Corporate Incentives “Cautiously Optimistic”: IRF Study

A survey of those involved in the incentive travel industry has found a certain degree of optimism that corporate budgets for such programs will hold steady or even see moderate increases in 2010.

The Incentive Industry Trends 2010 study, released yesterday by the Incentive research Foundation trade group, polled corporate incentive travel buyers, suppliers and other industry professionals in October and November of last year. The study is the latest in a quarterly initiative by the IRF to trace the impact of financial forecasts, competitive stance and overall perception on travel and other non-cash incentive programs.

Compared to the surveys fielded in July and March 2009, respondents to this study reported that the economy was having a more positive impact on their ability to plan and implement incentive travel programs. Thirty-three percent reported that beneficial economic climate, versus 24% in July 2009 and only 11% in March.

While some planners still blame the recession as an obstacle to planning and executing merchandise or non-cash incentive programs, the proportion of the survey doing so fell to 34% this time from the 50% reporting negative economic fallout in October of 2008.

As for budgets, an aggregate 16% of respondents told researchers they expect corporate budgets for incentive travel to increase this year, while 30% say budgets will hold at their current levels. Thirty-four percent said the budgets for merchandise and non-cash incentive programs will remain the same as last year, while 32% anticipate either a slight or moderate increase in such spending in 2010.

Data from the most recent flight of the survey shows that the incentive industry is “cautiously optimistic,” IRF research committee chairman Mark Peterman said in a release. “Companies may have been sitting on budgets for the past 10 months or so, waiting to see how things were going to play out and whether there was going to be more pushback from the media and community regarding incentives.”

Forty-four percent of those polled foresee no changes in destinations for incentive travel programs in 2010, while 47% expect to see a switch from international to domestic travel this year.

And asked what changes they expect to see in awards selections this year, 27% of respondents forecast individual travel as an option, while 22% expect an increase in the use of gift or debit cards and 18% say they will add merchandise to their programs.

On the other hand, 30% responded that the changes in awards selections this year would include cutting total merchandise award values for their programs.