You could lop a day off your incentive travel program to save some money. Or you could reach out to your supplier partners, share your priorities, and see what they can offer to add value to your program.
The newly released 2015 SITE Index report shows that a healthy 46 percent of incentive travel buyers are increasing their budgets, but there’s still a lot of cost consciousness out there, with 34 percent of buyers saving money by planning shorter programs.
Society for Incentive Travel Excellence CEO Kevin Hinton presented the results of the SITE Index—the organization’s annual analysis and forecast for the incentive travel industry—during a webinar. New partner J.D. Power was represented on the call by Rick Garlick, global practice lead for J.D. Power Travel & Hospitality Group. The partnership is part of an overall improvement in the index, which also included broadening the base of respondents (up from 125 in 2014 to 420 in 2015) and reworking survey questions to be more relevant for each of the two main respondent groups, the buyers and sellers of incentive travel services.
Enhancements, Not Cuts
Asked about how they are actively trying to manage costs, buyers ranked the following choices:
1. Planning shorter programs: 34 percent
2. Fewer inclusions: 29 percent
3. Less-expensive destinations: 29 percent
4. Less-expensive amenities: 27 percent
5. Less-expensive hotels: 21 percent
But on the seller side, the majority of respondents said budget management is more about creative and innovative program design that increases value. “Most companies would like to be able to do the same or better program with same or only slightly increased or slightly decreased budget,” Hinton said on the webinar. The only way this can work, he said, is through partnerships between incentive travel buyers and suppliers. “There are pressures. But I am excited to see, on the seller’s side, that there’s so much investment in innovation and creativity in event design.”
With design as the focus, he said, “it’s not a cost conversation, it’s a conversation about value and enhancement.” For example, focusing on the experience buyers are providing their guests is a primary way to enhance the overall value of a program. One seller respondent emphasized “more authentic, people-related experiences… going beyond the ordinary to introduce visitors to local experiences, places, and activities.”
Indeed, authenticity and local flavor are huge. Hinton gave the example of a recent SITE Global leadership visit to Slovenia, an up-and-coming incentive destination. “We were impressed with the people most of all,” he said. “We talk about the power of face-to-face in the event industry, and that really is what stands out most. What sticks with you [after a travel experience] is the people that you met.”
Ask and You Might Get
One-third of seller respondents said they are also trying to help buyers manage their budgets by “including more for the same price.” Among the possible add-ons they included in a write-in section of the survey:
• room drops
• comp rooms
• early check-in
• welcome drink
• include minibar allowance for rooms
• include coffee in meeting room
• welcome reception
• more flexible policies
Hinton keyed in on that last one. “For buyers, know what is critically important, because there is flexibility,” he said. “Home in on the few things that are really important to you, tell your partners, and they will make it happen. They can increase value, but you need to direct them.”
More than one-quarter of seller respondents also said they use loyalty incentives to help buyer budgets. For example: offering additional concessions if a planner books multiple programs with the same chain or property, offering double points, giving concessions for multiyear bookings, offering incentives for early bookings, and allowing an upgraded package if the planner commits to booking the following year as well.
Multi-year bookings can have another benefit, as a hedge against the current challenge of finding space. “The lack of availability and last-minute requests make things harder for both buyers and sellers,” Hinton noted. “This will not dissipate in 2016.” Meeting owners, therefore, must start looking further into the future and making program decisions earlier.
Learn more about SITE here.