Download New IRF Pulse Survey Shows Recovery, Stability of Incentive Industry

PULSE SURVEY
The Incentive Industry
Trends 2012
March 2012
Background and Survey Purpose
2
Beginning in August 2008 it was decided that an appropriate topic for the 2008 Pulse
Survey would be an incentive industry trends outlook for 2009 and with the continued
economic conditions, also an appropriate topic for the trends outlook for 2012/2013.
Given that the Incentive Research Foundation (IRF) is charged with advancing the science
of incentives, it surveyed industry professionals to obtain their opinions about the more
salient trends affecting the industry during 2012/2013.
To this end, the IRF asked these professionals questions on trends with regard to incentive
travel programs, merchandise non-cash programs, and budget changes forecast for 2012.
In addition to the current topic on industry trends, the IRF tracks core issues of continuing
interest to the industry:
• The extent to which company financial forecasts influence incentive programs;
• The effect of competitor reactions on company incentive programs; and
• Sensitivity to others’ perceptions of company incentive programs.
Research Methods
3
Invitations to participate in this online survey were sent to 2189 incentive
providers, suppliers to the industry and corporate incentive travel buyers.
The 205 survey participants can be categorized1 as follows…
•
•
•
•
•
•
Provider (e.g., Incentive company or third party planner) (44.6%)
Supplier (e.g., hotelier, DMC, Airlines) (15.1%)
Corporate Incentive Travel Buyer (12.7%)
Corporate Meeting/Event Planner (12.7%)
Corporate Merchandise Incentive Buyer (7.6%)
Other (7.2%)
Data collection was conducted March 5th through March 27th, 2012.
1
This question was changed to multiple response in Spring 2012.
Highlights: Core Issues
4
100%
93%
90%
84%
80%
86%
81%
75% 75%
70%
60%
61%
69%
64% 64% 64%
45%
40% 39%
68%
61%
55%
49%
44%
42% 41%
47%
43%
Mar-12
Oct-11
May-11
Oct-10
May-10
Nov-09
Jul-09
Mar-09
31%
Oct-08
30%
74%
73%
52%
50%
40%
77%
64% 63%
Sep-08
Findings indicate that the
trends have stabilized this
period compared to the
previous four survey periods
which indicated a strong
positive upward trend for
each of the core issues
beginning in July 2009 –
October 2010. The overall
trends continue to remain
lower than reported in 2008.
The positive trend with
respect to the perceptions of
the company’s financial
forecast influences the design
and implementation of our
incentive program(s)
compared with the previous
three survey periods.
The company financial forecast influences the design and
implementation of incentive programs
Competitors’ reactions to programs impact the products and
services included in company incentive programs
Perception of the Public significantly influences the design of
our incentive program(s). *
Perception of internal (non-incentive) stakeholders significantly
influences the design of our incentive program(s).
*Previously question was asked as; “Sensitive to perceptions of program extravagance to the extent that it would impact the
type of company program awards and inclusions”
Current Topic
Industry Trends for 2011/2012
5
Incentive Travel Programs
Merchandise Non-Cash Programs
ROI – Budget Considerations
Perceived Impact of the Economy on Ability to Plan
and Implement Incentive Travel Programs
6
Have No Impact
Somewhat Negative
Strongly Negative
5
18
5
4
22
21
8
16
50
40
7
15
17
22
43
7
38
55
18
51
11
61
43
9
51
6
28
19
10
9
4
6
9
0
Mar-12
8
3
Oct-11
5
3
10
May-11
6
2
5
Oct-10
4
3
4
4
May-10
18
Nov-09
In the coming year what impact will the economy have on your
ability to plan and implement travel incentive programs?
(N=142)
Somewhat Positive
Jul-09
• Strongly negative 11% October 2011 vs.
0.7% March 2012.
• All negative impacts 62% October 2011
vs. 22% March 2012.
Strongly Positive
Mar-09
Respondents in the current survey
(March 2012) indicate they are
more optimistic and consider the
economy as having a “more”
positive impact on their ability to
plan and implement incentive travel
programs when compared with the
previous results.
