Less than a third of the respondents to our annual incentive trends survey say that 2006 budgets for group travel incentives will increase over 2005. That leaves the majority of respondents looking at decreased (18 percent) or stagnant (47 percent) budgets in a time of generally increasing costs for the resorts, restaurants, airline tickets, gifts, and special touches that make incentive travel a motivating experience. (Another 5 percent of respondents didn't know which way their 2006 incentive budget was headed as of our mid-November survey.)

While we're not happy to see corporate belt-tightening added to all the other challenges of orchestrating a successful incentive program, we are pleased to know that this survey can be of service. When the going gets tough, it's time to benchmark — and our survey results provide solid numbers against which you can measure your programs. How much are other companies spending on their incentive qualifiers, and how are they spending it? Where are they taking their groups, and how many people are invited? How much is spent on air versus hotel versus F&B, and who is managing the logistics? When budgets drop, what gets cut first?

Read on for answers to these questions and more. One hundred percent of our respondents work in a corporation and have responsibilities for incentives. Not third-party incentive planners; not those dedicated to meetings and conventions. We zero in on the spending, site selection, and programming issues that are unique to the incentive scene.

TO UNDERSTAND CURRENT destination trends, we asked respondents where they had taken their last major group incentive program and, if they knew, where the next two were booked. While respondents are sending adventurous qualifiers to all corners of the world, including Argentina, Japan, Peru, Thailand, Turkey, Colombia, and China, the preponderance of programs are headed to the incentive hubs — places where the resorts and weather are a good bet, and the infrastructure is in place to service high-need groups. Of the incentive groups staying in the United States, 42 percent reported Florida or Nevada as their destination. Hawaii, which took second place after Florida last year, was bumped to fourth place. Kudos to Colorado, which earned a spot among the top-five domestic incentive destinations.

The most popular destinations for incentive groups headed outside the United States are the Caribbean and Mexico, which mirrors last year's survey results. Mexico's Cabo San Lucas area got more specific mentions than any other international destination, with Puerto Rico a close second.

ON AVERAGE, 257 people qualified for respondents' last major group travel incentive, and spending for each of those qualifiers (including his or her guests) averaged $3,136. Companies spending less than $3,000 per qualifier tended to host bigger groups (an average of 325), while companies spending more than $3,000 per qualifier averaged just 215 qualifiers.

When budgets contract, respondents are most likely to cut on-site expenses or choose a less expensive destination or hotel. Interestingly, this indicates a slight shift in thinking from that of the respondents to our 2004 survey. In 2004, cutting on-site expenses was (like this year) the top budget-cutting strategy, but picking a less expensive destination was not a close second choice — only 45 percent thought they were “very likely” or “somewhat likely” to do that if incentive budgets got tight.

COMPARED TO THE RESULTS of our 2004 study, this year's respondents have longer qualifying periods in place. Asked about the qualifying time for their last major group travel incentive, 27 percent reported six months or less in our 2004 survey. In 2005, only 17 percent said six months or less. The majority of respondents uses a 12-month qualifying period: 74 percent said so this year, versus 69 percent last year.

INCENTIVE PROGRAMS are most commonly put in place to encourage and reward the company sales force, but they're not the only ones. Forty-eight percent of respondents reported having a program for nonsales employees.

Our survey showed that companies change the rewards they offer depending on the audience, with nonsales employees most likely to be given cash and least likely to be given a group travel experience. Salespeople and distributors are most likely to be offered a group travel reward.

Cash came in a not-too-close second when respondents were asked how they rewarded their salespeople, but, interestingly, in a separate question we asked respondents what reward they thought best motivates salespeople to produce a significant sales increase, and the majority said, “cash.”

Methodology

IN EARLY NOVEMBER 2005, PBI Media Market Research (a unit of CMI's parent company PBI Media) sent e-mail invitations to participate in an online survey to a selection of CMI's corporate subscribers who have responsibilities for incentive programs. Third-party incentive companies were not included. A follow-up e-mail was sent a week later. The results were based on 119 usable responses, a 2.2 percent response rate.