2008 Incentive Travel IQ
October 06, 2008
The economy takes a toll on incentive travel, and so do airlines' woes
By Leo Jakobson
"The economy hasn't affected our travel programs because they were done early this year," says Lise Nunziato, who works in support services for Park Ridge, N.J.-based Hertz Corporation. But, she adds, that's because the five incentive trips she planned for top salespeople from the company's various divisions, including car rental, equipment rental and claim management, all took place earlier than usual this year. "We're just starting to look at next year," Nunziato says. "Will it affect those programs? Probably. Four months ago it was a good probability we were going to go to Europe [in 2009]. We are still pricing it, but now we probably won't." Instead, destinations like Napa Valley, Calif., and Colorado Springs, Colo., are under consideration, she says.
That makes Nunziato, who participated in the Travel IQ survey, typical of the respondents. We asked: "How is the combination of a weak dollar and strong foreign currencies such as the euro affecting your choice of incentive travel destinations?" Nearly half of the respondents said they planned to stay domestic, the most common answer. Less than one third replied no changes were forthcoming, while one fifth are considering all-inclusive resorts or cruising (nearly 30 percent of the Travel IQ respondents say they use cruising at least every three years). Sixteen percent are cutting the per-attendee budget, and 8.4 percent are cutting the number of qualifiers.
The last two choices don't appeal to Nunziato, whose programs vary in size from 20 to 30 participants to between 500 and 700. "I'd say hold off on a program if you can't do it right," she says. Another major factor in choosing a destination for Hertz is on-site golf, she says. "We are still very mainstream golf-oriented. Spa is second." As are our survey respondents: 70 percent rated golf and spa "extremely important" or "very important" in selecting a destination, while just 14 percent placed them in the two lowest categories.
And then we come to flying. "Airlift will be a major, major issue in all of our programs going forward," says Margaret Jamison, manager of corporate events for IKON Office Solutions in Malvern, Penn., and a Travel IQ survey respondent. Even though she had contracted with a major airline to buy seats well in advance of a trip to St. Kitts early this year, many problems arose. Despite the contract, one of the flights her sales winners were booked on was canceled and passengers were rebooked onto the next flight—which was already full. "It was no longer, 'When we get there will they have fun?'" she says. "The question was, 'Are they going to get there?' We had people come in a day early and paid for the extra room nights. We put people into Nevis and boated them in. And we still had a couple of people who did not get in for two days—thank goodness it was a six-day program."
When asked how the growing difficulty of air travel had affected destination choices, more than one-third of our respondents said they look for destinations with no more than one transfer for all participants, and nearly as many said they try to stay closer to home or are not considering long-haul destinations at all. In a separate question, nearly three-fifths of respondents said the airline industry's changes are having a "moderate" or "significant" impact on their programs.
Jamison thought she had solved that problem for the current program, bringing 1,000 people to Cancun in a trio of four-day, back-to-back programs in early 2009. "We thought Cancun would be easy. But the airlines are flying smaller planes, so they fill up faster and the prices are higher. How do we budget when we book hotels a year and a half out?" What really sets her off are charges for a second—and even for a first—checked bag, lower acceptable bag weights and $2 sodas. "The nickel and diming is so frustrating," she says.
Editor's Note: Download the research summary and the full results at www.incentivemag.com.
Send comments to ljakobson@incentivemag.com.
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