The annual Corporate Meetings & Incentives/Incentive Research Foundation survey, conducted in November 2011, found that while markets fluctuated dramatically in 2011, sales remained stable for 40 percent of respondents, a significant increase from the 26 percent with flat sales in 2010. Only 19 percent of respondents saw sales decline in 2011, compared with 25 percent in 2010. But—proof of the stagnant economy—where 48 percent of companies reported an increase in sales in 2010, only 41 percent reported an increase in 2011.

Although buoyant sales figures did not materialize for most in 2011, year-over-year sales consistency will allow many incentive travel budgets to remain stable or increase in 2012. Twenty-four percent of respondents say their 2012 budgets will increase at least slightly, marginally higher than those that reported an increase in 2011 (22 percent). Stable sales saw fewer programs being canceled in 2011 than in the past few years. In fact, cancellations are way down from ’09 levels: In 2009, 37 percent of respondents reported canceling group incentive travel programs that year; this decreased to 18 percent in 2010 and now is down to 13 percent in 2011.

Effects of a Struggling Economy

As expected, however, not all budgets remained unscathed. Twenty-one percent of respondents said their 2011 budgets declined, and 18 percent expect that their 2012 budgets will decline. Incentive travel planners were strongly unified in their response to what drove program changes and reductions in 2011: 91 percent of respondents with reduced budgets said the economy was to blame.

The economic struggle has translated into flat group size and reduced per-person spending. Median group size for respondents held steady at 125 participants and per-person spending for incentive group travel fell for the third straight year to an average of $2,603.

Although higher than anticipated, individual incentive trips remain a comparatively less-expensive choice, with the average per-person expenditure on individual incentive trips now at $2,105. A significant 40 percent of respondents reported using individual travel incentives.

Incentive Trips Are Shorter, Closer to Home

The most common response to budget constraints in 2011 was to reduce the number of on-site gifts (41 percent), with 32 percent of respondents also relocating to properties within a shorter distance, reducing the number of qualifiers, or reducing the length of their trips. Companies expect to take similar steps in 2012, cutting back on pillow gifts, shortening trip lengths, booking off-season, and moving from international to North American/Caribbean destinations.

Planners were also highly unified regarding the effects of these constraints: A full 76 percent noted that “staying within budget” was their primary challenge, while 39 percent said destination selection was the key issue and 25 percent were most concerned about negotiating with suppliers.

As one might expect in this environment, there is a growing expectation by management that incentive trips include additional time and opportunities for business content. The average incentive travel program participant now spends more than a quarter of his or her event experience in business meetings. More than a quarter of planners now run programs where greater than 40 percent of the event is dedicated to business meetings. Government tax implications and cost pressures will no doubt continue to fuel this trend.

However, virtual content doesn’t appear to have a place in incentive trips: Only 12 percent of respondents are augmenting their incentive meetings with virtual technologies. Interestingly, the economic crunch also has not translated into increased pressure to demonstrate program ROI: Only 20 percent of respondents said they were required to provide any type of program ROI for their trips.

It’s likely that the economy is also having a negative impact on corporate social responsibility activities and sustainability efforts. The number of incentive planners including CSR activities in their trips declined almost 10 percent in the past year, with only 31 percent of respondents saying they included CSR as part of their itineraries.

Social Media and Apps Take Off

Planners cited a number of new program ideas, despite all these constraints. One-third of respondents are using social media to promote their incentive programs to attendees, while 21 percent plan to add social media in the next year. More than one in 10 incentive planners are now using a mobile application to display program progress or to enhance attendees’ experiences while on site.

An additional 36 percent of planners will add one or more of these mobile features within the next year. Likewise, one in five is either currently taking advantage of game mechanics on their incentive Web sites, or will do so within the next year.

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