PULSE SURVEY. Trends October 2010

Transcription

1 PULSE SURVEY The Incentive Industry Trends 2011 October 2010

2 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 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 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 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.

3 Research Methods 3 Invitations ti to participate i t in this online survey were sent to 2187 incentive providers, suppliers to the industry and corporate incentive travel buyers. The 130 survey participants i t can be categorized as follows Provider (e.g., incentive company) (60.0%) Corporate incentive travel buyer (16.2%) Supplier, (e.g., hotelier) (11.5%) Other (12.3%) and represents, after undeliverable s and out of office adjustments are made, a response se rate of 7% Data collection was conducted September 13 th through September 30 th, 2010.

4 Highlights: Core Issues 4 Findings indicate that the trends have stabilized and are on an positive upward trend for each of the core issues since July However, the trends remain lower than reported in The positive trend with respect to the perceptions of program extravagance is rebounding at a faster pace when compared with the other two core issues. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 93% 84% 86% 75% 75% 77% 81% 73% 69% 64% 63% 61% 64% 64% 52% 47% 45% 40% 39% 43% 31% Sep-08 Oct-08 Mar-09 Jul-09 Nov-09 May-10 Oct-10 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 Sensitive to perceptions of program extravagance to the extent t that it would impact the type of company program awards and inclusions

5 Current Topic Industry Trends for Incentive Travel Programs Merchandise Non-Cash Programs ROI Budget Considerations

6 Perceived Impact of the Economy on Ability to Plan and Implement Incentive Travel Programs 6 Respondents in the current 5 5 survey (October 2010) continue to be more optimistic and 8 80 consider the economy as having a more positive impact 30 8 on their ability to plan and implement incentive travel 60 programs when compared with 18 the 2009 results. 22 Significantly negative 5% October 2010 vs. 5% May 2010 All negative impacts 27% May 2010 vs. 28% October In your opinion in 2009, what impact will the economy have on 0 your ability to plan and implement travel incentive programs? (N=130) Mar-09 Jul-09 Nov-09 May-10 Oct Significantly negative Moderately negative Slightly negative No impact Slightly positive Moderately positive Significantly positive Not involved

7 Techniques Used In 2011 To Enhance The Air Transportation Portion Of Incentive Travel Programs, What Component? A majority (45%, 43%) of respondents anticipate that All costs All costs for air transportation-related for air transportation-related expenses will be included expenses and Roundtrip airports transfers will be included and Roundtrip airport transfers 43% component of Incentive Travel will be included d Programs in % indicate that Only tickets will be provided. Seating upgrades will be included 6% indicate seating upgrades will be included. Airline club passes will be 0% indicate that t airline club passes 0% included will be included. With regard to the air transportation portion of incentive travel programs, what techniques will be used in 2011 to enhance this component? Check all that apply. (n=117) 7 Only tickets will be provided 6% 28% 45% 0% 50%

8 Anticipated Changes In 2011 With Regards To Incentive Travel Program Destinations 8 The majority (52%) of respondents anticipate no change with respect to the program destinations for Incentive Travel Programs in No change From international to domestic 28% 52% 28% indicate that they anticipate a change from International to Domestic with regards to the travel program destinations. From domestic to international From cruise to land 4% 15% From land to cruise 4% In 2011, do you anticipate any of the following changes will be made with regard to incentive travel program destinations? Check all that apply. (n=117) 0% 20% 40% 60%

9 Anticipated Changes In 2011 With Regards To Incentive Travel Accommodations A majority (40%) of respondents Total number of days/nights anticipate i reducing the total number reduced of days/nights for the accommodations portion of Incentive Number of rooms reduced Travel Programs in Change to "all inclusive" pricing 27% 32% indicate that number of rooms will be reduced. 27% indicate a change to all inclusive pricing options 26% indicate that On-site inclusions per participant will be decreased. 9 options On-site inclusions per participant decreased No change Number of room upgrades reduced On-site inclusions per participant increased Total number of rooms increased Total number of days/nights increased Number of room upgrades increased 3% 9% 9% 7% 19% 15% 26% 32% 40% With regard to accommodations for incentive travel programs in 2011 what changes, if any, will be made? Check all that apply.(n=117) 0% 20% 40% 60%

