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Incentive Travel

Indications have emerged this year suggesting that the incentive travel market is finally stabilizing, with suppliers and managers gaining greater scope for the designing and implementing of incentive programs, as the influence of inhibiting factors in the general marketing environment have declined in importance. For example, this year’s Incentive Research Foundation Spring Pulse Survey shows that, compared to the previous four survey periods beginning July 2009, factors such as the client company’s financial forecast, competitor reactions, and sensitivity to program extravagance have weakened in the degree of influence they have on the quantity and quality of incentive programs.

Sensitivity to company forecasts has dropped below pre-­‐recession levels as has sensitivity to competitor reactions. This is most likely due to better confidence in forecasts and less volatility in the marketplace. Of note, however, is the fact that sensitivity to extravagance has stayed the same since the last survey, with 64 percent of respondents to the Incentive Research Foundation’s survey agreeing that it influences their program decisions. Overall, the economy’s impact on program planners’ ability to implement incentive travel programs is stabilizing with about 66 percent saying that the economy has either no impact or a positive impact. Still, a full quarter of respondents view the economy as having a slight or very negative impact on their programs.

The evidence cited by the Grass Roots Group’s Meetings Industry Report leads to a similar conclusion:

‘To say that the [incentive travel] market has returned to the good old days of pre-­‐ recession would be misleading, however. In particular, the more lavish client events are yet to come back. Companies remain very rate-­‐sensitive and want venues that are fit for purpose rather than those that impress’.

Regarding choice of destination for incentive programs, the Incentive Research Foundation Spring Pulse Survey shows that there was little change since the previous survey. Over 50 percent of program planners said they would not be changing their destination choice. About a quarter said they will be moving from an international to a domestic location and a little over 10 percent will be moving back to an international destination.

Involvement by procurement is beginning to normalize as well with over 50 percent of respondents in the Spring 2011 survey seeing no change or only a slight decrease in procurement’s involvement -­‐ significantly different from the Autumn 2010 survey, in which 64 percent of respondents saw an increase in procurement’s involvement.

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