The outlook for incentive travel continues to darken for 2020, with the rate of cancellations now at 42.5 percent, but the industry should start to rebound in the second quarter of 2021. The findings come from a study released this month by the Incentive Research Foundation, a follow-up to its April study.
“Although incentive travel has been postponed, employee motivation and recognition continue to be critically important during these challenging times,” said Stephanie Harris, IRF president. “Incentive program owners are shifting their 2020 strategies to focus on virtual recognition events and providing alternate awards--planning a return to incentive travel in 2021.”
Key findings in “COVID-19’s Impact on the Incentive Travel Industry” include:
- The rate of cancellations for incentive travel programs in 2020 is 42.5 percent (compared with 25 percent reported in April)
- The second quarter of 2021 is the soonest incentive trips will be held for most program sizes
- Of those who postponed their incentive travel reward, 79 percent noted that there had been no change to their budget, an increase of 9 percent over the April findings
- Among those cancelling their programs, 78 percent were providing alternative awards, including points, gift cards, merchandise, and individual travel options
- Attendee sentiment (e.g., willingness to travel) was the leading decision factor for moving forward with operating an incentive travel program
The most recent study asked respondents to think across all the incentive travel programs they manage and indicate the soonest they are planning to host groups of various sizes. As expected, program size is a major driver of timing.
The second quarter of 2021 led the responses as the soonest incentive trips will be held for most program sizes. The fourth quarter of 2020 may see small programs (fewer than 50 participants) taking place, with 27 percent indicating they were planning programs during that time frame. Very large groups of 1,000-plus are primarily indicated for Q3 or Q4 of 2021.
CONFIDENCE IS KING IRF asked respondents to indicate the leading decision factors for moving forward with operating an incentive travel program. “Attendee sentiment" was the leading driver, indicated by 80 percent of respondents. Confidence in the health and safety of the destination property, along with policies including arrival or return quarantines and company travel policies were also high on the list of decision factors.
Confidence in the health and safety policies of airlines was indicated as a leading factor by 55 percent of respondents, 20 percent fewer than those driven by the policies of the destination property.
While health and safety are leading conversations at the moment, incentive professionals continue to keep their eye on designing and delivering an exceptional experience. In comments, respondents indicated the ability to deliver on the experience will also influence the decision to move forward with programs. Balancing the reality of what needs to be done to ensure attendees’ health and meet safety standards with the desire for an inspiring group experience can present challenges, but creative solutions abound and are already being both discussed and put to the test.
Download the report here.