10 Anticipated Changes In 2010 With Regards To Sponsored Non-Meal Related Components 10 Slightly less than half (49%) of respondents anticipate i No Change with regards to Sponsored Non-Meal Related Components for Incentive Travel Programs in Significantly reduced Moderately reduced 0% 6% Slightly reduced 20% 26% indicate that Sponsored Non- Meal related components will be Reduced to some degree, and an equal percentage indicated some degree of Increase No change Slightly increased Moderately increased 13% 10% 49% Significantly increased 2% With regard to the sponsored (paid by your company) non- meal related components for incentive travel programs, what changes in 2011, if any, will be made? Will non-meal related components be (n=116) 0% 20% 40% 60%

11 Anticipated Changes With The Involvement Of Procurement And Purchasing In 2011 Travel Incentive Programs 11 While a third (33%) of the respondents anticipate No Change with regards to involvement of procurement and purchasing for Incentive Travel Programs in 2011, 65% agree that procurement involvement will increase by some degree in Significantly decrease Moderately decrease Slightly decrease Remain unchanged 1% 0% 3% 33% 33% indicate that procurement and purchasing involvement will Slightly Increase in Slightly increase 22% indicate that procurement and purchasing involvement will Moderately Increase in Moderately increase 22% 10% indicate that procurement and purchasing involvement will Slightly Increase in Significantly increase 10% 32% With regard to planning and implementing incentive travel programs, do you anticipate the involvement of procurement and purchasing in 2011 to (n=116) 0% 10% 20% 30% 40%

12 Anticipated Changes In 2011 Incentive Travel Program Budgets 12 One third (34%) of the respondents anticipate i t budgets for Incentive Travel Programs in 2011 to Remain Unchanged. Significantly decrease Moderately decrease 1% 3% 20% indicate that budgets for Incentive Travel Programs in 2011 to Slightly Decrease. Only a combined 43% indicate that that budgets for Incentive Travel Programs in 2011 to increase. Slightly decrease Remain unchanged Slightly increase Moderately increase 9% 20% 34% 32% Significantly increase 3% With regard to the sponsored (paid by your company) non- meal related components for incentive travel programs, what changes in 2010, if any, will be made? Will non-meal related components be n=116) 0% 10% 20% 30% 40%

13 2011 Trend Strategy For The Consideration Of Award Strategy Moving (Either Temporarily Or Permanently) From "Group Trips" To "Individual Travel Packages" 13 Slightly more than half (54%) of the respondents do not anticipate i changing (either temporarily or permanently) from "group trips" to "individual travel packages" in Significantly decrease Moderately decrease 3% 2% A combined 10% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages in 2011 to decrease. Only a combined 36% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages to increase. Slightly decrease Remain unchanged Slightly increase Moderately increase 5% 22% 13% 54% Significantly increase 2% 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=116) 0% 20% 40% 60%

14 Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs In October 2010, less respondents 5 4 anticipate the economic downturn to have a continued negative effect on their ability to plan and implement merchandise non-cash incentive programs than in Negative impact 23% in October vs. 24% in May No impact 19% in October 2010 vs. 21% in May Positive impact 45% in October vs. 42% in May Significantly negative Moderately negative Slightly l negative No impact Slightly positive Moderately positive Significantly positive Not involved In your opinion in 2011, what impact will the economy have on the ability to plan and implement merchandise non-cash incentive programs? Will the impact of the economy in 2011 be (n=130) Note: 2008 vs percentages not comparable because not involved response category added in 2009 survey.

