C-Level Decisions

The fact that C-level executives are making the destination decisions in nearly half the companies that responded to our survey is telling.

“CFOs are taking more of a microscope to programs, asking, ‘Do they really have to stay at the Ritz-Carlton?’” Dawson says, adding that he thinks it's partly the industry's fault. Even after decades of pounding away at proving ROI, he says, the value of incentive programs as a sales generator still has not sunk in.

However, the value might soon be difficult to ignore. Brian Martenis, sales incentives manager for Bayard Sales Corp., Philadelphia, says that his higher-ups chose not to do a European program last year — and it definitely has affected sales. He knows of several customers who have taken their business elsewhere because of his company's decision.

“Just last week, a customer called and told me where she was taking her business. She was very vocal about why she did business with us and what she expected us to do in return.”

How Does Your Incentive Compare?

This year's incentive benchmarks continued to trend toward shorter programs with less lead time for planning, and five-day, four-night programs, which has been the average program length for several years. More and more companies are also including meetings in their programs, as trips shift from the “pure incentives” of years ago to a mix of business sessions and pleasure. The average number of qualifiers also remained fairly steady at 100, with average group size of 160 including guests and staff.

Creative Site Decisions

While almost half of our survey respondents take their incentives outside the United States every year, and nearly 80 percent leave the U.S. at least once every couple of years, Europe just isn't a likely destination for incentive groups because of the devalued dollar.

“The situation with the dollar is a disaster for our industry,” says Vitagliano. “Instead, groups that used to use Europe are considering Montréal, where at least the dollar is equal, or New Orleans, which has an international flavor.”

The one bright spot in Europe for respondents is Spain. Always known for delivering value, it was the only European destination to make this year's list of international destinations. “There are some good values in Spain,” confirms Bayard's Martenis, noting that his participants tend to trust that if he is taking them off the beaten path, say to Marbella in the south of Spain, it will still be a five-star program.

Instead of Europe, Mexico and destinations in the Caribbean ranked among the top choices for our readers. Martenis says he has been able to negotiate some great deals at five-star properties in Mexico, especially when he's willing to jump in at the start of construction at a new resort.

BCD Meetings & Incentives' Carroll has seen more clients considering second-tier cities as well. For example, instead of using Miami, they're choosing Tampa; in Mexico, instead of Cancun, they're choosing Puerto Vallarta, which is a better value.

“This allows them to keep the on-site activities and amenities at the same level people are used to,” she says, adding that some clients are even adding tiers to their programs, sending some winners to a second-tier destination and others to a first-tier one.

Both Carroll and Dawson have noticed more openness to off-season destinations, such as Bermuda in April or Hawaii in the rainy season, hoping that the trophy value of the destination, along with golf, spas, and five-star properties, can overcome any weather-related concerns.

As Dawson puts it, “People are saying, ‘We're going to take a chance and hope it doesn't rain every day.’”

Methodology

Corporate Meetings & Incentives' Annual Incentive Trends Survey, completed in November 2007, is based on the responses of 118 subscribers who have decision-making responsibilities for their companies' incentive programs. The respondents hold a combination of C-level, sales and marketing management, and meeting/incentive management titles. Almost half of the respondents (48 percent) work in companies with 1,000 or more employees.