For incentive trips, Europe is a big draw — at a big price. But with forward contracts, careful site selection, and rooms at sea, savvy meeting planners can still offer qualifiers “the Continent,” even as the euro climbs to a record high.

Financial and insurance conference planners consistently look overseas to motivate top producers. Eighty-four percent of the FICP members who responded to a recent FIM survey have held international incentive trips, and an additional 5 percent are going overseas for the first time in 2008.

In past years, that may have meant a trip to London, Paris, or another European capital. But while Europe remains highly desirable, it has also become highly expensive. According to our sister magazine Corporate Meetings & Incentives' 2008 Incentive Trends Survey, while nearly 80 percent of respondents take groups outside the United States annually or biannually, Europe has become a less likely destination because of the devalued dollar. So, if you want to satisfy the persistent lust for European travel, you are going to have to figure out a way to overcome the expense.

Europe at a Cost

In May 2002, the dollar traded at 90 cents against the euro. As of this writing in February 2008, the dollar was trading at close to $1.50 — about 65 percent more. Similarly, in early 2002, the dollar traded as high as $1.41 against the British pound; by January of 2008 it had fallen to $1.98 against the pound — a decrease of more than 40 percent.

“This is terrible for groups that are going outbound,” says Bill Boyd, CMP, CMM, CITE, president and CEO of Sunbelt Motivation & Travel Inc., Irving, Texas. “Planners with incentive trips tied into a fixed budget can no longer afford any currency associated with the euro.”

One planner facing the euro challenge is Todd Zint, CMM, CMP, vice president, marketing communications, NFP Insurance Services in Austin, Texas. Zint plans his company's annual Partners Financial Convention, which in 2007 took place with 425 attendees in Ireland and London. “I thought about Salzburg and Vienna for 2009, but with an exchange rate of $1.50 [against the euro], I had second thoughts,” says Zint. “We're going to Buenos Aires instead.”

Koleen Roach, director, recognition and conference planning, Securian Financial Group, St. Paul, Minn., goes international bi-annually with Securian's Leaders Conference and Chairman's Club incentive programs. In 2007 she took 365 attendees to Ireland and Malta and counts herself fortunate that she paid for most of the trip's deposit “before the euro went through the roof.”

Planners use many strategies to deal with the escalating cost of European travel. Roach says that it's possible to find hospitality partners in certain countries who will negotiate in U.S. dollars — she has been able to do this in Greece and in some Italian cities, for example. She also points out that some European countries have yet to tie their currencies to the euro. This worked to her advantage last year in Malta where the Maltese lira traded at a favorable rate with the U.S. dollar. (On January 1 of this year Malta introduced the euro.)

Currency Strategies

When you must deal in euros, currency fluctuation is an important consideration. “I would always recommend that you negotiate a locked-in rate with your vendors at the time you are signing the contract,” advises Lisa Ramsay, a meeting planner with the Life and Annuity Division of Protective Life Insurance Co. of Birmingham, Ala. “Or purchase futures when you contract so you can be guaranteed that your program cost doesn't increase due to the fluctuation of foreign currency.” (With a futures contract the buyer agrees to purchase a specific amount of a currency at a fixed price in U.S. dollars on a certain date in the future. When that day arrives, the buyer pays the specified rate, no matter how the currency may have fluctuated.)

Another way to control costs and still offer a European incentive: Try a cruise. Zint booked a Mediterranean cruise, which he negotiated in U.S. dollars with the cruise line, for this year's Partners Financial Convention. The itinerary includes Athens, Crete, Alexandria/Cairo, Valletta in Malta, and Sorrento and Civitavecchia/Rome in Italy. “If you visited these cities via land you'd be paying $500 or $600 a night for hotel rooms alone,” says Zint.