A recurring theme in our annual incentive trends survey, conducted just eight weeks after September 11, can be summed up by the most common two-word response: don't know. Readers don't know if they face budget cuts, don't know if they will replace some travel awards with cash or merchandise, and certainly don't know if they will be forced to cancel their 2003 incentive plans.

“For a while after the attacks, it was as if someone had pushed the pause button — no one wanted to travel,” reports Kathy Miller, a freelance meeting producer based in New York. “Things are a little different now — I'm getting more calls, more movement, on travel incentives again.”

She remains optimistic about the future of travel incentives. “People love to travel, and they expect it as a reward for high achievement. It's like telling people they've done a good job and patting them on the back — you can't replace that as an incentive, and in a similar way, you can't replace travel as an incentive.”

But that's just what's happening at some companies. Colin J. Higgins, president of Performance Enhancement Associates, Waltham, Mass., has seen several clients cancel or postpone their trips: A program scheduled for Las Vegas in October 2001 was canceled completely and cash offered instead; another, scheduled for Puerto Rico this month, was canceled and cash offered instead; and a third, to Bermuda in August 2002, was canceled and cash or no-fly regional trips offered.

Has Travel Lost Its Appeal?

“Many clients are not sure of the appeal of travel now, and they foresee difficulty in implementation,” Higgins says. “Some clients are considering regional trips and switching to domestic destinations. We're researching and considering new domestic destinations that we wouldn't have thought possible before September 11.”

Jim Feldman, who heads Chicago-based incentive house Incentive Travelers Cheque, has had experiences similar to Higgins'. “The crux of the problem post-September 11 is threefold. First, the airlines have become far less user-friendly. Second, the travel experience, which I always thought of as an adventure, now is more a “Survivor”-like experience,” he jokes. “And that leads to the third thing, which is that the travel experience that incentive winners risk encountering is akin to having root-canal work.”

Despite his gloomy outlook, he believes that travel incentives far outshine cash, gift certificates, and merchandise in terms of how qualifiers perceive their worth.

“The advantage that a travel incentive always had is that it didn't have an assessable value. With merchandise, cash, and gift certificates, you know or can easily find out just what they're worth. With travel awards, all the recipient thinks about is that it's pretty cool that their boss thought enough about their efforts and performance to send them to Hawaii for five days. They don't even consider the value.”

There is great uncertainty among our respondents about whether they will replace incentive travel programs with other types of awards: 44 percent said they would not, nearly 13 percent said they would, and a significant number — 42.3 percent — said they weren't sure. The majority (51.4 percent) said they will continue their 2002 programs, which were already in progress when this survey was done, without any changes. More than a quarter (26.1 percent) said they will or may change some of their programs, and again, a significant number (18.2 percent) just didn't know. More than a third of respondents (34.4 percent) said they were undecided about whether they would continue their incentive programs in 2003.

It Just Depends

Many decisions to cut back or discontinue travel awards were made long before September 11. “One of my clients — a large, well-known computer company — hasn't done an incentive-travel program with us in two years,” reports Feldman. In fact, 24.9 percent of our survey respondents said their 2002 budgets would be smaller than last year, and almost a quarter of respondents said they weren't sure — which could mean that nearly half of all companies will cut their incentive-travel budgets in the coming year.

Of course, it depends on the industry. Insurance, for example, has long viewed travel as the premier award for its top achievers. “We're firm believers in travel incentives, and we're continuing as we have been,” says Bob Hayes, director of conference planning for MetLife, New York. “There are networking and teambuilding benefits to group travel awards that just don't exist with individual awards. We do about two dozen domestic incentive-travel programs, and our main program for the very top achievers is a five-day overseas trip.”

Arnie Pechler, vice president of marketing and sales for Farmers and Traders Life Insurance, Syracuse, N.Y., reports that his company's budget for incentive travel will be the same or slightly larger for 2002 and 2003. One reason is that the company, in addition to its major annual leaders conference for top achievers, has adopted what Pechler calls a “driveaway/getaway” trip — two nights at a resort easily reached by car or bus — as a lower-tier award.

“Shortly after September 11, we did have some comments from qualifiers that they weren't all that excited about air travel anymore, but that has moderated over the past month or so,” he says. “We will definitely be continuing our leaders conference at various destination resorts — the driveaway/getaway awards are in addition to, not in lieu of, our group trip. But one of the reasons we layered it into our incentive program is that, should something happen again that makes air travel unattractive, we can expand the driveaway/getaway award to five days. That's not likely, but we're in wait-and-see mode.”

Whatever does happen, incentive travel planners need to be more plugged in to constituents' needs and concerns. “Safety and security have always been an issue, but now companies really want to know what the disaster plan is. It's become top priority,” says Louise Hall Reider, CITE, an independent planner based in Bellevue, Wash. “What has happened has taken us to the next level in a way. We have to know our company's or client's culture — and we have to determine what individual employees want — or don't want.”

This SURVEY

On October 24, the business and marketing research team of PRIMEDIA, Corporate Meetings & Incentives' parent company, e-mailed invitations to 6,000 domestic CMI subscribers to take part in this incentive travel study. A follow-up e-mail was sent October 29. A total of 357 responses to these e-mailed invitations was received; 18 of those responses were incomplete. The results of the study are based on the 339 completed surveys — a 6.7 percent response rate.