8 Incentive Trends for 2023

Here's how current events are reshaping the purpose and process of rewarding winners.

Attendees need more downtime during incentive trips, according to the IRF's 2023 Trends Report. Photo Credit: GVS for Adobe Stock

Workforce changes, new priorities and rising costs are among forces driving incentive travel trends in 2023 and beyond. Following are eight current trends that are influencing programs, gleaned from the latest findings from the Incentive Research Foundation; Northstar/Cvent, and the Incentive Travel Index.

1. Incentive travel is booming 

By all indicators, incentive travel is not just back on track; it’s well on the way to reaching prepandemic levels. Three times as many planners were actively booking new programs in Q4 2022, compared with Q4 2021, according to the latest Northstar/Cvent Incentive PULSE Survey.

U.S. destinations — including South Florida, Southern California, Northern California and Hawaii — continue to be popular spots for programs. Outside the country, the Caribbean and Mexico remain strong, while Europe and Canada — both desirable destinations prior to the pandemic — are seeing their incentive travel bookings grow. (For more on hot places to consider, see Top Incentive Travel Destinations for 2023). 

2. Programs have new purpose

Incentive programs are an increasingly critical business strategy to help organizations attract, retain and build culture across in-office and remote workers, according to the IRF 2023 Trends Report

As a result, the so-called “soft power” of incentive programs has been elevated. Program goals no longer are focused solely on driving sales. Companies are using trips to bring far-flung teams together; foster relationships; inspire loyalty; and attract, engage and retain employees.

3. Experience defines luxury 

Today’s program participants have high expectations of incentive trips. They are motivated by exciting, exclusive, experiential, authentic and memorable programs. In fact, experience is considered the new luxury on programs — more than five-star accommodations — and is a top driver of destination choice, according to the IRF. 

Activities such private access to normally crowded venues, exclusive guided tours, behind-the-scenes visits to popular venues and meals in unexpected places are treasured by participants. 

4. Downtime is in demand

While winners want more experiences and authenticity in their programs, they also desire more chances for relaxation and unscheduled time, as noted in the IRF’s Incentive Expectations and Reality in the Hospitality Industry study. 

Nowadays, attendees expect blocks of time to recharge or catch up with work, as well as the option to enjoy individual vs. group activities. They also crave more choices — e.g., between several activities and dining options — during trips.

5. Inflation is taking a toll 

Not surprisingly, rising costs are forcing incentive planners to make changes to their travel programs. Inflation is a top concern as incentive travel professionals look to the future, Northstar’s research revealed. “Budgets are down but client expectations are not,” noted one Incentive PULSE Survey respondent.

To stretch dollars and deliver memorable and motivational events, some planners are cutting back on the number of winners and reducing on-site gifting.

6. Service is a sore point

Planners who were once accepting of suppliers’ Covid-related staffing and service issues are increasingly losing their patience. Now, program hosts expect services to be delivered at pre-Covid levels, especially when costs are higher than they were prior to the pandemic. 

Another big complaint from incentive buyers — voiced in research and in discussions at industry events — is the need for speedier responses to requests for proposals. According to IRF research, only half of hotels responded to RFPs within a day or two. In addition, most planners want responses from DMCs within a few days, but fewer than half of DMCs said they could meet that goal. 

7. Sustainability is more of a priority 

Nearly 80 percent of respondents to an IRF survey said they were getting some pressure from clients to provide more sustainable options for events and for transportation.

While the rest of the world is adopting green practices for their programs, North American incentive stakeholders are lagging behind. Lowering the carbon footprint of programs is increasingly important for 48 percent of non-North American respondents, compared with 34 percent of those in North America, according to the Incentive Travel Index.  And the environmental sustainability of travel to the destination was a consideration for 32 percent of North American respondents, compared with 40 percent of the rest of the world. 

Cost is cited as the greatest barrier to sustainable programs. According to the IRF, when sustainability is a concern, leadership and clients might decide against green practices if extra costs are involved.

8. Cash is being used to pay bills 

As household incomes get stretched, recipients tend to use cash rewards to pay for everyday expenses, diminishing their perception of being rewarded. This elevates the perceived worth of gift cards and merchandise as rewards, making them more desirable than cash to the winners, according to an IRF survey.