Incentive Industry Forecast 2021

A return to travel, digital gift cards and increased engagement are among the motivation trends for 2021.

Photo Credit: Neirfy for Adobe Stock

As one of the most turbulent and unpredictable years in recent memory comes to a close, Incentive taps industry leaders and the latest research to forecast what 2021 will look like.

(Gradual) Return to Travel

Jenn-Glynn-Meeting Encore
Jenn Glynn, CIS, CITP, managing partner of Meeting Encore and president of the Society for Incentive Travel Excellence

"At the start of lockdown, we saw a lot of corporations postponing, but not cancelling, their 2020 incentive travel programs," says Jenn Glynn, CIS, CITP, managing partner of Meeting Encore and president of the Society for Incentive Travel Excellence. "Fast forward eight months and many have had to make hard decisions on their programs. Do they postpone from early 2021 to later in the year, or move it to 2022? Or do they award qualifiers in different ways?"

This uncertain time line is evident in the soon-to-be-released Incentive Travel Industry Index, a collaborative study undertaken each year by SITE, the Incentive Research Foundation and the Financial & Insurance Conference Professionals. A sneak peek at the index reveals some recovery in 2021 and more in 2022; however, it's not until 2023 that most respondents think the numbers will be back to 2019 levels. The study, which queried 2,700 incentive professionals, also shows that optimistic U.S. incentive professionals expect incentive travel to return sooner than their counterparts around the world. 

Of course, the return-to-travel timeline depends heavily on the forces in place to mitigate Covid-19. Huw Tuckett, CITP, executive director of the global DMC consortium Euromic, thinks the industry will bounce back in 2021, "but only when confidence returns that it can be done safely." That means a vaccine and widely available rapid testing for the coronavirus, the resumption of safe air travel and a reduction in the number of infections.

Despite the unknowns, Glynn is confident that the pent-up desire to travel will stimulate a rebound. "The power of travel as a reward and motivation tool will increase," she says, "and a boom is predicted."

Barb Ward, CIS, CITP, vice president of travel and events at One10 Marketing
Barb Ward, CIS, CITP, vice president of travel and events at One10 Marketing

Barb Ward, CIS, CITP, vice president of travel and events at One10 Marketing, agrees. "Humans always have and always will have a desire to connect face-to-face," she says. "This need for social connectivity hasn't been lost during the pandemic but has instead been strengthened. It just looks a little different right now." She feels the new safety and cleanliness protocols, and destination-specific safety mandates, will have long-lasting, positive impacts on incentive programs. 

Loss of Talent

Another issue facing the incentive world is the "brain drain" caused by professionals who are taking their talent, know-how and resources away from the industry.

"Some of the wonderful young leaders who've joined our industry in recent years will be lost to sectors actively hiring now, like IT and pharma," says Glynn. "At the same time, many long-established companies that are dedicated to incentive travel may not recover or may have to change their business models."

To see how some firms are shifting their focus, see "The DMC Dilemma."

North America Now

Mexico's Fiesta Americana Condesa Cancún hosted a Destinations Inc. incentive program in July.
Mexico's Fiesta Americana Condesa Cancún hosted a Destinations Inc. incentive program in July.

Programs scheduled for next year are likely to be held in the U.S. or within North America, according to both Incentive's Pulse Survey and the index's preliminary findings. The two studies note that Mexico and the Caribbean are also in planners' sights for next year. In addition to their proximity to the U.S., a strong part of their appeal, cited by planners at Northstar's Destination Mexico + Caribbean event, are the destinations' health and safety protocols.

Rick Lambert, president and CEO of Destinations Inc.

Rick Lambert, president and CEO of Destinations Inc., organized a program for 160 attendees at Fiesta Americana Condesa Cancún in July. He described the successful program's extensive health and safety protocols, which have given him — and other clients — the confidence to return to Mexico and the Dominican Republic in the fourth quarter of 2020.

Another panelist, Matthew Thiel, sales director for meetings, incentives and group travel at Fox World Travel, pointed out, "Mexico got a head start on all of this. Back at the end of May, they announced they were going to be open, that they were going to be working with the World Travel and Tourism Council to get clean stamps of approval. They have done it right." 

Gift Cards Go Digital

With fewer people visiting restaurants and retail stores, it's no surprise that online purchases of digital gift cards have increased. 

"They do not require a visit to a physical location to purchase and are easy to send to someone else," says Len Sadek, CPIM, director of gift card sales and marketing for Landry's, and president of the Incentive Marketing Association board. "More companies are sending digital gift cards as a thank you and appreciation to their employees working from home. We also see more gift cards used as recognition for those on the front lines." 

Rise of Individual Travel

While the return of incentive travel will thrill most participants who have earned their trips, some winners are skipping the group event. To reward these employees or channel sellers who went above and beyond for the company, organizers like Lambert offer individual travel packages. These alternative rewards, typically for the winner and a guest, include hotel and airfare and can be used whenever winners are ready to travel. 

More Merchandise

Mike Donnelly, CPIM, president of Hinda Incentives

While Covid-19 curtailed travel, it has had the opposite effect on merchandise and gift cards, says Mike Donnelly, CPIM, president of Hinda Incentives. As Incentives' Pulse Survey and a soon-to-be-released IRF study reveal, the trend is expected to continue as planners offer alternatives to travel rewards. 

While this is good news for incentive firms like Hinda that specialize in nontravel rewards, Donnelly says a weakness has been uncovered on the merchandise side: the difficulty incentive houses are having to obtain and deliver the rewards in a timely fashion. 

"The pandemic has caused everyone in this industry to look more closely at our supply chains and become much more adaptive and flexible as we look at our awards mix and our ability to service both our clients and their participants," he says. 

Rewards such as housewares, food items and laptops, as well as home-entertainment items such as televisions have been popular this year. Donnelly expects that trend to continue in the near future. 

New Rules for Employee Recognition and Engagement

Gary Beckstrand, vice president at recognition firm O.C. Tanner

"The pandemic has reminded us of the importance of our people. Now, more than ever, they need to feel our gratitude — that they are valued," says Gary Beckstrand, vice president at recognition firm O.C. Tanner. He foresees a movement to do a better job connecting incentive awards to the person who does the work, and making the rewards into more meaningful experiences. 

O.C. Tanner's research reveals that when employees were not recognized during the pandemic, there was a 20 percent increase in their intention to leave their companies and a 49 percent decrease in engagement. "Organizations will need to rethink their approaches to recognition to find ways to integrate their… often outdated or stale programs and make them an integral part of their workplace cultures," adds Beckstrand.

They will also need to improve inclusion in the workplace, he says. "The window of social change is open and those companies that make progress will be the winners."

Home-based workforces are also ripe for increased and improved incentive programs, notes Donnelly. "The pandemic accelerated a remote-worker trend we had seen for years," he says. "Companies will see real advantages in continuing to allow employees to work remotely. But they will need more and more help engaging these people and that spells opportunities for more employee engagement and recognition programs."