Budgets and per-person spending are up, while group size is shrinking. Including meetings on your incentive trip is no longer taboo. And procurement and Sarbanes-Oxley are having a significant influence on site decisions. These findings and more are the results of our annual incentive trends survey.

The good news from this year's survey is that almost one-third of respondents grew their incentive budgets last year, and it looks as if spending will increase even more this year: 44 percent of our respondents expect their budgets will be higher in 2007 than they were in 2006.

Per-person spending has been on a slow and steady upward trajectory since September 11, 2001, with companies now spending an average of $3,400. Where they are traveling within the United States remains pretty much the same: warm weather destinations such as Hawaii and Florida. A full 72 percent of our readers also use offshore destinations every year or every other year. This year, Central and South America joined the list of popular international incentive choices, most likely due in part to the huge popularity of Costa Rica among winners.

We also asked readers about the growing influence of procurement, strategic meeting management, and Sarbanes-Oxley on their jobs — and found all three are clearly beginning to shape site decisions.

Unlike other incentive industry research, the vast majority of CMI's respondents hold sales and marketing management titles (43 percent) or are C-level executives (24 percent), so this survey truly is a view from the top.

THE BOTTOM LINE is that per-person budgets have grown 9 percent from 2005 to 2006. Interestingly, almost one-quarter of our readers reported per-person budgets of $5,000 or more; just a small percentage (15 percent) spent less than $2,000. Readers saw their budgets increase even more than they predicted they would in last year's survey: While 30 percent of respondents expected their budgets to increase when we surveyed them in late 2005, a more significant 56 percent reported in this survey that their 2006 budgets had increased over 2005. The biggest shift, however, was in group size, not spending: An average of 108 people qualified for respondents' most recent major group travel incentive, which is less than half the number reported last year. It appears that companies are cutting the size of their groups while maintaining the quality of the incentive experience; indeed, 37 percent reported cutting the number of qualifiers when budgets shrink. Companies are also getting the most out of bringing their elite salespeople or dealers/distributors together by including meetings on their trips: 76 percent of respondents said they do so.

THE PRIMARY GOAL of most respondents' incentive travel programs continues to be to grow sales; however, 23 percent of trips have dual purposes, from employee training to product education. A full quarter of respondents use incentive trips to motivate nonsales employees; however, the vast majority of nonsales incentive programs (62 percent) still rely on cash awards. Interestingly, it appears that cash still has a significant influence on salespeople as well: When asked which type of incentive reward best motivates salespeople to produce a significant sales increase, 36 percent of respondents chose cash, while only 23 percent chose travel.

THERE'S NO QUESTION that the decision regarding where to take an incentive group rests at the top level at most companies. According to 53 percent of respondents, a C-Level executive decides where the group will go. That percentage increases significantly in smaller companies with fewer than 100 people, where 83 percent of incentive decisions are made at the top. This year's survey saw a significant shift toward outsourcing the logistics of the programs: 32 percent of respondents said they use independent meeting/incentive companies, up from 19 percent last year.

WE ASKED A NUMBER of new questions in this year's survey. Among them was if closer corporate scrutiny is affecting incentive decisions. Clearly, it is, as we suspected: One-third of respondents said their jobs have been affected by Sarbanes-Oxley (10 percent said they spend 21 percent to 40 percent of their time on Sarbanes-Oxley-related paperwork), and 20 percent now must go through their directors of procurement when making incentive site decisions. But the biggest influence is the growing movement toward strategic meeting management within corporations: Half of all respondents now have an SMMP in place to govern hotel decisions and to maximize spend.

TO UNDERSTAND current destination trends, we asked respondents where they had taken their last major group incentive program and where they were planning to take the next trip. When it came to domestic destinations, the tried-and-true warm weather spots are still most popular, although there were more mentions this year of some of the country's most exciting cities, such as New York and Boston. As far as international destinations, the choices spanned the globe, from Sweden to Singapore. It still appeared that many groups are staying closer to home, choosing Mexico and the Caribbean over Europe. Central and South American destinations such as Costa Rica, Chile, and Argentina put that region on the list as well. The use of offshore destinations tracks almost exactly with each previous year post-9/11. For example, in our 2003 survey, 71 percent of readers said that they used offshore programs, compared to 72 percent this year. Finally, cruises are as popular as always, with 51 percent of respondents saying that they use them for all size groups. Interestingly, 59 percent of those who do so spend $3,000 or less per person, which is $400 less than the average per-person expenditures among all trips.

Methodology

IN OCTOBER 2006, Corporate Meetings & Incentives mailed surveys to 2,481 senior-executive subscribers who have decision-making responsibilities for their companies' incentive programs. Third-party incentive companies were not included. A total of 147 usable responses were returned, for an effective response rate of 5.9 percent. The majority of respondents (43 percent) held sales and marketing management titles, 24 percent were C-level executives, and 32 percent were in meeting/incentive management positions. Forty-nine percent worked in companies with 1,000 or more employees.