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The COVID-19 pandemic has taken a major toll on incentive travel. Many top performers who went above and beyond to achieve a dream trip will have to wait months for their travel reward to come to fruition; some will receive an alternate prize instead. For incentive professionals planning new programs, many challenges await. Incentive’s survey of 181 industry professionals, conducted in June, looks at the current state of incentive travel programs, as well as what lies ahead.
Postponement vs. Cancellation
Our research reveals that nearly three quarters of programs (73 percent) that were scheduled to take place in 2020 were postponed, while nearly a quarter were outright cancelled. Just 3 percent of those polled said there was no change to the timing of their trips.
Of the postponed trips, 18 percent were rescheduled for the second half of 2020. The majority (31 percent) have been shifted to the first half of 2021, while 19 percent have been moved to the second half of next year. Five percent were pushed ahead even farther, now slated to take place in 2022.
More than half of the rescheduled programs (52 percent) will be arranged using smaller budgets than they were allotted originally. To make up for the shortfall, 19 percent of those polled said they are cutting back on activities and gifts. Another 17 percent will spend less on entertainment, while 9 percent will trim their food-and-beverage costs.
Accommodation and amenity budgets will take smaller hits, with less than 10 percent of the respondents citing cuts to each of those trip components.
How have your incentive travel programs scheduled for 2020 been affected by COVID-19?
| Postponed until first half of 2021|| 31%|
| Cancelled|| 24%|
| Postponed until second half of 2021|| 19%|
| Postponed to second half of 2020 || 18%|
| Postponed until 2022|| 5%|
| No change to program || 3%|
Are you currently planning future programs?
| Sourcing and booking future business || 39% |
| Researching for future programs but not booking || 39%|
| Not planning, but staying in touch with destination and venue partners || 15%|
| Not planning and not staying in contact at this point || 7%|
For travel programs that were cancelled, organizers reported they have opted to recompense winners with rewards, such as cash (12 percent); gift cards (10 percent); merchandise (9 percent), and individual-travel rewards that can be used in the future (9 percent). Other alternate rewards cited by respondents were:
- Company stock;
- Automatic inclusion in the company’s next incentive trip;
- Increased bonuses;
- Hotel reward points and allowing winners to use their original tickets for personal travel;
- The use of a point system through the company’s software platform, which will let winners redeem their accumulated points for individual travel, merchandise or gift cards;
- Customized boxes with gifts, recognition booklets and video “postcards” with messages from company leaders;
- A virtual gala and gifting program; and
- A combination of prepaid Visa cards, merchandise and a virtual awards ceremony.
Despite 2020 program disruptions, continued virus outbreaks and public wariness about travel, there is positive news for future programs: 39 percent of the incentive professionals polled reported that they are currently sourcing and booking future programs, while another 39 percent, though not ready to sign contracts, are researching for future trips. Fifteen percent of the respondents said they are not actively planning their next trips, but they are staying in touch with suppliers, while 7 percent are not planning or actively staying in contact with their travel partners at this point.
Ten percent of new incentive programs have been scheduled for this year, according to our findings. Most are slated for 2021, with 33 percent to be held in the first quarter, 22 percent in the second quarter, 11 percent in the third quarter and 4 percent in the fourth quarter. Another 20 percent of incentive trips are being booked for 2022 or beyond.
When is the earliest you are scheduling new incentive programs?
| Prior to September 2020 || 2% |
| September to year-end 2020|| 8% |
| Q1 2021 || 33%|
| Q2 2021 || 22% |
| Q3 2021 || 11% |
| Q4 2021 || 4% |
| 2022 and later || 20% |
The devastating personnel cuts and furloughs that plague the travel industry are presenting challenges for incentive organizers. More than half of the respondents said it has been more difficult than usual to reach suppliers such as hotels, destination management companies and tourism boards, all key components for planning incentive travel.
Respondents expect contract terms to be more favorable for their new programs. Nearly half predicted cancellation terms will be more forgiving and 30 percent anticipated that new contracts would allow for cancellation without penalty.
What are your expectations regarding cancellation clauses?
| Cancellation terms will be more forgiving || 48% |
| Contracts will allow for cancellation without penalty|| 30% |
| Terms will be even more stringent || 15%|
| No changes expected|| 7%|
Going forward, incentive programs will place a greater emphasis on health and safety measures. One of the biggest changes, which will be undertaken by nearly a quarter of those polled, will be the reduction in the size of groups. More than 20 percent will have new seating plans and networking areas outlined to encourage physical distancing, and will put into place social-responsibility best practices, including protocols for attendees who are ill. Less than 10 percent of those polled said their programs will provide temperature screenings or include an on-site health professional.
Are you considering any of the following health and safety measures in the planning of future programs?
| Reducing group size || 24% |
| Developing seating plans and networking areas to encourage physical distancing|| 23%|
| Using social-responsibility best practices, including protocols for attendees who are ill|| 21%|
| Providing signage regarding prevention and control measures (shaking hands, washing hands, etc.) || 9%|
| Providing temperature/health screening || 5% |
| Having a health professional on-site|| 3% |
| Other || 15% |
In comments regarding health and safety, one respondent wrote that their company would not have events until there is an effective vaccine for the coronavirus, while another stated that planning for their next program hasn’t started, “but once we plan, hopefully COVID-19 will be a thing of the past.”