No Answer
Note: The response categories were modified in the May 2011 and the historical data was adjusted to reflect these changes.
Perceived Impact of the Current Air Transportation
Environment of Incentive Travel Programs
7
No Answer
Strongly Positive
Somewhat Positive
Have No Impact
Somewhat Negative
Strongly Negative
100
12
80
60
• Strongly negative- 12% March 2012.
• All negative perception- 71% March
2012.
What impact does the current air transportation environment
have on your incentive travel program planning?(n=142)
59
40
20
22
0
5
3
0
Mar-12
Most respondents (71%) have a
negative perception of the current
Air Transportation Environment and
the impact on incentive travel plans.
Techniques Used In Coming Year To Enhance The Air Transportation
Portion Of Incentive Travel Programs, What Component?
8
56% anticipate that “All costs for air
transportation-related expenses”, are
to be included components of
Incentive Travel Programs in the
coming year.
• 55% indicate that “Only Tickets” will
be provided.
• 22% indicate that “Non-air options”
will be included.
• 10% indicate that seating upgrades
will be included.
• 5% indicate that “Airline club
passes” will be included
In the coming year, do you anticipate any of the following
changes will be made with regard to choices of incentive
travel programs? Check all that apply. (n=142)
All costs for air
transportation-related
expenses will be included
56%
Only tickets will be provided
55%
Non-air options (train, bus,
driving allowances) will be
use)
22%
Seating upgrades will be
included
10%
Airline club passes will be
included
5%
0%
50%
100%
Trending of Techniques Used To Enhance The Air Transportation Portion
Of Incentive Travel Programs
9
The inclusion of both components
are on a positive trend the past two
survey periods and currently are
above the May 2010 survey period.
60%
53%
52%
50%
56%
55%
45%
42%
40%
32%
30%
• The trend to include “Only airline
tickets” became a more prevalent
techniques beginning in October
2010 and continues to increase
until the current period.
28%
30%
22%
20%
10%
0%
May-10 October-10 June-11
Oct-11
March-12
Only tickets will be provided
All costs for air transportation-related expenses will be included
Anticipated Changes In Coming Year With Regards To
Incentive Travel Program Destinations
10
Most of the respondents (30%)
anticipate no change with respect to
the program destinations for
Incentive Travel Programs in the
coming year.
• 23% indicate that they anticipate a
change from “International to
Domestic” with regards to the travel
program destinations.
No change
From international to
domestic
23%
From domestic to
international
From land to cruise
From cruise to land
In the coming year, do you anticipate any of the following
changes will be made with regard to incentive travel
program destinations? Check all that apply. (n=142)
30%
19%
11%
9%
0% 10% 20% 30% 40%
Trending Anticipated Changes With Regards To Incentive Travel
Program Destinations
11
45%
42%
40%
There has been a siginifcant trend in
program destinations from
“International to Domestic” from
2010.
35%
30%
28%
26%
25%
23%
20%
19%
15%
10%
5%
16%
15%
14%
7%
7%
4%
2%
5%
3%
6%
10%
11%
9%
1%
0%
May-10 October-10 June-11 October-11 March-12
From cruise to land
From land to cruise
From domestic to international
From international to domestic
Anticipated Changes In Coming Year With Regards To Incentive
Travel Accommodations
12
Forty-two percent of respondents
anticipate reducing the “Total
number of days/nights” for the
accommodations portion of Incentive
Travel Programs in the coming year.
• 32% indicate “No Change”
• 30% indicate that “On-site inclusions
per participant will be decreased.”
• 30% indicate the “Number of rooms will
be reduced”.
• 28% indicate a “Change to “all
inclusive” pricing options”.
• 18% indicate the “Number of room
upgrades will be reduced”.
Total number of days/nights
reduced
32%
No change
On-site inclusions per participant
decreased
30%
Number of rooms reduced
30%
Change to "all inclusive" pricing
options
28%
Number of room upgrades
reduced
18%
On-site inclusions per participant
increased
12%
Total number of rooms
increased
11%
Total number of days/nights
increased
Number of room upgrades
increased
Don't Know
In the coming year, what changes, if any, will be made with
regard to accommodations for incentive travel programs?
