INCENTIVE TRAVEL has made it into the mainstream press lately, with reports that luxury trips are back in full force as the result of a strengthening economy.

A recent story in USA Today focused on a survey of 50 Fortune 500 companies done by the Business Travel Coalition (see next page), which found that most of the companies expect to increase their incentive travel budgets next year. The reasons? A better economy, higher profits, and fear of rival companies luring their top salespeople away with their own programs.

Dick Gaeta, president of Premier Incentives in Marblehead, Mass., and a longtime industry practitioner, sees the conditions for incentive travel improving. “In the past few years, companies have been using stored value cards, weekend trips, and merchandise to motivate, and now employees are saying, ‘When are we going to do something exciting?’”

Gaeta also agrees that companies should be worried about losing employees. “As things pick up, you'll start seeing companies cherry-picking the brightest people from their competitors and offering them major perks again. Companies are realizing they have to focus on the whole compensation package. And, for your dealers and distributor clients, you don't want to lose them to your competitors.”

Meg Luetkemeyer, director of project management for Fenton, Mo. — based Maritz Inc., reports that travel to more exotic destinations is picking up steam. “We can gauge it by the number of presentations we're doing for programs in 2006.” Her clients are mostly in the telecommunications, insurance, and petroleum industries. “For the past few years, our domestic programs have been mostly to Las Vegas, Phoenix, Orlando, San Francisco, and Hawaii. Our international programs were in England, Italy, Switzerland, and South Africa. Now we're looking at more exotic destinations like Russia and China, Berlin and Prague,” she says.

“Companies are also starting to put more money back into their programs. We did a program in London that was very expensive, very exclusive. Of course, this was for a larger company. It will take some of the smaller companies longer to come back to what they once did, but right now things look very positive.”

The Boston-based Navigant Performance Group handles incentives for the high-tech, financial, and direct selling industries. Laura Yates, account executive at Navigant, also reports a turnaround in travel, “especially with long-term clients that were doing merchandise. The budgets aren't quite as robust, but they are seeing the value and need of performance improvement and seeing [travel incentives] as vital and necessary to the business mix.”

Yates admits she's cautiously optimistic. “You don't know what's coming around the bend. But if everything stays on an even keel, things look pretty good.”