Although some of its employees had attended the incentive trips of supplier companies, Tire Group International (TGI) had never sponsored a trip of its own. But when Tony Gonzalez, CEO of the international tire distributor and wholesaler based in Miami, met Jeffrey Hockersmith, executive vice president of the incentive house Journee Unlimited, he decided to give it a try.
"He wanted to increase dealer sales globally, increase dealer loyalty, and motivate and reward internal salespeople--and he wanted to do it immediately," says Hockersmith, whose firm has offices in Hartford, CT and Fort Lauderdale.
Many of the independent tire dealers who work with TGI are based in Central and South America, giving Gonzalez another objective: to bring them to Miami to see the warehouse and meet the people who, up to that point, had been little more than voices on phones.
Another requirement: The program had to make a big impact in a short time period. Gonzalez believed that the dealers, largely "mom and pop" organizations, would not be able to take off an entire week for an incentive trip.
"A cruise was a natural for this group," Hockersmith says. "Miami is the cruise capital, so the dealers could spend some time in the city before boarding the ship, and we could choose a cruise of any duration leaving from there."
Gonzalez, who had cruised several times himself, also liked the fact that cruises are all-inclusive. "For a first-timer, it is a really big advantage to know up front exactly how much everything will cost," says Hockersmith.
There was one surprise, however. The company had expected about 40 of the 800 potential qualifiers to win spots on the ship for themselves and a guest; instead, 60 met the goal after the nine-month qualifying period. The group grew even bigger when the company decided to add its top internal salespeople to the mix, so that dealers and salespeople could network during the trip.
Looking for a ship that would not overwhelm the group, Gonzalez chose Norwegian Cruise Line's Majesty, on which the TGI group made up about ten percent of the 1,100 passengers. On board, the group had its own section of the dining room, within which attendees could sit wherever they wanted. During the three-night cruise to the Bahamas and Key West in December 1997, they enjoyed a welcome cocktail reception, a group day at the Blue Lagoon in the Bahamas, and a farewell reception.
TGI was please with "the cohesiveness of the group," as Hockersmith describes it. "From a business and loyalty standpoint, the cruise exceeded their expectations." In fact, four of the five itineraries that TGI is considering for its next incentive trip are cruise programs.
Aid Association for Lutherans: Insurance Company Will Be the First to Sail Disney
After 20 years of planning incentives for field representatives of Aid Association for Lutherans, Sally Klapper-Randa has an eye for new and creative itineraries. She has to: The agents (typically between 100 and 175 qualifiers) and their guests have been to such destinations as Maui, Puerto Rico, and London in the past.
"Every year, cruises are at the top of the list when we ask qualifiers where they want to go," says Klapper-Randa, field recognition and conference manager for the Appleton, WI-based organization, the largest fraternal insurance company in the country. But the company hasn't used one because a former senior executive was concerned about having the "cream of the company's crop" together on a single ship, for safety reasons.
With a new senior vice president in place, however, Klapper-Randa began to investigate cruise options. She needed to do a portion of the incentive trip at a hotel, where the group would hold its educational, networking, and recognition events, and then move to a cruise for a few days of free time. "Normally, our people don't have to pay any taxes because of the business aspects of our program," she says. "Knowing that the cruise portion would be taxable to our participants, we wanted that part of the program to be pure relaxation." (See box at left for more information about taxes and cruises.)
In the middle of trying to cobble together a land/sea program, she stumbled onto information about two new cruise ships getting set for launch at Walt Disney World in Florida. "I couldn't get everything with the hotels and ships to match up right on my own," Klapper-Randa explains, "because it was essentially two completely separate programs. The nice thing about the Disney cruises is that they put the whole package together, including transportation to and from the hotel and the cruise. Plus, they give us a complete breakdown of the associated costs of each, so we know how to break everything down for tax purposes."
The incentive trip, booked for March 1999, will include three days at Disney's Grand Floridian Hotel, followed by four days aboard the Disney Wonder, a 1,760-passenger ship that will sail to the Bahamas and a private island when it debuts at the end of this year. Although the cruise portion is designed as pure incentive, Klapper-Randa is kicking about a few ideas to bring the 170 couples together as a group. Some possibilities: a cocktail party with the captain, a group treasure hunt or trivia game, or a cookout on the private island.
Because this will be the group's first time on a cruise, Klapper-Randa worked closely with Creative Group, a corporate travel agency with offices in Appleton and other cities, whose cruise division provided help withnegotiations.