Check all that apply.(n=142)
42%
0%
8%
4%
6%
20%
40%
60%
Trending Anticipated Changes With Regards To Incentive Travel
Accommodations
13
60%
52%
The “anticipated reduction” of both
components with regards to hotel
accommodations have continued to
increase the past two survey
periods.
50%
47%
41%
40%
42%
40%
32%
28%
30%
20%
30%
19%
15%
10%
0%
May-10 October-10 June-11 October-11 March-12
Total number of days/nights reduced
Number of rooms reduced
Anticipated Changes In Coming Year With Regards To
Sponsored Non-Meal Related Components
14
More than half (55%) of respondents
anticipate No Change with regards
to Sponsored Non-Meal Related
Components for Incentive Travel
Programs in the coming year.
Significantly reduced
1%
23%
Slightly reduced
• 24% indicate that Sponsored NonMeal related components will be
Reduced to some degree, and
• 21% indicated that Sponsored NonMeal related components will be
Slightly Increased.
21%
Slightly increased
Significantly increased
With regard to the sponsored (paid by your company) nonmeal related components such as airline tickets, transfers,
gifts, etc for incentive travel programs, what changes will
be made in the coming year? (n=142)
55%
No change
0%
0%
20%
40%
60%
Anticipated Changes With The Involvement Of Procurement
And Purchasing In Travel Incentive Programs
15
Most of the respondents (42%)
anticipate No Change with regards
to involvement of procurement and
purchasing for Incentive Travel
Programs in 2012, 53% agree that
procurement involvement will
increase by some degree in the
coming year.
Significantly decrease
1%
Slightly decrease
4%
42%
Remain unchanged
• 36% indicate that procurement and purchasing
involvement will “Slightly Increase” in the
coming year.
• 17% indicate that procurement and purchasing
involvement will “Significantly Increase” in the
coming year.
Significantly increase
In the coming year, do you anticipate the involvement of
procurement and purchasing with regard to your incentive
programs to…(n=142)
36%
Slightly increase
0%
17%
20%
40%
60%
Anticipated Changes In Incentive Travel Program Budgets for
This Year
16
Forty-nine percent (49%) of the
respondents anticipate budgets for
Incentive Travel Programs to
“Remain Unchanged” this coming
year.
5%
Significantly decrease
10%
Slightly decrease
• 15% indicate that budgets for
Incentive Travel Programs will
decrease by some degree in the
coming year.
• 36% indicate that budgets for
Incentive Travel Programs will
slightly increase this coming year.
36%
Slightly increase
Significantly increase
In the coming year, do you anticipate budgets for incentive
travel programs in general to… (n=142)
49%
Remain unchanged
0%
0%
20%
40%
60%
Trend Strategy For The Consideration Of Award Strategy Moving
(Either Temporarily Or Permanently) From "Group Trips" To
"Individual Travel Packages"
17
The majority (69%) of the
respondents do not anticipate
changing (either temporarily or
permanently) from "group trips" to
"individual travel packages" in the
coming year.
• A combined 7% indicate that the consideration
of award strategy moving (either temporarily or
permanently) from "group trips" to "individual
travel packages“ in coming year to decrease.
• 24% indicate that the consideration of award
strategy moving (either temporarily or
permanently) from "group trips" to "individual
travel packages“ to increase in the coming
year.
Significantly decrease
Slightly decrease
7%
69%
Remain unchanged
20%
Slightly increase
Significantly increase
With regard to planning and implementing incentive travel
award programs, do you anticipate the consideration of
award strategy moving (either temporarily or permanently)
from "group trips" to "individual travel packages" to…n=142)
0%
4%
0% 20% 40% 60% 80%
Geographic Region Chosen as “Destinations" for Incentive Travel
Program(s).
18
The majority (73%) of the
respondents indicated that North
America was their chosen region for
Incentive Travel Destination
programs.
