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Eighty-two percent of corporate executives in North America are committed to incentive travel programs in 2022, while only 2% have pivoted away from incentive travel permanently.
This is the most encouraging stat from Corporate inSITEs, a new white paper powered by the Society for Incentive Travel Excellence (SITE) Foundation, according to Terry Manion, CIS, CITP, president of the SITE Foundation and CEO of Inspire Consulting.
“I have witnessed several severe setbacks to the incentive travel industry in my career and each time the market returned with vigor,” he says. “COVID-19 was by far the worst of those setbacks, yet I am confident that the corporate users of incentive travel now more than ever before understand the positive impact incentive travel has on their companies’ cultures and bottom lines.”
Businesses in the incentive travel sector require insights to make decisions and invest effectively to navigate out of the COVID-19 pandemic, according to Selina Sinclair, CITP, vice president of research and content for the SITE Foundation and CEO of Realm.
“I have witnessed several severe setbacks to the incentive travel industry in my career and each time the market returned with vigor.”
“We’re living in the highest period of uncertainty known to our industry in history,” she says. “We hope to provide members and the industry a view and relevant information that will help them to make effective and informed decisions.”
Manion says that for more than a year, the incentive travel industry has been seeking answers to questions such as “What’s next?” “What will incentive travel look like with social distancing?” and “Will corporations look for a non-travel alternative?”
“Our goal with this survey was to capture the thoughts of the corporate executive at a time when there appears to be a light at the end of the tunnel,” he says. “Without their companies supporting incentive travel, there is no industry, thus their voices are critical as we all adjust to the post-pandemic environment.”
Recovery and the future of hybrid
Data from Corporate inSITEs clearly show gradual but definitive industry recovery.
“The results predict a slow return to incentive travel in Q3 and Q4 2021, a much stronger incentive travel market in 2022 and the likelihood that 2023 will see incentive travel spend approaching pre-pandemic levels,” Manion says.
Sinclair adds that international incentive programs should commence again towards the end of 2022 and into 2023.
The survey also found that virtual and hybrid formats are likely to play a role in the future design of incentive travel programs.
“Virtual events have enabled companies to create and engage new audiences, particularly the mega incentives that have hit record attendance numbers during 2020,” Sinclair says.
Manion adds that although hybrid elements will remain a part of incentive travel for the foreseeable future, they will not be as prevalent as many believed six months ago, with awards ceremonies, keynote presentations and similar elements broadcast to a home audience.
Timeline: Incentives vs meetings
Corporate inSITEs data show that, domestically, recovery of corporate meetings seems to be outpacing that of incentive travel (though, curiously, this trend is reversed for international events).
Sinclair believes this difference is due in part to the global nature of incentive programs and different vaccine rollout schedules that make it challenging to locate destinations. Manion adds that the intimate settings and unique experiences that are key to incentive programs also contribute to the disparity.
“Virtual events have enabled companies to create and engage new audiences, particularly the mega incentives that have hit record attendance numbers during 2020.”
“While this is a broad statement, incentive travel is about the journey, the experience and the immersion of cultures. Social distancing does not eliminate this possibility, yet it certainly reduces the list of memorable experiences that can be created,” he says. “While corporate meetings have evolved and adopted a more experiential learning model, meetings are still generally about learning, information sharing and strategic planning. It is much easier to provide these elements in a more sterile manner until we are all more comfortable. These learning goals are also more easily delivered virtually or in a hybrid environment.”
Risk management and destination selection
Contracts/risk management and destination selection will be even more critical for incentive travel programs as the industry recovers, according to survey findings.
“We were all surprised by the COVID-19 pandemic—contracts had not been written with the expectation of such widespread cancellations and the uncertainty of the future,” Manion says. “Force majeure clauses, while effective in many cases, left too much grey and room for interpretation. This created risk for all parties and highlighted the need for clarity so that all parties feel that as much risk as possible has been mitigated.”
He says hygiene, safety protocols and vaccination rates will factor greatly into destination selection over the next two to three years.
“That could lessen over time, but these areas will not recede to pre-pandemic importance,” Manion says. “Corporations are making decisions for their achievers and thus have a greater responsibility to ensure safety that we all do when we are selecting a vacation. COVID-19 has added items to the critical checklist that were not given a lot of thought pre-pandemic.”
Sinclair concurs, adding that “destination preparedness now becomes equal to destination attractiveness.”
So what must happen to ensure the projected recovery of the incentive travel industry?
Sinclair says industry and governments must jointly rebuild confidence to enable safe reopening of borders, and Manion adds that high global COVID vaccination rates are key to corporation and individual confidence in traveling.
“In addition, destinations and planners must continue to adopt practical protocols that ensure a safe environment onsite,” Manion says. “While some of the current social distancing mandates will be removed, hygiene will remain very high on incentive travel planner and attendee lists of important criteria.”
