In 2020, the future of the tourism industry was dramatically uncertain, and with it, that of incentive travel. The world and all its possibilities to see new horizons screeched to a halt as international borders closed. The pandemic had the industry on a chokehold. Not a sector has been spared. This nevertheless did not prevent travel experts and travelers from planning what they would do as soon as activities resume.
Yes, activities resumed. Agencies, airlines, hotels and other travel professionals sold again, and tourists bought again. Tourism in general is on the right path, as the market is expected to grow by 13.16% by 2023 and generate up to 1134.55 billion euros.
This article will go over the current state of the incentive travel sector, and tackle which trends are worth surfing on to (re)launch one’s activities.
Without further ado, let’s get to the heart of the matter.
An essential subset of the MICE industry, is Incentive travel still relevant ? ✈️
Simply put, incentive travel is an energy booster that is designed, planned and delivered to hire, motivate and retain talent and interesting profiles within a company.
Depending on the size of the company, incentive travel can be a one-off reward, but for others it is part of a complete reward programme.
More than ever, corporate teams need to be united and energy needs to be infused into the general atmosphere. And since the Coronavirus outbreak, the lockdowns and urges to be together again, incentives are increasingly in demand.
Why so, you ask?
Albeit there is no single standard for how incentive programs should work, travel instead of any other reward lets the recipient equate it to a more pleasurable experience than just a monetary gain. It seems good memories tend to have more value now that we are more mindful of how we spend our time …
Generally incentive travels last from 3 to 7 days and are a well-thought blend of team-building activities, networking opportunities and free personal time to explore and enjoy the destination. It is a well thought strategy designed to motivate employees who will put in the extra effort to hit the targeted goals, guide sales teams towards excellence, or to address productivity gaps.
Do incentive travel guarantee real ROI for companies? 🤑
Many companies find it hard to embrace the intangible value of incentive travel. Some might see it as a very extravagant perk not worthy of being spent so much on. Therefore it is your job to translate to your clients how if planned and implemented correctly, incentive travels definitely offer an excellent ROI.
The Incentive Travel Industry Index found that 70% of companies investing in incentive travels believe their programs are somewhat effective. Yet, only 2 in 10 formally gather data illustrating how their investment is paying off. It however goes without saying that tracking data is crucial to evaluate the efficiency of their programs and improve it further if needed in order to drive great work and higher profits.
Three main performance metrics are often used to evaluate sales performance:
- Revenue (66%)
- New customers (49%)
- Product sales in units (37%).
Here is a simple formula to calculate you Incentive Travel ROI: (H3)
ROI: % ROI = (Total Benefits – Total Costs) / Total Costs
Normally, within a one-year time frame after the termination of the incentive travel, you should come up with more accurate numbers.
Programs designed to reinforce morale and teamwork often have no KPIs. It makes it hard to pull concrete data out. Nevertheless, managers can review these programs with engagement surveys or track participation.
So yes, it will show up in the business results, but the benefit achieved will be found much deeper: incentive travels are good leverage for higher employee satisfaction rates, retention of top performers and a more positive organizational structure, ultimately leading to increased revenue. The correlation between incentive travels, satisfied employees and profitability is critical.
Is incentive travel a profitable niche to jump in post pandemic? 💁🏽♀
Short answer: YES.
It definitely differs from selling other types of travel, but for those willing to learn the ropes, it is a highly profitable niche with potentially high returns. Knowing it is the highest spend per person of any type of group travel, again, the answer is “YES, it is a profitable niche”.
Given spending money on incentive trips is not on every CEO's usual task lists, one simply has to learn how to sell it to them. But according to the IRF (Incentive Research Foundation), properly designed and executed incentive programs can increase sales productivity by 18% and produce a ROI of 112%. Companies granting non cash rewards such as incentive travels have 3 times higher revenue increase.
They might think it is not necessary to hire a professional to take care of it, that this kind of project is totally feasible on their own, but you also have to convince them otherwise.
You bring in valuable expertise, fresh ideas and solutions to help them save time and money. It is a win-win.
