Incentive industry trends in 2010 point to little spare money for rewards and recognition
While US incentive industry professionals believe the economy’s negative impact on program planning is past its worst this doesn’t necessarily mean more corporate dollars will be freed up this year for rewards & recognition.
The Incentive Research Foundation (IRF) surveyed industry professionals during the month of April, asking them about incentive travel programs, merchandise/non-cash programs and ROI/budget considerations. The most promising data from the IRF’s most recent Pulse Survey show that respondents appear to be more optimistic about the current economic climate than they were in either the Summer or Fall of last year.
Here are some key highlights:
Q: What impact will the economy have on your ability to plan and implement incentive travel programs?
POSITIVE IMPACT: Spring 2010 Fall 2009 Summer 2009
69% 33% 24%
Q: What impact will the economy have on your ability to plan and implement merchandise/non-cash incentive programs?
POSITIVE IMPACT: Spring 2010 Fall 2009 Summer 2009
41% 26% 20%
Decrease
One-third of those surveyed predict that budgets for incentive travel will decrease this year, while 37% say they will remain unchanged. Things were a little better on the merchandise/non-cash side, where only 22% expect a decline (down from 51%), while 40% predict an increase and 37% say they see no change in budgets. This indicates that although there is raised optimism about the economy in general, it may not translate into more money for programs – at least not yet.
Other key issues and trends from the most recent IRF Pulse Survey include:
– Image issues remain: Key “influencers” on program design, implementation and product selection that peaked in Q3 2008 have stabilized in 2 out of 3 areas but sensitivity to program extravagance remains high, having risen from 45% to 64% between Q3 2008 and Q1 2010, making it the second most important influencer.
– Growth in individual travel: Respondents were asked if they anticipate their award strategy using more individual travel and fewer group trips, either temporarily or permanently. Although two-thirds predict no change in policy, 29% see some movement from group to individual travel. A similar question found that 24% see movement from merchandise awards to individual travel, and 21% see more use of debit/gift cards.
– Increased involvement by procurement: While most respondents anticipate no change with regard to the involvement of Procurement/Purchasing departments in incentive travel programs, 44% agree that their involvement will increase by some degree. Similarly, 38% say Procurement/Purchasing’s involvement in merchandise/non-cash programs will increase in 2010.
– More Domestic Travel: Although nearly half of respondents (47%) felt there would be no change in the basic make-up of incentive travel programs in 2010, another 42% predict a shift from international to domestic destinations, and 47% say the average length of travel programs will decline.
http://www.theirf.org