73%
North America
61%
Caribbean
49%
Europe
30%
Central America
• Top regional destinations include:
• The Caribbean (61%)
• Europe (49%)
• Central America (30%)
18%
Asia
Not Applicable
Africa
Middle East
In the coming year, please indicate which geographic
region you will choose as your "destinations" for your
incentive travel program(s). (n=142)
20%
South America
0%
13%
12%
6%
20% 40% 60% 80%
Perceived Impact of the Economy on Ability to Plan and
Implement Merchandise Non-Cash Incentive Programs
19
In March 2012, respondents
anticipate the impact of the
economy to have a “positive”
effect on their ability to plan and
implement merchandise non-cash
incentive programs potentially
indicating a positive trend in the
coming year.
5
31
No Answer
Significantly Positive
Slightly Positive
Have No Impact
Slightly Negative
Signficantly Negative
5
19
Do you anticipate budgets for merchandise non-cash incentive
programs in the coming year to…(n=114)
0
2
23
22
27
19
33
33
1
24
2
20
6
1
16
18
19
20
11
4
3
11
20
21
23
17
• Negative impact 17% in March 2012 vs.
24% in October 2011.
• No impact 31% in March 2012 vs. 27%
in October 2011.
• Positive impact 53% in March 2012
vs. 25% in October 2011.
7
27
31
28
39
44
4
24
42
1
2
15
2
13
34
24
11
0
Note: 2008 vs. 2009 percentages not comparable because “not
involved” response category added in 2009 survey.
Note: The response categories were modified in the May 2011 and the historical data was adjusted to reflect these changes.
Anticipated Changes This Year With Regards To Merchandise
Non-cash Incentive Programs Award Selections
20
Approximately one-third of the
respondents anticipated the
following changes in the coming
year to Non-Cash Incentive
Program Award Selections:
“Included individual travel”
“Increased use of debit/gift cards”
Included individual travel
as an option
33%
Increased use of debit/gift
cards
32%
No change
31%
Included experiencerelated (SPA, event…
29%
Increased merchandise
award value
• 31% indicate “No change” to the
merchandise non-cash incentive
program this year.
• 29% indicated “Included experiencerelated (SPA, event tickets, etc.)”
• 25% indicated “Increased merchandise
award value”.
With regard to merchandise non-cash incentive programs,
what changes,, will be made this year with award
selections? Select all that apply. (n=114)
25%
23%
Added merchandise
Added debit/gift cards
13%
Decreased use of debit/gift
cards
13%
Decreased merchandise
award value
11%
0% 10% 20% 30% 40%
Merchandise Types Used Within Reward and Recognition Programs
21
Electronics (73%), Jewelry/Watches
(61%), and Clothing/Apparel (61%)
are the most common merchandise
used in Reward and Recognition
Programs.
73%
Electronics
Jewelry/Watches
61%
Clothing/Apparel
61%
58%
Open Card
55%
Luggage
• More than half of the respondents
indicate they use:
• Open Cards (58%)
• Luggage (55%)
• Golf items (53%)
• House wares (52%)
Golf Items
53%
Housewares
52%
Closed Card
46%
Office Accessories
45%
Plaques/Trophies
40%
Restricted Card
40%
Food
Flowers
What types of merchandise are you using within your
reward and recognition program? Select all that apply
(n=114)
0%
34%
25%
20% 40% 60% 80%
Use of Points Based System for Merchandise Non-Cash
Incentive Programs
22
A majority (74%) of the respondents
indicate they use a points based
system for their Merchandise NonCash Incentive program(s).
Pulse Survey
March ‘12
Don't
Know
0%
No
26%
Yes
74%
• 26% indicated they do not use a points
based system.
• Compared with October ‘11, more
respondents indicate the use of a
“Points Based System” for Non-Cash
incentive programs.
