The immense challenges and pressures incentive professionals face today were the focus of our annual roundtable, which took place last month during Northstar Meetings Group’s Incentive Live Digital 2020 event. This year’s version was conducted in a unique “deconstructed” digital format: Six thought leaders each gave brief talks on a single topic or area of the incentive industry, including motivation in a crisis, gifting and gift-card challenges, legal issues, program budgets, and supplier relations.
Afterward, these luminaries hosted deep-dive sessions with further insights and advice on their areas of expertise. Following are the highlights and key takeaways from their sessions.
Hotelier/Planner Relationships and Attrition
Kevin Edmunds believes relationships are key to navigating the pandemic for incentive professionals from both sides of the aisle. “People are going to remember the good and the bad from this, in terms of those relationships, when we get through this. And when we’re on the brighter side, people are going to remember what it was like to work with you, whether it’s your hotels or your group and you. I feel like, as long as you keep that idea at the forefront, we can work together and find a common ground.”
These relationships, Edmunds said, are also crucial to fair contracts and negotiations at this delicate time. “We could plan something today and then have to redo it tomorrow,” he said. “We’re going to see so many contracts and clauses that will need to be redone because of what’s happening and changing by the second. Rely on your relationships and make sure you come to the table with options.”
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Edmunds also urged planners to be transparent, open and honest in their dealings with suppliers. “Don’t try to win the upper hand. That’s just all wasted negotiation time. Wear your heart on your sleeve and just move forward and try to push the business; make it happen, but don’t try to screw anybody because when that happens, it’s going to be the end. And the end is going to be bad for everybody.”
Regarding attrition for incentive groups that have postponed trips to his properties, Edmunds says, “Let’s say we’re pushing your event to 2021. We really look at your attrition and say let’s get super creative. You might drop 20 percent; you might drop 50 percent. Whatever it is, we’d like to realign the attrition to something more realistic. The hotels won’t be full — let’s be honest. So, if you had a group of 100, maybe you don’t hold 100 rooms anymore. Maybe you hold 80, and if you need to grow your rooms, hotels will always let you grow.”
Collecting attrition penalties but allowing groups to use that as a deposit for a future booking is another practice Edmunds endorses. “What we did with a lot of groups, for any attrition that has come up, we’ve collected that money. Now, some people like this or don’t like it. We’ve collected that money and basically said, here’s a credit for you to use for a future group, and depending on the group and what they do and where they travel to, they can repeat year over year at the same property, or they can repeat in the collection at different locations, and use that as a deposit for a future group within a year or two.”
The major effect the pandemic has had on the gift-card industry, Johnson notes, is the switch from physical cards to digital cards. As more and more employees started to work from home, these rewards allowed firms to deliver quick awards that didn’t have to be handled physically.
“Often you hear that gift cards don’t seem to be a personalized gift, but I think people’s minds are shifting. And especially during this time when we’re emphasizing micro-gifting — sending smaller-denomination cards — there’s an experience attached to that gift card. Giving a gift card that’s specific to a brand that you know a person loves is a thoughtful way of letting them know that you know them, and you understand what’s important to them.”
“Personalization is increasing for both digital and plastic cards. You can upload your photo to a plastic or digital card to personalize it. Other options allow for co-branding, which lets the sponsor include their own branding on the card, so clients remember who you are as well as who [the card brand] is.”
Motivation During a Crisis
“Humans’ deepest drives don’t change just because there is a crisis. Our whole industry and the programs that we are known for were born in a time of crisis [the Great Depression],” explained Van Dyke during her opening talk.
“We have four continuous, compounding and somewhat insatiable drives. They are the drive to acquire, to bond, to create and learn, and to defend. So, whether it’s helping our employees, and channel and sales partners acquire goods and services; bond with their colleagues, their friends or their family; helping them create new skills, new products and information on how to use them; or helping them defend their very deeply held beliefs that they’ve chosen the right place to work, that they like their job, or they are safe in the current environment, is what’s going to continue to motivate them in the Covid environment and other crises.”
Safety, Risks and Waivers
“Since incentive travel involves a great deal of exposure — airport, hotel, etc. — many winners are rightfully concerned about whether an incentive trip is worth the health risk and the risk of exposure to loved ones back home. The emotional, safety and health aspect, and the economic aspect are all present in the decisions we are making,” said Howe during his deep-dive session. “While we strived to give people once-in-a-lifetime experiences in the past, we currently aim to ensure safety.”
Howe addressed the liability implications of participants catching Covid at a property or venue, as well as planners’ liability. “It will be difficult to prove a venue is responsible for the virus, though if a property doesn’t follow best practices or due care, or has a mass breakout, then a lawsuit could take place.”
He continued, “Convincing a jury is a different case, since a trip from beginning to end results in a lot of exposure that is hard to pinpoint to a property. There’s a lot of proof problems but you can still face the prospect of being sued. The difficulty now is, can you buy insurance that covers that risk on top, to provide you with a defense against a plaintiff. Insurance brokers have said it’s a difficult policy to find going forward, especially from the standpoint of cancellation or business interruption. If you do find it, it’ll be awfully expensive. As for personal liability of someone coming down with the disease: maybe.
“Unpredictable times call for more creative approaches to incentive merchandise. We have to not just think outside the box, but outside the giftbox,” said Brenner during his breakout session.
One example, he said, is by offering gifts that reflect recipients’ lifestyles now. “People are cooking, they’re cycling, they’re into family-driven toys and games, they may be taking individual trips that are more ‘motocations’ to nearby cities vs. large events.”
When determining the best rewards to offer now, Brenner recommended that planners “research and look at each one. But at the end of the day, the most important consideration is how it makes the winner feel. Ask yourself what process they went through to get that merchandise and whether the merchandise really fits their new life.”
Another shift Brenner noted is in how merchandise rewards are presented to participants.
In-person gifting has been a key element of merchandise incentive programs, he said, but now we have to pivot a little bit to accommodate hybrid program and virtual programs (e.g., sending gifts directly to winners’ homes).
With the expected rise in smaller, regional events, Brenner sees opportunities for tailored, on-site gifting suites for these programs. He concluded that overall, incentive planners will continue to have plenty of ways to incorporate merchandise into their motivational events, in whatever form those events take.
New Budget Considerations
May shed light on the additional costs the pandemic has brought on incentive travel programs. Third-party fees are one major area. “I think that corporate customers envision that making changes to incentive trips is about as simple as calling up the airline and Marriott to move their family vacation. But for an incentive trip, we’re moving a block of 100 rooms. We’re moving flights, ground transportation, activities, dinners and special events. So right now, the costs are more on the planning side. Just because the pool deck was where we were going to have the welcome reception doesn’t mean the pool deck is still going to be available six months from now, or the seasonal menus that were going to be available in the spring might not be the seasonal menus that are available in the fall. We’re going to have to go through choosing menus again.”
To cover that extra work, May’s firm charges a replanning fee for these elements. “At first, there’s a little bit of client resistance because they think, ‘Hey, we’re unable to operate the program. Why are you trying to force us to pay you a fee when the hotel isn’t charging anything?’ We had to educate our clients that the hotel doesn’t really start incurring costs until the day you show up, whereas a third-party company like Brightspot has been working on this event for a year. Our labor on their behalf has already occurred. And I think when they hear that, they understand.”
The need for more on-site staff — roughly 25 percent more— will also elevate program costs. ”There’s going to be more work to set up rooms, ensure that cleaning procedures are in place and monitor social distancing.”
Susmita Baral, Michael Ardizzone, Lesley Krautheim, Alex Palmer and Michael J. Shapiro contributed to this article.