The economic slowdown had only made a slight dent in companies' incentive programs when we surveyed 366 readers in October and November 2001. In fact, many had kept budgets and spending at 2000 levels: 59 percent held the same number of incentive trips in 2001 as the year before (compared to 55 percent last year), and 39 percent said their incentive budgets were the same in 2001 as 2000 (compared to 43 percent in our last survey).

The two places where the faltering economy was in evidence were per-person budgets: $2,250 per person in 2001, compared to $3,256 in 2000; and length of trips: four days in 2001, compared to 4.89 in 2000.

Warm weather destinations predominated the list of readers' favorites: Florida, California, Nevada, Arizona, and Hawaii. Although the number is certain to change in 2002, a full 54 percent of readers held their incentive programs outside the United States in 2001. Cancun was by far the most popular destination, followed by the rest of Mexico, the Bahamas, London, Rome, and Vancouver, British Columbia.

Cruises continue to grow in popularity: 34 percent of readers have used them for incentives, and an astounding 72 percent plan to.

Another statistic that is certain to change is the number of companies that prefer travel awards over cash and merchandise (52 percent in 2001, just as in 2000). The majority of readers (45 percent) said that travel is the most effective award to motivate employees, although 21 percent cited cash as being most effective. Tiered awards, combining travel, merchandise, and cash, are used by 40 percent of readers.

At 70 percent, salespeople are still the primary targets of most companies' incentive programs. The number of readers using incentives for nonsales employees (43 percent) has fallen to 1997 levels; just the year before, more than half of companies (51 percent) said they used incentives for nonsales employees. Even more significant, 32 percent of respondents in 2000 said they had plans to create programs for nonsales employees in the future; that number had fallen to just 10 percent in 2001.

Also declining was the use of team incentives in 2001: 36 percent of companies used them, compared to 42 percent the year before. A significant number of readers (53 percent) said they have no plans to use them in the future.

Just a couple of years ago, individual incentives were predicted to change the face of the incentive industry. Apparently, they are considered a luxury in tough economic times. They were used by only 35 percent of readers in 2001, and 47 percent said they have no plans to use them. In 2000, 53 percent of readers had awarded individual incentive trips.

Most of our readers plan their own incentive trips with the help of an in-house planner (45 percent), while 19 percent rely on a travel agent and 15 percent use incentive firms.

READER PROFILE

AVERAGE number of trips he/she plans per year 4
AVERAGE length per trip 4 days
AVERAGE cost per person $2,250
MOST common type of incentive sales
AVERAGE time spent planning trip 10 months
MOST popular domestic destination Florida
PERCENTAGE holding meetings during incentive trips 83.8
PERCENTAGE using incentive firms 15.4
PERCENTAGE that plan to use cruises in the future 72.1
PERCENTAGE using destinations outside the U.S. 54.2
PERCENTAGE using tiered incentives (travel, merchandise, and cash) 40.3