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Incentive Travel Industry Index 2019: Performance, Prospects, and Trends

A comprehensive survey conducted by FICP, IRF, and SITE in partnership with Oxford Economics, revealing the latest trends, growth rates, and insights in the incentive travel industry.

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Incentive Travel Industry Index 2019: Performance, Prospects, and Trends

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  1. Powered by SITE Index, IRF Outlook and FICPIn association with Oxford Economics Preliminary 2019 survey results September 2019 Incentive Travel Industry Index

  2. SETTING THE SCENE …

  3. Moderator & Panelists • Adam Sacks, President, Tourism Economics, an Oxford Economics company • Allison Cooper, Vice President, Conference Experiences at LPL Financial • Bob MillerPresident & CEO at One10 • Selina Sinclair, CMP, SMM, CITP, Global Managing Director, Pacific World • Soma Kim, Account Director, Incentive Sales at Four Seasons Hotels and Resorts Oxford Economics

  4. Go to Slido.com #ITII19 INTRODUCING SLIDO

  5. #ITII19 @FICP @SITEGlobal @theIRForg SOCIAL MEDIA

  6. The wider context Introduction

  7. The growing challenge of compensation Wage growth above 3% for 12th consecutive month Oxford Economics

  8. …and the downside of a tight labor market (for employers) Oxford Economics

  9. Meanwhile, the US and global economies are slowing • Eurozone in slow motion • Germany contracting • Brazil in recession • Mexico stalled • China and India slowing

  10. …and business confidence has fallen back to reality

  11. A survey to understand incentive travel: performance and prospects • Joint initiative • Financial & Insurance Conference Professionals (FICP), Incentive Research Foundation (IRF) and Society for Incentive Travel Excellence (SITE) • Historical snapshot and predictive hypothesis • Background • Fifth year the survey is being conducted • First year of a three-year partnership with Oxford Economics • 2,637 total survey respondents (1,306 completed) • 29% increase from prior survey • 100+ countries represented Online / mobile survey (July to August 2019) • Buyers • Incentive travel end-user • Incentive travel agency • Sellers • Destination management companies (DMC) • Suppliers (hotels, cruise lines, venues) • Destination marketing organizations (DMOs) Oxford Economics

  12. AVERAGE SPEND on Incentive Travel

  13. Average spend per person has been stable at approximately $4,000 (buyers) Buyers report a typical program budget of $4,000 per person, in aggregate Sellers of individual components (e.g., hotel portion) report typical revenue of $1,900 per person Note: Seller spend responses are specific to the role and not directly comparable to the buyer responses. Suppliers (e.g. hoteliers) and destination management companies reported amounts billed directly by their company. Destination marketing organizations reported spend in the destination (e.g. hotel, F&B, ground transportation). Source: Data for 2015 to 2018 is based on prior editions of the Incentive Travel Industry Index. Response: Buyers n=1,195; sellers n=1,442 Oxford Economics

  14. Average spend per person by region (buyers) North America $4,508 EMEA $2,500 Asia Pacific $3,453 South America/ Caribbean $4,500 Oxford Economics

  15. REPORTED GROWTH RATES

  16. Both buyers and sellers anticipate program budgets to increase through 2022 G3 and G4: How has the number of people (qualifiers, guests and other participants) and spending per person (total program cost divided by number of people, including qualifiers and guests in the count of people) in your team’s incentive travel programs changed recently? G7 for sellers. Response base: Buyers n=1,195; sellers n=1,442 Oxford Economics

  17. Expectations of budget growth reflect increased numbers of people, and increased spending per person (buyers) Oxford Economics

  18. Reported budget growth in 2020, by region (buyers) North America +5.2% EMEA +1.9% Asia Pacific +3.2% South America/ Caribbean +3.5% 19 Oxford Economics Oxford Economics

  19. THE FIGURES & WHAT THEY REVEAL

  20. SOFT POWER BEATS HARD DOLLARS 67%

  21. Stronger focus on soft power is boosting the role of incentive travel Soft-power Four of the six top benefits relate to soft power rather than hard dollars. Oxford Economics

  22. Senior management considers not just ROI, but also soft-power effects Important to demonstrate impacts beyond ROI Oxford Economics

  23. Important impacts to workplace relations and company culture are valued Soft-power Oxford Economics

  24. Stronger focus on soft power is boosting the role of incentive travel Senior management considers not just ROI, but also soft-power effects Important impacts to workplace relations and company culture are valued IS SOFT POWER REALLY more important than HARD DOLLARS?

  25. SPENDING UP BUT MAINLY DUE TO HOTEL RELATED SPEND $4,508

  26. Cost factors and discretionary improvements are driving increased spend Increased cost for same quality Discretionary improvements Discretionary reductions Oxford Economics

  27. Sellers compete by delivering a “one of a kind” experience One of a kind Oxford Economics

  28. Suppliers strive to distinguish through service quality and creativity Service quality and creativity Oxford Economics

  29. WHERE ON EARTH ARE WE GOING WITH INCENTIVE TRAVEL? 195

  30. North American buyers showing interest in less-frequently used destinations Note strong future interest relative to current use Oxford Economics

  31. TO BE OR NOT TO BE A DMC? 9

  32. DMC’s anticipate trend toward disintermediation will continue disintermediation 54% 45% DMC’s current share ofdestination spendingin 2019 DMC’s anticipated share of destination spendingin five years What percentage of the overall spend per person in the destination (transportation, hotel, off-site functions) do you estimate is channeled through a DMC currently (2019)? How much will be channeled through a DMC in five years?Response base: DMC's, n=546 Oxford Economics

  33. LOOKING INTO THE CRYSTAL BALL 17

  34. Wellness and sustainability will gain prevalence, golf will recede further Oxford Economics

  35. SUMMARY and CONCLUSION

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