Incentives: Unnecessary luxury or worthwhile investment?

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The year 2009 taught the travel industry the importance of cutting unnecessary costs, where possible, to survive. Companies worldwide resorted to retrenchments, downgrading business travel and, in some cases, putting a hold on teambuilding and travel incentives. Kathy Nel, manager incentive and event management at HRG Rennies Travel, confirms this. “Many incentive trips have been put on hold as companies do not want to be seen to be spending on extravagant incentive trips while also retrenching staff,” she says.

Of those who are still offering incentives, a large portion has reduced the budgets, requiring a fair amount of creativity when it comes to arranging the trips. Sue Marillier, manager of Visions Travel, says: “As an industry we need to be creative in our approach and find alternative methods to incentivise staff.” Marillier explains that companies are thinking local and regional for their incentives. “This is done for cost-saving purposes. Companies are being more discreet with their incentive spend,” she adds. Nel says that while budgets for teambuilding events and incentives have been reduced, incentives are an extremely powerful marketing tool. “The role of incentives becomes even more important during times of economic downturn.”

Emerging trends

Apart from cutting budgets for teambuilding and incentives, Geoff Saner, managing director of Creative Incentives, says there is a clear trend of companies ‘doing it themselves’. He says: “This means a company is not always getting the value they should, as those personnel seldom have the knowledge and expertise of professional incentive consultants, who know how to plan a trip that excites and motivates and is unique, and not bought off the back page of the newspapers’ travel sections.”

Another trend, Nel points out, is that companies are waiting until the last minute to confirm trips, making lead times shorter and shorter. Marillier agrees, saying, “Unfortunately, this doesn’t always work in the client’s favour due to high airfare prices and unfavourable exchange rates.”

Brad Muir, of Burns Cunningham Corporate Travel, says: “The biggest thing that we have noticed is that the recipients of these incentives have been given a lot more leeway to book a trip that they would prefer, and can also involve their family.” Muir adds that more and more recipients are being given vouchers for travel to use as they please. Saner claims that top achievers, in any incentive programme, have often been to most of the popular destinations. “New options are to offer the achievers a personalised, tailored experience for them and their spouses or families,” he adds.

Where to go?

Enid Maullin, sales executive for Beachcomber Tours, says there has been a definite increase in enquiries for incentives toMauritiusfor this year, particularly after the World Cup. “Mauritiusstill compares well and has so much to offer the incentive market, and compares price-wise, as it is in some cases cheaper than local destinations,” she adds.

Maullin says competing destinations includesThailand,Kenya,Argentina,Egypt,Braziland theGreekIslands. “For the South African market,” says Marillier, “MauritiusandZanzibarare still top destinations, particularly those hotels offering all-inclusive packages.” She says Bali andThailandare still in demand, while cruising is an alternative for clients looking for best value and something different. Since direct flights have been introduced intoIstanbul,Turkeyis becoming a desirable destination. “Madagascarand Reunion are both busy with strong marketing initiatives inSouth Africa, but the travel logistics are still challenging in these countries,” adds Marillier.

According to Nel, clients are looking at destinations closer to home that are more cost effective. “Mauritius,Namibia,VicFallsandMozambiquebeing particularly popular,” she mentions. Saner says a top incentive destination is what a person’s perception of a place is, “Give me a local, ‘unimaginative’ venue and I’ll give the conference or incentive group the most memorable time they’ve ever had. It’s all in the itinerary.”

Incentives must stay

Saner says companies that do offer incentives achieve better results than those who don’t. “If a company isn’t achieving what they say they are committed to, then best they check what they are doing to attract and retain top talent,” he adds.

According to Maullin, companies should offer incentives to motivate their team in trying times as it is certainly a reward for hard work. “The incentive market has been extremely sound over the past few years,” she says.

Top 5 destinations

Based on the suggestions from the experts in the incentive industry, Business Traveller has identified the top five incentive destinations according to value-for-money and what they can offer:

1)     Mauritius

2)     South Africa

3)     Zanzibar

4)     Thailand

5)      Dubai

Chana Viljoen