The Incentive Research Foundation once again took the opportunity across IMEX America in early October, to release their latest Incentive trend index report.
In it's sixth year, the collaboration between IRF and the SITE Foundation, alongside research partner Oxford Economics, have again created an indispensable annual report on the state of incentive travel. \Providing data on current and future evolution within incentive events and travel.
The 2024 online survey, fielded globally from May to July 2024, was
customised for five distinct incentive travel professional roles:
• Corporate end user
• Destination management company (DMC)
• Destination marketing organization (DMO)
• Destination supplier
• Third-party agency (incentive travel agency)
Over 2,800 incentive travel industry professionals, representing 19 industry
verticals, and 85 countries, participated in the survey
Our key takes from the report:
Growth in incentive travel to rise, but with concerns for cost and talent:
Overall, growth is projected for the incentive travel industry through 2026. Incentive travel buyers expect activity and per person spending above 2024 levels over the next two years. However, they also report concerns around rising costs, attracting talent to the industry, and safety considerations.
APAC is the only region where most buyers (more than 50%) expect an increase in incentive travel activity in 2025 and 2026, compared to 2024. Meanwhile, fewer respondents in Western Europe, expect an increase over the next two years.
Growth, Budgets and Spending:
Hotel, airfare and F&B top incentive budgets The largest expense expected in 2025 or incentive travel programs is on hotels, which should represent 27% of total budget allocation (up from 25% in 2024).
Airfare will comprise 22%, followed by food and beverage spending (18%), and activities (13%).
Meanwhile, third party agency fees should see its share decline by three percentage points to 6% (from 9% in 2024) – the largest percentage point decline by category from the prior survey.
Half of all buyers expect spending on hotels to increase by 2025; followed by increases to air, food and beverages, and then activities. An increase in the number of attendees in 2025 is expected to drive budget changes among 32% of buyers.
The Importance of Free Time:
Free time has risen the most in rank relative to the past survey (from 8th to 4th) Group dining activities increased two places to become the most appreciated activity in an incentive travel program.
The biggest improvement in importance is in free time, jumping four places to fourth.
Meanwhile, multiple options aimed at smaller groups has become less important in measuring a program’s success.
2024 rank
Group dining experiences
Group cultural sightseeing experiences
Activities that promote relationship-building
Free time
Award celebrations
Luxury and ‘bucket list’ experiences
Team-building activities
Corporate Social Responsibility (CSR)
Multiple options aimed at smaller groups
Activities promoting wellness
Meetings
Instagramable moments
One-on-one experiences (e.g. lesson)
Shopping experiences
The popularity of traditional incentive programs is demonstrated by buyers seeing increased use of traditional qualification-based sales incentives (45%) and the view of incentive travel as a reward for the individual (47%).
But at the same time, buyers see some organizations increasingly turning toward company-wide trips (37%) and events that bring together dispersed colleagues
(31%), showing that the incentive travel ecosystem is also broadening beyond its traditional base.
Senior Leadership and it's evolving role with Incentives.
Senior leadership wants incentive travel to do more, meaning that both soft-power and hard power themes are being emphasised.
For example, most buyers report senior leadership sees incentive travel as playing more of a distinct role in motivation and culture building (58%).
But at the same time, some buyers see senior leadership as becoming more focused on managing programs for financial ROI (40%).
The role of incentive travel as a strategic differentiator edged ahead of its role as a
“need to have” profit driver. Among end-users, 55% report senior leadership views
incentive travel as an essential strategic differentiator or source of competitive advantage. Incentive travel is also viewed as a ’need to have’ from the perspective
of driving profits among 48% of respondents.
In the previous year’s survey, more respondents cited incentive travel as essential from a profit stand-point (53%), than as a source of competitive advantage (48%)
Safety considerations are increasing in importance
The most commonly cited program consideration that is increasing in importance is that the destination is perceived as safe from a crime/threat perspective (73%). Cost considerations are also prominent with 72% of buyers expecting it to increase in importance. The share of buyers citing geopolitical risks as increasing in importance was 71%. The presence of a good DMC is increasing in importance among 44% of all buyers surveyed.
