Are incentive qualifiers getting used to fewer frills? As their companies shy away from five-star hotels and do away with amenities that used to be standard fare, are attendees even noticing? Or are companies managing to keep the quality of their trips high despite sometimes significant budget cuts?

Those were among the questions we asked when we co-developed this year’s incentive trends survey with the Incentive Research Foundation. The resulting data goes a long way toward answering them.

First, the Numbers

This year’s survey found a slight improvement in incentive budgets from last year. In 2009, 63 percent of respondents said, their budgets were “slightly to significantly less” than in 2008, while in 2010, that number dropped to 46 percent. As in 2009, one-third of the 2010 respondents said budgets had remained consistent. The good news is that fewer respondents—16 percent in 2010 versus 20 percent in 2009—said their incentive budgets were “significantly less” than in the previous year.

Looking ahead, budgets are expected to improve slightly in 2011. Only 22 percent of respondents expect budgets this year to be lower than in 2010; 10 percent expect them to be “significantly lower.” However, that still adds up to a third of all respondents.

Twenty-three percent of respondents expect their budgets to be slightly better in 2011 than in 2010. That’s more than twice as many as the 10 percent who last year predicted that 2010 budgets would be slightly better than in 2009.

Despite some better budget numbers, plenty of programs were canceled altogether in 2010, and it looks as if that practice will continue in 2011. Almost one in five respondents said their companies already have canceled a 2011 travel incentive (the same as last year) and 9 percent reported canceling a 2011 merchandise incentive (up from 4 percent last year). This raises questions about whether companies will ever reinstate some of the incentives they have canceled for two or more years now.

The underlying reason for budget cuts and cancellations in 2010 was undeniably the economy (according to 90 percent of respondents). Only 27 percent attributed the cuts to media or public perception, or the “AIG effect.” A third of respondents also reported pressure from top executives in the company to “alter their incentives.”

Lower Budgets, Same Expectations

Moving forward, the challenge for planners continues to be keeping costs down while making their incentive trips special for attendees. The survey clearly shows that the cutbacks they made in 2010 were intended not to harm program quality. The most popular ones illustrate this: cutting room gifts, having fewer managers attend, and cutting the number of qualifiers (which allowed them to keep the per-person budget up). Those were again among the top changes predicted for 2011 by companies who are working with lower budgets.

Some of the other potential cutbacks in 2011 could have far-reaching implications for both destinations and hotel categories. More than a third of respondents (38 percent) said they plan not to use five-star properties (up from 23 percent last year), and 21 percent will avoid resorts or resort destinations (up from 11 percent last year). The news is good for all-inclusives, which offer higher perceived value: 31 percent of respondents said they plan to use these properties in 2011 (even though many are resorts).

For planners, the challenges expected in 2011 are many: staying within budget (53 percent of respondents), generating excitement about their downplayed trips (26 percent), and choosing a destination that meets their criteria despite their budget (20 percent).

The underlying issue is how all of these changes are being perceived by attendees. When asked what feedback they had received from attendees regarding program cuts, 48 percent of respondents said attendees “were grateful just to be having a trip”; 39 percent said feedback was “as positive as in past years”; and a quarter said attendees “are getting used to a lower level of service and amenities.”

Just under 10 percent said attendees were dissatisfied with the destination, service, or property, which is about the same as last year (other than an increase in dissatisfaction with the property from 3 percent last year to 8 percent this year). Sixteen percent said winners were unhappy with program inclusions. This indicates that while planners are changing the way they do things, the majority of attendees are not aware of—or unhappy with—those changes.

A Decade of Change: 2001 to 2011

We took a look at our survey from 10 years ago to compare the state of today’s trips to a decade ago. Here’s what we found:

-In 2001, 43 percent of respondents said their incentive travel budgets had remained stable in 2000, while 33 percent of respondents to our 2011 survey responded in a similar way. In 2001, 39 percent of companies expected budgets to increase in the following year, while only 20 percent of this year’s respondents expect their budgets to rise.

-Average per-person spending on incentive trips in 2000 was $3,256; in 2010 it was down to $2,617. Factor in an annual inflation rate ranging from 3.85 in 2009 to 1.59 in 2002, and you see how much less planners have to spend today.

-The average incentive trip in 2000 lasted 4.89 days, with three-quarters of respondents holding trips of four days or more. Though we did not track the average length of trips in 2010, “shortening the length of the trip” was the number-two tactic (after cutting room gifts) used by 45 percent of respondents.

-Though 76 percent of incentive trips in 2000 included some meeting or training component, including CSR-oriented activities was unheard of back then. In this year’s survey, 35 percent of respondents included a charitable activity during their trips.

-Of 2001 survey respondents, 59 percent held international programs, while in this year’s survey, 31 percent cited moving an international location to a domestic one as a cost-cutting measure.

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