The Incentive Research Foundation conducted its Spring 2012 Pulse Survey in March, which compares today’s buying trends to those of the past two years. Researchers polled incentive industry professionals on the economy, budgets, program elements, and trends, and found that respondents generally had a positive outlook and were getting some relief from the cutbacks implemented in response to the economic downturn and media pressure from the “AIG Effect.”
- Economic recovery is being felt in program planning and implementation.
In October 2011, 62 percent of respondents said the economy would have a negative impact on their ability to plan and implement incentive travel programs. That number had fallen dramatically to 22.7 percent by March of this year. For merchandise/noncash programs, the percentage that say the economy is having a positive impact more than doubled since October, from 25 percent to 53 percent. Moving forward, 73 percent of respondents say their general perception of the economy in the coming year is positive.
- Budgets have stabilized.
When asked about the impact of current economic conditions on incentive program budgets, 15 percent of respondents said their budgets have increased and nearly half said no changes have been made, while 23 percent said budgets were reduced. Concerning the rest of 2012, most respondents say incentive travel budgets will stay the same (49 percent) or increase slightly (36 percent). For merchandise/noncash programs, respondents are just slightly more upbeat, with 41 percent expecting budgets to stay the same and 44 percent expecting them to increase.
- Procurement “gatekeepers” are the new normal.
In recent years, many companies have implemented policies in which all incentive program costs have to be reviewed and approved by the procurement department. When asked whether procurement’s involvement in incentive programs will increase, decrease, or stay the same in the coming year, 42 percent of respondents said involvement will remain unchanged, while 53 percent say it will increase to some degree.
- The trend to move from international to domestic destinations has slowed dramatically.
From a high of 42 percent in May 2010, the trend toward switching from international destinations to domestic destinations in order to cut incentive travel costs has become less pronounced. In March of this year, only 23 percent of respondents said they were planning such a change, which looks to be more in line with numbers from October 2010 (28 percent) and June 2011 (26 percent), indicating a leveling-off.
- Changes in the number of rooms and/or days booked for incentive travel programs have also leveled off.
After some wild fluctuations in 2010 and early 2011, 30 percent to 40 percent of respondents seem to agree that further reductions in the number of days and the number of rooms won’t be made, but that shorter trips are the norm as planners attempt to keep program costs under control.
- Dueling trends in air transportation costs will continue.
Until recently, incentive travel programs typically included all air transportation–related costs (e.g., transfers, ground transportation, driving, parking, seating upgrades, and frequent-flyer club memberships). But in the past two years many companies have decided to provide only airline tickets and to have recipients absorb any related costs. Although both policies remain popular, the tickets-only trend has become more prevalent in the past year, hovering between 53 percent and 55 percent.
When asked what tools/techniques they use in conjunction with incentive programs, 74 percent of respondents said they incorporate social media and 33 percent use gaming techniques. In addition, 57 percent said they regularly add a corporate social responsibility component to their incentive programs in order to give something back to the communities in which they are meeting. , , and gaming techniques are increasingly being used in incentive programs to inform and engage participants.
View the full spring 2012 survey.