More respondents agree political considerations will override other destination
considerations.
New Destinations and a rise in All Inclusive options.
Buyers are increasingly looking for something new and seeking destinations they haven’t used before (70%). Resorts – both all-inclusive and regular – have gained popularity (42%), while destinations within shorter distances from participant origin should see increased use (40%).
Urban locations and places that are a greater distance from participant origin see more decreasing use than increasing use. Among buyers expecting increased use of
cruises, multiple ports of call and budget are cited as the main reasons.
Many North American buyers report they aren’t using but are willing to consider:
South America (32%), Oceania (30%), or Cruises (30%)
Western Europe stands out as a region from which buyers would be most willing to consider new destinations; for example, with 45% willing to consider Hawaii.
Future Trends - AI, Gen Z and Relationship building.
Most respondents agree that younger generations of qualifiers will cause a powerful “retool” of incentive travel (67%). There is even a portion of the sector, more than 1-in 10 respondents (13%), that believes that museums, old churches, and ancient buildings have no place in modern incentive travel planning.
Among those that anticipate AI will be used in incentive travel, most expect uses such as for preparing program materials and planning, forecasting, and budgeting. AI will transform the way people do things, particularly in incentive travel. Most respondents expect AI will be used (or is currently being used) to prepare program
materials (62%), as well as in planning, forecasting, and budgeting (54%).
Many (48%) view the relationship between buyers and suppliers as complex. Survey results confirm relationships among buyers and sellers continue to be tested. Many indicated relationships are challenging, difficult, uncertain, or weakened, even as some of their colleagues referred to relationships as strong, stable, or efficient.
Incentive travel agencies are more negative on channel relationships (47% cite terms that are generally negative) than positive (31%). On the other end are suppliers, such as hotels, who are more positive (42%) than negative (31%).
IRF Featured Summary:
By 2026, 45% of buyers expect incentive travel activity to be above or significantly above 2024 levels, with 55% expecting spending increases to match inflation or improve programs.
Spend per person for technology, finance and insurance, and automotive industries are higher than the overall average. Direct sellers are most expectant of a rise in incentive travel activity in the next two years.
Buyers are increasingly looking for something new and seeking destinations they haven’t used before (70%). Resorts – both all-inclusive and regular – have gained popularity (42%), while destinations within shorter distances from participant origin should see increased use (40%).
Traditional forms of program qualification will continue to be the most frequently used, although company-wide programs and events that bring together dispersed colleagues show that the incentive travel ecosystem is also broadening beyond its traditional base
Senior leadership wants incentive travel to do more, meaning that both soft-power and hard-power themes are being emphasized. 58% of senior managers see incentive travel playing a more distinct role in motivation and culture building, and 40% are more focused on financial ROI.
67% agree that younger generations of qualifiers will cause a powerful “retool” of incentive travel
Incentive travel professionals face short- and long-run challenges, with inflation and workforce issues cited the most. Some challenges that are less prevalent in the short-run are expected to grow in the future, such as climate change and an increased focus on sustainability.
In North America, free time has risen to the feature most frequently cited as important to a successful incentive travel program, while group activities are relatively more important elsewhere.
Political considerations, such as how selection of destination will be perceived internally and externally, are increasingly important. 71% of respondents agree political considerations will override other destination considerations compared to 51% in 2023.
Nearly two-thirds of respondents believe generative AI will soon be used (or already is being used) effectively within incentive travel. Most expect uses such as for preparing program materials and planning, forecasting, and budgeting.
So when it’s decision-making time for buying groups, how can you make sure these factors have been taken into account with your events strategy? Reach out to discuss your next approach to your future incentive event programs.
Get in touch with the team - info@wearemeat.com
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