15 Anticipated Changes In 2011 With Regards To Merchandise Non-cash Incentive Programs Award Selections 15 41% of respondents anticipated Increased use of debit/gift cards as an award selection with regards to 2011 Merchandise Non-Cash Incentive programs. 37% indicate that the use Included individual travel as an option will be increased in % indicate that the use of Included experience-related (SPA, event tickets, etc.) as an option will be increased in Increased use of debit/gift cards Included individual travel as an option Included experience- related (SPA, event Added debit/gift cards No change Added merchandise Decreased merchandise award value Increased merchandise award value Decreased use of debit/gift cards 41% 37% 30% 24% 20% 17% 17% 16% 10% With regard to merchandise non-cash incentive programs, what changes, if any, will be made in 2011 with award selections? Check all that apply. (n=) 0% 20% 40% 60%

16 Anticipated Changes With The Involvement Of Procurement And Purchasing In 2011 Merchandise Non-Cash Incentive Programs 16 36% of respondents anticipate no change with regards to involvement of procurement and purchasing for Merchandise Non-Cash Incentive Programs in 2011, most all agree that their involvement will increase by some degree in Significantly decrease Moderately decrease Slightly decrease 2% 0% 3% Remain unchanged 36% 30% indicate that procurement and purchasing involvement will Slightly Increase in % indicate that procurement and purchasing involvement will Moderately Increase in Only 7% indicate the procurement and purchasing involvement will increase by some degree in Slightly increase Moderately increase Significantly increase 7% 22% 30% With regard to planning and implementing merchandise non- cash incentive programs, do you anticipate the involvement of procurement and purchasing in 2011 to (n=113) 0% 10% 20% 30% 40%

17 Anticipated Changes In 2011 Merchandise Non-Cash Incentive Program Budgets 17 Of note, a combined 55% indicate that t budgets for Merchandise Non- Cash Incentive Programs in 2011 to increase by some degree. Significantly decrease Moderately decrease 1% 0% Only 10% indicate that budgets for Merchandise Non-Cash Incentive Programs in 2011 to Slightly Decrease. 37% of respondents anticipate budgets for Merchandise Non-Cash Incentive Programs in 2011 to Remain Unchanged. Slightly decrease Remain unchanged Slightly increase Moderately increase 10% 10% 35% 42% Significantly increase 3% In 2010, do you anticipate budgets for merchandise noncash incentive programs in general to (n=113) 0% 20% 40% 60%

18 General Issues Of Interest to the Industry 18 Budget Changes for 2011 Incentive Program Elements

19 Anticipated Changes Incentive Program Elements 19 In general, respondents indicated that t they anticipate i t most incentive program elements to remain the same in Incentive Company involvement Number of total qualifiers Awards budget 25% 17% 53% 5% 22% 26% 44% 8% 21% 25% 48% 6% Communications budget 19% 27% 48% 6% The following elements received ratings of Increase of greater than 20% for 2011: Incentive Company involvement (25%) Number of total qualifiers (22%) Awards budget (21%) Incentive program non-meal components Incentive program on-site gifts Incentive Company management fees Per diem cash allowances 17% 25% 49% 9% 14% 41% 38% 6% 10% 33% 7% 30% 48% 8% 48% 15% Administration budget 4% 35% 56% 5% 0% 20% 40% 60% 80% 100% In 2011, do you anticipate the following incentive program Increase Decrease elements will increase, decrease or remain the same? (n=130) Remain the Same Don t Know/No Opinion

20 Changes To 2011 Incentive Program As A Result Of The Economic Conditions In % of the respondents anticipate no changes to the budget for Incentive Travel Programs in 2011 as a result of the economic conditions in No changes Reduced the budget for % indicate that t that t budgets for Incentive Travel Programs in 2011 have been reduced as a result of the economic conditions in Increased the budget in % indicate that that budgets for Incentive Travel Programs in 2011 have increased as a result of the economic conditions in No budget change, but reduced the travel 16% indicate that no budget change, but reduced the travel, while 6% indicate no budget change, but replaced the travel for the Travel Incentive Programs in 2011 as a result of the economic conditions in % indicate the 2011 program has been eliminated entirely as a result of the economic conditions in No budget change, but replaced the travel incentive Eliminated the 2011 program entirely 2% 6% 17% 16% 22% 37% As a result of the economic conditions in 2010, have you made a change to your 2010 incentive program, and if so have you (n=130) 0% 10% 20% 30% 40%