80%
74%
60%
48%
40%
40%
26%
20%
12%
0%
Do you use a "points-based" system for your
merchandise non-cash incentive program? (n=114)
0%
Yes
March-12
No
Don't Know
October-11
Anticipated Changes In Non-Cash Incentive Program Budgets
for This Year
23
Forty-four percent (49%) of the
respondents anticipate budgets for
Non-Cash Incentive Programs to
“Slightly Increase” this coming year.
• 11% indicate that budgets for NonCash Incentive Programs will
decrease by some degree in the
coming year.
• 48% indicate that budgets for NonCash Incentive Programs will
increase by some degree in the
coming year.
Significantly decrease
1%
Slightly decrease
41%
Remain unchanged
44%
Slightly increase
Significantly increase
Do you anticipate budgets for non-cash incentive programs
in the coming year to...(n=114)
10%
0%
4%
20%
40%
60%
Anticipated Changes Incentive Program Elements
24
In general, respondents indicated
that they anticipate most incentive
program elements to remain the
same in the coming year.
41%
Number of total qualifiers
32%
Awards budget
• Number of total qualifiers (41%)
• Awards budget (32%)
• Incentive Company involvement (23%)
This year, do you anticipate the following incentive program
elements will increase, decrease or remain the same?
(n=114)
54%
23%
Incentive Company involvement
• The following elements received
“Increased” ratings of greater than 20%
for 2011:
48%
60%
9%
2%
11%
4%
5%12%
Incentive Company management
fees
17%
53%
16% 15%
Incentive program non-meal
components
16%
55%
17% 12%
Communications budget
14%
Incentive program on-site gifts
11%
Per diem cash allowances
6%
Administration budget
5%
0%
Increase
Decrease
68%
14%4%
54%
53%
24% 11%
20% 21%
71%
20%
40%
Remain Same
20%4%
60%
80%
100%
No Answer
General Issues
Of Interest to the Industry
25
Budget Changes for Incentive Program Elements
Impact on Incentive Program As A Result Of
The Current Economic Conditions
26
48% of the respondents anticipate
no changes to the budget for
Incentive Programs in the coming
year as a result of the recent
economic conditions.
• 23% indicate that that budgets for Incentive Programs
have been reduced as a result of the recent economic
conditions.
• 15% indicate that budgets for Incentive Programs have
increased as a result of the recent economic
conditions.
• 12% indicate no budget change, but reduced the
component and added or increased a merchandise
incentive program component.
• 1% indicate the program has been eliminated entirely
as a result of the recent economic conditions.
As a result of the recent economic conditions, have you
made a change to your upcoming incentive program, and if
so have you… (n=205)
48%
No changes
23%
Reduced the budget
15%
Increased the budget
No budget change, but
reduced the travel
component and added…
12%
Eliminated the program
entirely
1%
No budget change, but
replaced the travel
incentive
1%
0%
20%
40%
60%
Impact of Budget Changes on Employee Morale
27
No budget change, but replaced
the travel incentive (n=2)
Aside from the respondents that
indicated an increase in the budget
for the coming year, in general,
respondents indicated that changes
to their Incentive travel program will
have either a “decreased impact” or
“remain the same” on Employee
morale.
No budget change, but reduced
the travel component (n=24)
100%
21%
67%
81%
Increased the budget (n=31)
19%
67%
Reduced the Budget (n=48)
13%
33%
You indicated that you have [inserted response on
change to their program], what impact has this has on…
0%
Increase
Decrease
20%
40%
Remain Same
60%
80% 100%
Don't Know
Impact of Budget Changes on Sales Results
28
The impact of budget changes on
Sales Results indicate significant
differences. For those that
increased the budget, or replaced
the budget with travel incentive,
over 90% indicate and increase in
Sales results. Conversely, those
that reduced the budget or reduced
the travel incentive portion,
between 67-73% indicate that
Sales Results have decreased.
