PULSE SURVEY
The Incentive Industry Trends 2010 January 2010
Background and Survey Purpose 2
In August 2008 it was decided that an appropriate topic for the final 2008 Pulse Survey would be an incentive industry trends outlook for 2009, Mid-Year 2009 and with the continued economic downturn, also an appropriate topic for the trends outlook for 2010. Given that the Incentive Research Foundation (IRF) is charged with advancing the science of incentives, incentives it surveyed industry professionals to obtain their opinions about the more salient trends affecting the industry during 2009 and leading into 2010.
To this end, end the IRF asked these professionals questions on trends with regard to incentive travel programs, merchandise non-cash programs, and budget changes forecast for 2010.
In I addition dditi to t the th currentt topic t i on industry i d t trends, t d the th IRF tracks t k core issues i off continuing ti i interest to the industry: • The extent to which company p y financial forecasts influence incentive p programs; g ; • The effect of competitor reactions on company incentive programs; and • Sensitivity to others’ perceptions of company incentive programs.
Research Methods 3
IInvitations it ti to t participate ti i t iin thi this online li survey were sentt tto 618 iincentive ti providers, suppliers to the industry and corporate incentive travel buyers. Th 103 survey participants The ti i t can b be categorized t i d as ffollows… ll • • • • •
Incentive travel provider (53%) p incentive travel buyer y ((28%) %) Corporate Supplier, e.g., hotelier (13%) Other (6%) …and represents, after undeliverable emails and out of office adjustments are made, a espo se rate a e of o 18.8% 8 8% response
Data collection was conducted October 19th through November 17th, 2009.
Highlights: Core Issues 4 100% 90% 80%
Findings indicate that the trends are stabilizing for each of the core issues since March 2009. However the However, trends remain significantly lower than in 2008.
84%
70% 60% 50% 40%
86% 75%
75%
64%
63%
73%
77% 61%
52%
47% 45%
40%
39%
31%
30% 20% 10% 0% Sep-08 p
Oct-08
Mar-09
Jul-09
11/1/2009
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 to t the th extent t t that it would impact the type of company program awards and inclusions
Current Topic I d t Trends Industry T d for f Mid Year Y 2009/2010 9/ 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 in the current survey (November 2009) appear to be more optimistic and consider the economy as having a “more” positive impact on their ability to plan and implement incentive travel programs when compared with the previous July & March results.
100 16
80
18
15
43 20
23 30
Significantly negative Moderately negative
60
18
Slightly negative No impact
22
40
21
39
Slightly positive
11
Moderately positive Significantly positive
• Significantly g y negative g 15% November 2009 vs. 18% July 2009 • All negative impacts 53% November 2009 vs. 69% July 2009. In your opinion in 2009, what impact will the economy have on your ability to plan and implement travel incentive programs? (October Base=79; March Base=102, July Base=103)
21
20 14
0
1 3 4
4 3 0 4
Oct-08 Mar-09
6 8
Not involved
20
10
8
6
5
Jul-09
Nov-09
Techniques Used In 2010 To Enhance The Air Transportation Portion Of Incentive Travel Programs, What Component? 7
A majority (53%) of respondents anticipate i i that h roundtrip d i airport i transfers will be included with the Air Transportation portion of Incentive Travel Programs in 2010.
• 45% indicate that All costs for air transportation-related p expenses p will be included. • 39% indicate that Only tickets will be provided.
Roundtrip airport transfers will be included
53
All costs for air transportation-related transportation related expenses will be included
45
Only tickets will be provided
39
Seating upgrades will be included
3
Airline club passes will be included With regard to the air transportation portion of incentive travel programs, what techniques will be used in 2010 to enhance this component? Check all that apply. (n (n=103) 103)
0
0
20
40
60
Anticipated Changes In 2010 With Regards To Incentive Travel Program Destinations 8
The majority (47%) of respondents anticipate more domestic destinations than international for Incentive Travel Programs in 2010.