21 Impact of Budget Changes in 2011 on Employee Morale 21 No budget change, but replaced the travel incentive (n=8) 25% 75% In general, respondents indicated that changes to their 2011 Incentive travel program will have either a decreased impact or remain the same on Employee morale. No budget change, but reduced the travel (n=21) Eliminated the 2010 program entirely (n=2) 43% 43% 14% 100% 0% You indicated that you have [inserted response on change to their program], what impact has this has on Reduced the Budget (n=29) 31% 45% 24% 0% 20% 40% 60% 80% 100% Increase Decrease Remain Same Don't Know

22 Impact of Budget Changes in 2011 on Sales Results 22 No budget change, but replaced the travel incentive (n=8) 75% 25% In general, most respondents indicated that changes to their 2011 Incentive travel program will have no impact on Sales Results. No budget change, but reduced the travel (n=21) Eliminated the 2010 program entirely (n=2) 14% 62% 24% 100% You indicated that you have [inserted response on change to their program], what impact has this has on Reduced the Budget (n=29) 10% 24% 38% 28% 0% 20% 40% 60% 80% 100% Increase Decrease Remain Same Don't Know

23 Impact of Budget Changes in 2011 on Profitability Results 23 In general, respondents indicated that changes to their 2011 Incentive travel program will have no impact on Profitability Results. No budget change, but replaced the travel incentive (n=8) No budget change, but reduced the travel (n=21) 13% 63% 25% 10%19% 33% 38% Eliminated the 2010 program entirely (n=2) 100% You indicated that you have [inserted response on change to their program], what impact has this has on Reduced the Budget (n=29) 21% 21% 28% 31% 0% 20% 40% 60% 80% 100% Increase Decrease Remain Same Don't Know

24 Corporate Social Responsibility (CSR) As Part Of Your Programs 24 The majority (51%) of respondents indicate that t Sometimes employees or customers are requesting CSR as part the programs. Never had a request for CSR as part of a program 26% 26% indicate that they never had a request for CSR as part of a program. 16% indicate that they are often asked to include CSR as part of their programs, while 7% indicate that CSR is required every time. Sometimes Often Every Time 7% 16% 51% Regarding CSR (Corporate Social Responsibility) as part of your programs, are your employees or customers requesting CSR components: (n=130) 0% 20% 40% 60%

25 Use of Social Media as Elements of Programs 25 The majority (58%) of respondents indicate social media is used To communicate with participants prior to an Incentive or Recognition Programs 36% indicate that they use social media to communicate with participants during an Incentive or Recognition Programs 27% indicate that they use social media to communicate with participants after an Incentive or Recognition Programs 3% indicate that they do not use social media as an element of the program. To communicate with participants prior to an Incentive or Recognition Programs To communicate with participants during an Incentive or Recognition Programs Other (Please specify) To communicate with participants after an Incentive or Recognition Programs To market your business We do not use Social Media at all 3% 36% 27% 26% 24% 58% For what elements of your program, or business, are you currently using social media (blogs, twitter, linked in groups, wikis) (n=130) 0% 20%40%60%80%

26 Predicting Business in 2011 & In general, respondents predict business to be better in both %5% and % 14% % 23% 68% 4% Are you predicting business in 2011/2012 to be: (n=130) 0% 20% 40% 60% 80% 100% Worse than in 2010 The same as 2010 Better than 2010 Don't Know

27 Is The Incentive Industry Doing Enough To Demonstrate The Business Value Of Incentives? 27 11% of the respondents indicate that they feel the industry is doing enough to demonstrate the business value of incentives. Yes, The industry is doing enough Business spokespeople (C-level support) 11% 66% 66% feel that more Business spokespeople (C-level support) is needed. 55% indicate that t more case studies would assist in demonstrating the business value of incentives. 47% indicate that testimonials would assist in demonstrating the business value of incentives. More case studies Testimonials Government lobbying Academic articles 55% 47% 45% 37% Other 4% Is the incentive industry doing enough to demonstrate the business value of incentives? If no, what else should be done? (n=130) 0% 20%40%60%80%