Follow Up on Incentive Industry Information

A couple of my recent posts focused on incentive industry trends and the impact that the economy will have on clients and their decision to conduct programs.

First, I highlighted a recent "Pulse" survey from the Incentive Research Foundation and then posted on the negative impact that incentive trips may have on companies that are cutting costs yet taking award earners to top-tier group travel destinations.

The Incentive Research Foundation just released another "Pulse" survey that hits on these points exactly.

What I found interesting is the change in attitudes relating to incentive spend within a short 1-month span between surveys.

The image of the comparison (click on image for larger version) shows some of the changes between the September Survey and the October Survey.

 I tried to highlight what I thought were some interesting changes. 

In general - while a big percentage leap, but a small absolute increase - the idea that a down economy would have a positive affect on a companies ability to plan and incentive travel program was interesting.  It might be that the survey takers were saying that there was an increased need in a down economy to have an incentive or that they felt the down economy gave companies more leverage with hotels and destinations.  In either case they're probably right.

There is a decided shift in the responses to companies changing programs due to the economy.  Dropping room nights, reducing the number of qualifiers - all to cut the budget a little bit.  Dropping down the list the respondents show that they are cutting almost everything in their programs except the awards budget.  Here's a Incentive Intelligence tip - cut the award but not the other stuff! 

Too often companies cut back on the things that cost the least but have the most impact.  Reducing the award budget by 5% will have a much larger effect on the overall budget but have a much smaller effect on the entire program.  However, cutting communications and management costs will decrease performance and give you little real budget relief.  Trust me on this one.

It's Official

Finally - my post the other day on the AIG program that got so much play in the press has come to pass.  Companies are way more influenced by perception of lavish spending on trips than they were in September.  You can say you heard it here first folks.

Cut But Don't Amputate

All in all it look like the industry is going to see a bit of a contraction.  I sincerely hope the companies that utilize incentives and recognition to influence their employees and distribution channel partners don't cut too close to the bone however.  Once you lose a connection it is much, much more difficult to get it back.  You're better off keeping the connection alive - even at a lower level - than completely severing ties to those you rely on for growth and future business.  I'm just sayin'.