From international to domestic
47
From land to cruise
• 44% indicate that they anticipate “No Change” with regards to the travel program destinations.
14
From domestic to international
8
From cruise to land
0
No change In 2010, do you anticipate any of the following changes will be made with regard to incentive travel program destinations? Check all that apply. (n=103)
44
0
20
40
60
Anticipated Changes In 2010 With Regards To Incentive Travel Accommodations 9
A majority (62%) of respondents anticipate ti i t reducing d i th the number b off rooms for accommodations portion of Incentive Travel Programs in 2010.
62
Number of rooms reduced On-site inclusions per participant decreased
58
Total number of days/nights reduced
• 58% indicate that On-site inclusions per participant will be decreased. • 53% indicate that Total number of days/nights will be reduced .
53
Number of room upgrades reduced
27
Change to “all all inclusive inclusive” pricing options
21
On-site inclusions per participant increased
2
Number of room upgrades pg increased
1 16
No change With regard to accommodations for incentive travel programs in 2010, what changes, if any, will be made? Check all that apply.(n=103)
0
20
40
60
80
Anticipated Changes In 2010 With Regards To Sponsored Non-Meal Related Components 10
A majority (41%) of respondents anticipate i i N No Ch Change with i h regards d to Sponsored Non-Meal Related Components for Incentive Travel Programs in 2010.
7
Significantly reduced
13
Moderately reduced
32
Slightly reduced
• 32% indicate that Sponsored NonMeal related components will be “Slightly Slightly Reduced” Reduced in 2010 • Only 7% indicate that that Sponsored Non-Meal related components will be “Moderately Increased” in 2010 Increased 2010.
41
No change
0
Slightly increased
7
Moderatelyy increased
0
Significantly increased 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=103)
0
20
40
60
Anticipated Changes With The Involvement Of Procurement And Purchasing In 2010 Travel Incentive Programs 11
While the majority j y ((36%)) of respondents anticipate No Change with regards to involvement of procurement and purchasing for Incentive Travel Programs in 2010, almost all agree that their involvement will increase by some degree in 2010.
Significantly decrease
0
Moderately decrease
0 6
Slightly decrease
36
Remain unchanged
• 27% indicate that procurement and purchasing involvement will “Moderately Increase” in 2010. • 19% indicate that procurement and purchasing involvement will “Slightly Increase” in 2010. With regard to planning and implementing incentive travel programs, do you anticipate the involvement of procurement and purchasing in 2010 to… (n=103)
19
Slightly increase
27
Moderatelyy increase
12
Significantly increase
0
20
40
Anticipated Changes In 2010 Incentive Travel Program Budgets 12
The majority (33%) of respondents anticipate ti i t b budgets d t ffor IIncentive ti Travel Programs in 2010 to “Slightly Decrease”.
9
Significantly decrease
12
Moderately decrease
33
Slightly decrease
• 30% indicate that budgets for Incentive Travel Programs in 2010 to “Remain Remain Unchanged” Unchanged . • Only a combined 16% indicate that that budgets for Incentive Travel Programs in 2010 to increase.
30
Remain unchanged
11
Slightly increase
5
Moderatelyy increase
0
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=103)
0
20
40
Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs 13
In November 2009, more respondents anticipate the economic downturn to continue to have a negative rather than positive effect on their ability to plan l and d iimplement l t merchandise non-cash incentive programs.
100
In your opinion in 2010, 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 2010 be…(n=103)
5 16
37
7 8 19
15 23
60
20
5 9 10
80
40
• Negative impact 34% in November vs. 24% in July 2009. • No impact 23% in November vs. 20% in July 2009 2009. • Positive impact 26% in November vs. 20%in July 2009.