Texas-based Home Developer: Anything But Bored on Board
When Larry Flannery, vice president of ARTA Travel, Plano, TX, first mentioned a cruise incentive trip to his client, a Texas-based home developer, the reaction was a no-go. "They hadn't chosen a cruise in the past because they had a certain amount of fear that people would be bored on the ship, that there would be nothing for them to do," he says.
That was, until Flannery went through the ship's itinerary with the client. The ship's ports of call, they concluded, would generate as much excitement for the participants (140 independent realtors and their guests) as the company's previous eye-popping trips: Hong Kong and Beijing, Milan and the Orient Express, and Rome.
"An incentive should not have to sell the destination to the participants," says Flannery, whose agency specializes in meeting and incentive planning. "The name of the destination should have built-in sizzle, and while a cruise is not necessarily a destination in itself, we chose ports of call that were spectacular." Because the group did a full-ship charter of Windstar Cruises' Wind Star, they were able to choose their own stops during the 11-day cruise in October 1997: Rome, where they first boarded the ship, followed by Elba, Florence and Pisa, Cannes, Monte Carlo, and St. Tropez.
In addition to sightseeing at each of the destinations, the group was wowed by numerous special events, both on ship and on land, including a dinner award presentation in Cannes where the company actually re-created the Cannes Film Festival, complete with limos, paparazzi, and movie star lookalikes. Other events: a black-and-white theme evening aboard ship in Monte Carlo, after which participants could go ashore to the casinos; and an outdoor deck barbecue with the winners dressed in yachting attire. Group shore excursions were optional, but Flannery says about 90 percent of the participants opted for the sightseeing.
The client also found out first hand that inclement weather can be avoided on a ship in a way that it cannot be on land; when the weather turned bad at the planned stop of Portofino, they substituted the island of Elba. Another plus: Chartering the entire ship "resulted in much more bonding than other programs where participants can go out on their own," he says. "It forced winners to interact. Now they want to travel together again."
No details have been announced for the company's next incentive, Flannery says--except that it will be a cruise.
First, the good news: Pure incentives on cruises--those that are solely in recognition of performance--are fully deductible to the corporation, just like any other incentive. The official IRS guidelines are the same for an incentive, whether it takes place on a ship or on land any place in the world, says Jo Kling, president of the Coral Gables, FL-based National Sales Center for Corporate Cruises.
However, cruise incentives are taxable to the participants. Handing out "spending money" can offset the tax burden. Or, companies can choose not to take their deduction, which means that participants have no tax burden.
Confusion sets in when a company characterizes its cruise as a business meeting, rather than an incentive, Kling notes. Meetings on cruise ships that fly foreign flags have limits on deductibility; the exception is U.S. flagships that cruise only to U.S. ports (namely, a handful of riverboats and the Hawaii Cruises ship Independence).
For more information about the taxes on cruise programs, consult your incentive consultant or tax professional.
Cruise Myths to Dump Overboard Myth: Groups can't hold private events or receptions on board ship.
Reality: All cruise ships have public spaces and many now have dedicated meeting rooms. Although you might not always have access to all the ship's facilities for private functions, most are willing to work with groups to set aside space.
Myth: Participants will feel confined, and won't have much to do.
Reality: Cruise ships provide a variety of sightseeing and shipboard activities. Most ships stop at a different port each day or so, allowing participants to take in the sights of several different locations. And a ship's amenities usually include everything from swimming pools and sundecks to tennis courts and golf driving ranges.
Myth: Cruises are expensive.
Reality: Like resort programs, cruise programs come in all price ranges. Because cruises are all-inclusive, they can be less costly than comparable programs at resorts.
Myth: Interaction among the group will be limited if we don't charter the entire ship.
Reality: There are many ways to enhance your group's togetherness even if you're only part of the passenger list. If the group is large enough, you can often reserve an entire dining room for some or all meals; smaller groups can take over a section of the dining room. Other possibilities include special sightseeing tours, private receptions, and special events.
Myth: There's no way to make winners feel "special" on a cruise.
Reality: Virtually anything you can do on land, you can do at sea. Some possibilities: nameplates on cabin doors, flying the corporate flag next to the ship's flag, room gifts, customized menus with the corporate logo, and master accounts that allow participants free access to bars, health club and spa services, and the ship's gift shops.
Myth: Cruises are too much of a "party" experience.
Reality: Some cruises encourage a party atmosphere; others don't. The correct match is critical. Get demographic information on the ship's typical passengers (especially age and economic level) and find one that fits with your group.