100%
Don't Know
Impact of Budget Changes in 2011 on Profitability Results
23
In general, respondents indicated
that changes to their 2011 Incentive
travel program will have no impact
on Profitability Results.
No budget change, but replaced
13%
the travel incentive (n=8)
63%
No budget change, but reduced
10%19%
the travel (n=21)
33%
Eliminated the 2010 program
entirely (n=2)
Reduced the Budget (n=29)
25%
38%
100%
21% 21%
28%
31%
You indicated that you have [inserted response on
change to their program], what impact has this has on…
0%
Increase
Decrease
20%
40%
Remain Same
60%
80% 100%
Don't Know
Corporate Social Responsibility (CSR) As Part Of Your
Programs
24
The majority (51%) of respondents
i di t that
indicate
th t “S
“Sometimes
ti
” employees
l
or customers are requesting CSR as
part the programs.
• 26% indicate that they never had a
request for CSR as part of a
program.
• 16% indicate that they are often
asked to include CSR as part of
their programs, while
• 7% indicate that CSR is required
every time.
Regarding CSR (Corporate Social Responsibility) as part of
your programs, are your employees or customers requesting
CSR components: (n=130)
Never had a request
for CSR as part of a
program
26%
Sometimes
51%
Often
Every Time
0%
16%
7%
20%
40%
60%
Use of Social Media as Elements of Programs
25
The majority (58%) of respondents
indicate social media iis
su
used
sed “To
To
communicate with participants prior
to an Incentive or Recognition
Programs”
• 36% indicate that they use social
media to communicate with
participants during an Incentive or
Recognition Programs
• 27% indicate that they use social
media to communicate with
participants after an Incentive or
Recognition Programs
• 3% indicate that they do not use
social media as an element of the
program.
For what elements of your program, or business, are you
currently using social media (blogs, twitter, linked in groups,
wikis)…(n=130)
T communicate
To
i t with
ith
participants prior to an Incentive
or Recognition Programs
58%
To communicate with
participants during an Incentive
or Recognition Programs
36%
Other (Please specify)
27%
To communicate with
participants after an Incentive or
Recognition Programs
26%
24%
To market your business
We do not use Social Media at
all
3%
0% 20%40%60%80%
Predicting Business in 2011 & 2010
26
In general, respondents predict
business to be better in both 2011
and 2012.
2012
5%
5%
2011
5%
Are you predicting business in 2011/2012 to be: (n=130)
0%
77%
23%
20%
14%
68%
40%
60%
4%
80%
Worse than in 2010
The same as 2010
Better than 2010
Don't Know
100%
Is The Incentive Industry Doing Enough To Demonstrate The
Business Value Of Incentives?
27
11% of the respondents indicate that they
feel the industry is doing enough to
demonstrate the business value of
incentives.
• 66% feel that more Business
spokespeople (C-level support) is
needed.
• 55% indicate
i di t th
thatt more case studies
t di
would assist in demonstrating the
business value of incentives.
• 47% indicate that testimonials would
assist in demonstrating the business
value of incentives.
Yes, The industry is doing
enough
Business spokespeople (C-level
support)
66%
55%
More case studies
47%
Testimonials
45%
Government lobbying
37%
Academic articles
Other
Is the incentive industry doing enough to demonstrate the
business value of incentives? If no, what else should be
done? …(n=130)
11%
4%
0% 20%40%60%80%