8 4
17
25
19
7 4 4
33
11
33
16 8 2 20
0
Moderately negative Sli h l negative Slightly i
20
8 1
Significantly negative
6
No impact Slightly positive Moderately positive Significantly positive p Not involved
Oct-08 Mar-09 Jul-09 Nov-09
Note: 2008 vs. 2009 percentages not comparable because “not involved” response category added in 2009 survey.
Anticipated Changes In 2010 With Regards To Merchandise Non-cash Incentive Programs Award Selections 14
A majority (30%) of respondents anticipate i i d decreased d merchandise h di award value with regards to 2010 Merchandise Non-Cash Incentive programs. • 27% indicate that Included individual travel will be offered as an option in 2010. • 22% indicate that the use of debit/gift cards will be increased in 2010.
Decreased merchandise award value
30
Included individual travel as an option
27
Increased use of debit/gift cards
22 18
Added merchandise Included experience-related experience related (SPA, event tickets, etc.)…
16 15
Added debit/gift cards Decreased use of debit/gift g cards
7
Increased merchandise award value With regard to merchandise non-cash non cash incentive programs, what changes, if any, will be made in 2010 with award selections? Check all that apply. (n=82)
5
0
20
40
Anticipated Changes With The Involvement Of Procurement And Purchasing In 2010 Merchandise Non-Cash Incentive Programs 15
While the majority j y ((48%)) of respondents anticipate No Change with regards to involvement of procurement and purchasing for Merchandise Non-Cash Incentive Programs in 2010, most all agree that their involvement will increase by some degree in 2010.
Significantly decrease
2
Moderately decrease
1 5
Slightly decrease
48
Remain unchanged
• 17% indicate that procurement and purchasing involvement will “Moderately Increase” in 2010. • 12% indicate that procurement and purchasing involvement will “Slightly Slightly Increase Increase” in 2010. • Only 8% indicate the procurement and purchasing involvement will increase by some degree in 2010. With regard to planning and implementing merchandise nonnon cash incentive programs, do you anticipate the involvement of procurement and purchasing in 2010 to…(n=82)
15
Slightly increase
17
Moderatelyy increase
12
Significantly increase
0
20
40
60
Anticipated Changes In 2010 Merchandise Non-Cash Incentive Program Budgets 16
The majority (34%) of respondents anticipate ti i t budgets b d t for f Merchandise M h di Non-Cash Incentive Programs in 2010 to “Remain Unchanged”. • 21% indicate that budgets for Merchandise Non-Cash Incentive Programs in 2010 to “Slightly Decrease”. Decrease • Of note, a combined 32% indicate that budgets for Merchandise NonCash Incentive Programs in 2010 to increase. increase
9
Significantly decrease
5
Moderately decrease
21
Slightly decrease
34
Remain unchanged
20
Slightly increase
12
Moderatelyy increase
0
Significantly increase In 2010, do you anticipate budgets for merchandise non noncash incentive programs in general to…(n=82)
0
20
40
Generall Issues G I Of Interest to the Industry 17
Budget Changes for 2010 Incentive Program Elements
Anticipated Changes Incentive Program Elements 18
In general, respondents indicated th t they that th anticipate ti i t mostt incentive i ti program elements to either decrease or remain the same in 2010.
Incentive Company involvement 11% 24% Awards budget 11%
62%
Number of total qualifiers 10%
• Only the following elements received ratings of Increase of greater than 10% for 2010: • Number of total qualifiers (10%) • Awards budget (11%) • Incentive Company involvement (11%)
Incentive program non-meal 9% components
45%
9% 18%10%
59%
Incentive program on-site gifts 4%
27% 4% 34%
78%
13% 11%8%
Incentive Company management 3% fees
51%
37%
10%
Communications budget 3%
52%
36%
10%
Per diem cash allowances 2%
43%
Administration budget 2%
46%
0% In 2010, do you anticipate the following incentive program elements will increase, decrease or remain the same? (n=103)
56%
Increase
Decrease
20%
43%
13%
44% 40%
Remain Same
60%
80%
9% 100%
Don't Know
