The six major trends determining the future of incentive travel

Incentive travel remains an effective way to motivate employees and foster a positive company culture. According to research by Marije Breuker, its role is changing among clients and incentive agencies.

As the owner of incentive agency Motivation Travel and former chairperson of the SITE Nederland trade association, I saw many projects cancelled due to the health crisis, like many others in the events industry. I chose to use my newly freed-up time to gain new insights. I enrolled in the Master’s degree in Strategic Event Management at the Breda University of Applied Sciences (BUas) in Breda, where I devoted my thesis research to a large-scale study of developments in the incentive market.

The first part was comprehensive research into the latest trends and regulations in the incentive industry based on a literature study and conversations with involved professionals. Then I set up an elaborate customer survey with Nico Meyer from Qmatters.

The effectiveness of incentive travel as a tool to motivate employees and its relationship with future business strategies is the focus of this survey. The research examines how company decision-makers perceive incentive travel using surveys, interviews, focus groups, and observations. It also showed how the incentive market can respond to emerging market trends and challenges.

Popular tool

Incentive travel remains a popular tool to motivate employees, strengthen teams and promote company culture. The survey shows that 73 percent of respondents use incentive travel to increase employee engagement, while 63 percent value team building.

Companies also acknowledge their role in employee retention and the war for talent (38 percent), as well as strengthening company culture (55 percent). They value incentive travel for the immediate rewards as well as because of the long-term effects on employee engagement and satisfaction.

Incentive trips, as a psychological reward, promote loyalty and performance, which aligns with the company goal of increasing motivation and retention.

 

Companies are increasingly turning to incentive travel to promote their business strategy and core values

 

Market shifts and challenges

The research identifies six major trends that will influence the future of incentive travel:

1. Sustainability: Increasing emphasis on environmentally friendly and socially responsible choices for an incentive trip, such as a green hotel.
2. Legislation: The work-related costs scheme (werkkostenregeling, WKR) threatens incentive travel because it limits the fiscal room for businesses and increases the costs of such rewards. This dissuades businesses from investing in incentive programmes, which can ultimately affect employee motivation and appreciation.
3. Value creation: Companies are increasingly turning to incentive travel to promote their business strategy and core values. The incentive trip then becomes not just a reward but a powerful instrument to convey the company’s identity and involve employees in the long-term vision. Although it used to be mainly about motivation and recognition in the short term, today there’s more attention being paid to creating a valuable and lasting impact.
4. Geopolitical tensions and security: Concerns about global tensions and security affect the choice of destinations and the overall feasibility of incentive travel.
5. Economic developments: Lower or stagnant economic growth can strongly influence the budgets for incentive travel.
6. Technological progress: AI is playing an increasingly significant role in developing incentive travel, offering personalised experiences based on data analysis, such as participants’ preferences and behaviours.

Leader in reach and impact

An overwhelming majority of respondents (78 percent) indicate that, despite social pressure, incentive travel still uniquely contributes to company values, with a reach and impact that other events, such as staff parties or company days, cannot match.

However, respondents believe that the content of incentive travel must change in the future to align with sustainable and strategic objectives.

The research shows that companies identify important indicators that are relevant to both incentive agencies and their businesses. The current dynamic times force all parties involved to take a critical look at the application of incentive travel and adapt their strategies to remain relevant where necessary.

 

The research shows that many companies have difficulty with the concept of sustainability

 

From fun to goal-orientated

The study shows a clear shift from the conventional ‘fun party incentive’, which often includes many incentive trips, towards more goal-orientated ones that are integrated into business strategies and focused on value creation and long-term goals.

Sustainability and social impact continue to grow in importance, and these themes must be the main focus in line with the companies’ core values. In the future, companies expect that incentive trips will offer more than just entertainment; they should contribute to personal and professional growth, support social and environmental goals, and reflect the company’s core values.

However, the research shows that many companies struggle with the concept of sustainability. Many incentive trips include air travel, as popular destinations are still around the Mediterranean. Many clients face a dilemma about sustainability, although it’s rarely decisive in destination choice. Nonetheless, respondents expect that this will come under greater scrutiny in the future.

Joe Pine’s view

Marketing guru Joe Pine also had the opportunity to see the research results. Pine confirms that incentive travel can deliver greater value when integrated into the business strategy. According to him, incentive agencies and their clients can gain even more benefits by expanding their collaboration.

The experiences gained during an incentive trip should have a lasting impact on the strategic development of a company. Nowadays, collaboration often ends shortly after the trip is done, but Pine suggests that the corporate event organiser and the agency play a more strategic role. Ideally, completion and preparation for the next trip should start immediately following the end of the previous one. Pine sees an incentive trip as part of a long-term strategy, not as a one-off initiative, although that often happens in practice. He also highlights how important it is to assess and thoroughly evaluate incentive travel in order to optimise long-term benefits and maximise value.

Conclusion

Incentive travel remains an effective way to motivate employees and foster a positive company culture. However, its role is changing. The focus is increasingly shifting to sustainability, the need for meaningful experiences and new challenges in legislation, regulations and geopolitics, which requires a new perspective. For companies and event organisers, the future lies in combining these elements in their incentive programs. This will require a shift from a mainly logistical approach to a strategic one, which not only provides more value but is also more future-proof.

 

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Tips from the research

1. Co-creation between corporate and agency: Incentive agencies and clients must collaborate more closely to design incentive trips that align with their strategic objectives. These travel programs must also contribute to employee engagement, team building and sustainability.
2. Focus on value creation: Incentive travel should include educational aspects and provide experiences that support long-term employee growth and company goals.
3. Prioritising sustainability: It must become an integral part of incentive travel. The emphasis in the pre-selection of destinations should be on environmentally friendly destinations and activities that minimise ecological impact and encourage social responsibility.
4.  AI customisation: Instead of seeing AI as a burden, embrace it. Use AI technologies to create tailored travel experiences based on employee preferences, allowing for greater customisation.