No budget change, but replaced
the travel incentive (n=2)
No budget change, but reduced
the travel (n=24)
100%
25%
90%
Increased the budget (n=31)
Reduced the Budget (n=48)
67%
8%
0%
8%
10%
73%
19%
You indicated that you have [inserted response on
change to their program], what impact has this has on…
0%
Increase
Decrease
20%
40%
Remain Same
60%
80% 100%
Don't Know
Impact of Budget Changes on Profitability Results
29
The impact of budget changes on
Profitability Results indicate
significant differences. For those
that increased the budget, or
replaced/reduced the budget with
travel incentive, between 54-100%
indicate an increase in Profitability
results. Conversely, those that
reduced the budget 60% indicate
that Profitability Results have
decreased.
No budget change, but replaced
the travel incentive (n=2)
100%
No budget change, but reduced
the travel (n=24)
54%
33% 13%
87%
Increased the budget (n=31)
Reduced the Budget (n=48)
0%
17%
13%
60%
23%
You indicated that you have [inserted response on
change to their program], what impact has this has on…
0%
Increase
Decrease
20%
40%
Remain Same
60%
80% 100%
Don't Know
Use of Enhancement Tools/Techniques for Incentive Programs
30
Many of the respondents (74%)
indicate they use Social Media
tool/techniques to enhance their
incentive program.
• 57% indicate the use of CSR
components.
• 37% indicate that they use
Integration with Sales Management
Tools.
• 33% indicate that they use Gaming
techniques.
• 31% indicate that they use a Virtual
elements component.
CSR components (Corporate
Social Responsibility)
Integration with Sales
Management Tools
(salesforce.com, etc.)
Gaming Techniques
Virtual elements
Are you using any of the following to enhance your
programs? (Check all that apply) …(n=134)
74%
Social Media
57%
37%
33%
31%
0% 20% 40% 60% 80%
Trending of Enhancement Tools/Techniques for Incentive
Programs
31
While all components show
increases in the enhancement of
incentive programs, the “Integration
with Sales Management Tools” had
the most significant increase (24%)
compared to October 2011 as an
enhancement tool for incentive
programs.
No Answer
Social Media
CSR components (Corporate
Social Responsibility)
Integration with Sales
Management Tools
(salesforce.com, etc.)
• Social Media, Gaming Techniques,
and CSR components each have
significant increases as
enhancement tools when
compared with October 2011.
Are you using any of the following to enhance your
programs? (Check all that apply) …(n=134)
Gaming Techniques
Virtual elements
0%
October-11
20%
40%
March-12
60%
80%
General Perceptions of the Coming Year
32
Most respondents (73%) perceive
“The Economy” to be either Slightly
or Extremely positive in the coming
year.
• While the outlook on the Economy is
largely “positive”, the respondents in
general perceive “no change” or
“negative” view with respect to:
•Pre-Paid Gift Cards
•Individual Travel
Pre-Paid Gift Cards 10%
Merchandise Awards 11%
Extremely Positive
NO Change
Extremely Negative
1%
9%
13% 12%2%
68%
20%
8%
1%
25% 13%1%
57%
The Economy 5%
As you look ahead to the coming year, what is your view
of the following. (n=138)
41%
40%
Incentive Group Travel 4%
13% 6%
36%
44%
Individual Travel 10%
0%
39%
32%
40%
60%
80%
Slightly Positive
Slightly Negative
100%
Impact of 2012 Presidential Election on Incentive Program
Planning for 2013 and Beyond
33
Nearly two-thirds of the respondents
(66%) indicate they not changing
the current plans for 2012 or 2013
because of the upcoming
Presidential Election.
• 25% indicated that changes may
be made next year (2013) based
upon the process/outcome of the
2012 Presidential Election.
• Only 6% indicated that changes
have already been made to this
years program because of the
upcoming Presidential Election.
Which of the following statements best describes the impact
the upcoming Presidential Election will have on your
planning for 2013 and beyond?…(n=205)
Not changing our current plans,
or next year’s, in any way
because of the upcoming
Presidential Election
66%
Changes may be made next year
depending upon the
process/outcome of the upcoming
Presidential Election
The upcoming Presidential
Election has already caused
changes to be made this year
Changes are planned to be made
next year as a result of the
upcoming Presidential Election
25%
6%
2%
0% 10% 20% 30% 40% 50% 60% 70%