With the Coronavirus outbreak and lockdowns ensuing, companies realized they had to show their employees that they value the resilience and loyalty they have shown, but also increase productivity in order to make up for the capital lost when the world faltered. Businesses will want to rely on professionals knowing what, why and how to do things properly.
Millennials (born between 1981 and 1996) are slowly becoming the major working population and are expected to make up 75% of the global workforce by 2025. We know that this generation much prefers travel experience over cash. We can therefore deduce that demand will increase.
On top of that, the IRF (yes, again) predicted a 34% increase in overall budget dedicated to incentives for 2022. Companies obviously adapted to post-pandemic needs.
How to successfully sell incentives post-COVID19 era? 👨🏻💼
First of all, it is important to remind companies’ leaders that incentive travel is a tool. The key is to make sure they understand how these projects will complement their overall goals and benefit their business.
To begin with, as a travel agent selling incentives, you need to understand why the company is offering the incentive. What is the end goal? What will the employee be galvanized for? Once you have this information, it is time to come up with several ideas. The job of an incentive planner is to create meaningful, unforgettable experiences for every participant. One factor you always want to see in your programs is “the wow factor”, for both employees and employers.
Secondly, you have to make sure you collaborate with trustworthy good suppliers. Partner up with hotels, transport companies, event organizers capable of providing prices and exceptional quality services. This will ensure you a good reputation, therefore full trust from future clients.
One thing is for sure, the question today is no longer whether incentive travel is worthwhile and lucrative (because it is), but rather what you, as an Incentive Queen/King in the making, can do to reach or even better, outperform pre-pandemic levels.
We wrote about a Covid-19 Survival kit, listing up pragmatic and effectives advice on how to bounce back.
Post-covid incentive trends travel agents must adopt, and rules to follow 📈
Here are 4 rules still relevant to ensure spotless incentive programs ⚠️
1/ Develop measurable travel incentive programs through pre and post trip employee surveys:
Knowing the impact of your incentive travel plans will guide you toward the changes it will need, if needed.
2/ Leverage your network abilities to negotiate better rates:
You will want to offer the best without breaking the bank. But do not go for the cheapest options either because it might not lead to pleasurable experiences for your customers. Maintaining good relations with your suppliers might even lead to discounts your clients will mostly appreciate.
3/ Guarantee compliance with local health regulations:
It is true we are not in lockdowns anymore and tourism resumed with almost all countries requiring no more PCR tests to cross their borders, but COVID-19 is still a thing.
4/ Maintain a fluid communication & transparency with your clients and suppliers:
The past three years have been filled with unnerving changes, and communications has been at the heart of our daily activities to stay sane. Nothing has changed. Reassure your clients by providing them with every necessary and extra info that crosses your mind.
And to finish, 3 incentive travel trends you must surf on to attract customers 🆕
1/ Traveling local and sustainable:
We know it, staycations are here to stay! More and more tourists are aware of the impact they have on the environment and wish to act accordingly. Isolated destinations such as mountains or the countryside are generally popular. Check out our article talking about 4 new trends in the tourism industry post-Covid you must pay attention to, and this one about how you, as a travel expert, can boost the sustainability in your trips.
2/ Some prefer luxury travel…
Some people want to experience the luxury they would usually not have access to on a regular basis. Adding glitter to your incentive travel program might be the boost needed to jumpstart employee productivity.
3/ And some may like different travel experiences:
Offering several options will definitely be welcomed, as long as it stays in the budget. Although travel in general is incentive enough, being given the illusion of choice will indubitably amp up recipients’ motivation.
The incentive travel industry is currently rebounding from the pandemic. And from 2022 onward, we can expect real eagerness for tailor-made travel perks. Personnalisation and bespoke experiences will be increasingly infused in future incentive travel projects.
Now is the time to arm yourself with a powerful tool in order to deliver incentive travel proposals your prospects will not be able to decline.
Have a look at the 6 features your incentive travel software needs, and BOOK A DEMO with us to discover how we can help you go further.
Share it
.png)
