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THE INCENTIVE MARKET: Poised to TRAVEL FAR

ASK PROFESSIONALS in the incentive travel industry to discuss trends and you're likely to hear differing opinions. But one thing they will agree on is that the incentive travel business-the practice of rewarding employees with tr ips rather than cash-is big business. The Incentive Federation reports that incentive travel is an $8.4 billion industry today.

Although money talks, incentives inspire. Terry Epton, executive vice president of destination management company USA Hosts in New Orleans and a director of the Society of Incentive Travel Executives, quotes a SITE survey showing that travel is a stronger motivator for employees. "If an employee got a cash bonus, he'd probably put it toward a college fund, or buy a new washing machine. But if he were to go on a trip, he'd feel like a millionaire."

Epton adds that USA Hosts gives incentive travelers extra special treatment. "Incentive travelers have specific needs," he says. "That audience consists of high-performers-overachievers and winners-so we try to be creative and anticipate what they are looking for." As an example, Epton describes how baked Alaska is served at an incentive dinner: "We turn out the lights, and the whole kitchen staff comes out carrying this mile-high flaming baked Alaska, and they serve it while it's still on fire. The guests can't believe it."

Customized incentive trips are the new wave, according to Robert Vitagliano, executive president of SITE. "We've gone from almost dictating what [the incentive traveler] will enjoy to understanding that everyone is unique, and that means a shift in individual incentives." In addition to choosing from a list of venues, incentive travelers can also choose their own activities, according to Vitagliano. "The biggest change is the understanding that they need free time and options. One person may go swimming while someone else might go shopping, but they will join each other at night for special events."

FLYING SOLO? The push toward customization in incentive travel signals a shift away from group tours, according to Kimberly Klytta, Chicago-based national sales manager for The Ritz-Carlton. "The two reasons people choose individual travel are freedom of choice and the perceived high value," she says. "Five years from now, there will be a move from group travel to letting people choose individual travel that best works for their schedule." She adds that The Ritz-Carlton offers individual incentive awards at four levels, the highest being club level, which features a private floor with exceptional amenities including five complimentary food and beverage presentations daily.

However, group travel will never disappear, says Vitagliano, who notes that individual incentive travel can be more costly "unless all you're doing is giving someone two airline tickets and hotel reservations."

"There are two big advantages of group travel," he explains. "The greatest part of incentive travel is the recognition. When you go on a group trip and you are there with your peers, you are all patting each other on the back saying, 'We worked hard.' The other advantage, from the company's point of view, is that it is creating bonds. You get to meet the CEO, and it's an opportu-nity to create relationships and to understand that there is more to a company than the paycheck."

Epton agrees, adding: "It used to be companies sent you to Hawaii, gave you a tab and left you alone. Now they want to bug you and keep you involved, but in a good way. They don't want to lose people."

Another trend in incentive travel is a movement toward unique venues, says Michele Nichols, publisher of The Guide To Unique Meeting & Event Facilities.

Nichols' publication offers 5,000 North American venue alternatives for special event planners. "On our Web site (www.theguide.com), we have a service called SiteSearch, where you can input criteria and we'll find a facility to meet your needs." Venues include universities, wineries, aquariums and wax museums. Nichols adds: "There is usually a pretty substantial educational bonus. A lot of people haven't stood on a college campus since they graduated. It can be exhilarating and nostalgic. You can get the creative juices flowing around our venues."

INVESTIGATING INCENTIVES Now that you know a little more about the incentive travel business, how do you break into it?

"You need to find exposure. I believe in exhibiting at incentive house trade shows," Vitagliano says. "There are times when you should cut your fees to get in the door and show them what you can do. For example, last year SITE held a 'university' at The Westin Mission Hills Resort in Palm Springs, Calif. The band at that event has gotten tons of business out of that one night, because everyone there was a buyer."

Epton says the best way for caterers to penetrate the market is to find the top DMCs in the marketplace and try to partner with them. To do that, he suggests they assist with proposals to help sell the destination. When an incentive com-pany calls, "typically they are working with a corporate customer to determine the right reward for a service program," he says. "Often they're looking for a bid or proposal, but they're also looking at a few other cities. You have to sell your destination before you sell your company.

"What sets caterers apart is when they understand the market," Epton adds. "The whole reason DMCs are a business is that they're able to recommend and contract a myriad of suppliers to be bundled into one event. There are hundreds of caterers to weed through, and what they're using us for is local business savvy and buying experience."

GET NOTICED "Event planners need to network and be a part of the industry to get noticed," says Kathy Donnell, senior account manager with the Chicago-based incentive company Creative Group. "Get exposure with the catering people at big hotels." Donnell says that the process of selecting an event planner is client-driven, adding that she makes sure the planners can provide ideas that are appropriate to the theme and that fit the client. She often uses Los Angeles-based EventWorks to produce her events.

Janet Elkins, president of EventWorks, adds: "Many smaller incentive houses are getting wise to the fact that it is more prudent to hire event planners directly. Not only are they saving money when they work directly with an event company, but they have an immediate contact to alter the program to meet their needs because there is no middleman. There is also the opportunity to brainstorm with the planner, which means they are apt to get a better product."

Elkins says 30 percent of her events are incentive-based. "It's a market niche in which you are dealing with corporations that are looking for the best. Service is also integral, because your client, in turn, is trying to make sure their client is happy." Elkins adds that she joined SITE to get involved in the industry.

Event planners sometimes wind up competing with a DMC, which may have an event planner on-staff. Says Anthony Napoli, president of Briggs Red Carpet, a New York City-based DMC: "When a client comes to us, they don't have to go anywhere else." He says of his staff, "Our vision is larger. We have the whole program in our heads. Being in the energy center, we can balance the program so it's varied. I like to structure it like a Broadway show with peaks and valleys and intermissions. Fortunately, I have all of New York City as my backdrop and a cast of 8 million to draw on."

Napoli adds that it's hard to break into the incentive market because many incentive companies have established relationships with DMCs. "But just keep knocking on the door. Like an actor, you just have to keep going to auditions."

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