What is Incentive Travel? From Corporate Junket to Sustainable Experiences
Incentive travel plays a huge part in the MICE industry. Companies of all sizes around the world use travel experiences as a method of motivating and encouraging their employees to perform well, organising all kinds of trips as a reward.
As highlighted in our 2023 Trend Report, the landscape of incentive travel has changed significantly in the past couple of years, with both companies and their employees experiencing a shift in priorities and preferences when it comes to this kind of travel. In this article, we explore the history of incentive travel programmes to understand how the landscape of this sector has changed and then share our thoughts on the importance of sustainable incentive travel and how companies can plan the most effective trips and programmes.
In this article:
What is Incentive Travel?
Incentive travel is a kind of travel experience that is offered to motivate, incentivise or reward employees. Companies offering incentive programmes will often select a number of top-performing employees every year and send them on a free or heavily subsidised trip to thank them for their work. Alternatively, incentive trips may be used as a team-building exercise as well as a reward, providing employees with the opportunity to share experiences and grow closer outside of a work environment.
Corporate incentive travel programmes come in all shapes and sizes, blending leisure time with professional development opportunities and sometimes involving employees’ families or partners as well. Whilst the main aim of most of these schemes is to motivate employees and encourage top performance, incentive travel can also be used to help reach business goals or drive sales through non-direct employee channels.
What Is the Purpose of Using Incentive Travel and Reward Programs for Employees?
From a business perspective, the key purpose of establishing incentive programmes is that it can help to increase revenue. In fact, the Incentive Research Foundation found that properly designed travel incentive programs have an ROI of 112%, demonstrating the impact that establishing these reward systems can have on a business.
Another purpose of using incentive travel programs is that it can help improve recruitment efforts. Employees in today’s market are looking for employment opportunities that offer them a lot more than just a job, and having an established incentive program can help to attract the most talented employees to your company, and encourage your top performers to stay with your organisation for longer.
When it comes to the workforce, two of the main purposes of using incentive travel are that it can boost employee performance and increase employee engagement.
Whilst many people might say that they are most motivated by money, research actually shows that non-monetary rewards are actually two to three times more effective at motivating employees than just offering them a bonus. So when you organise and promote an incentive travel programme, employees are going to be more motivated to work towards the goal of going on these trips than if you’d just promised more money to top performers.
Non-monetary incentives, like travel experiences, are also a really useful way to improve employee engagement because they provide something tangible for your staff to focus on and work towards rather than just more money in the bank. These kinds of rewards are more interesting and therefore more memorable, so teams will be much more engaged when working towards achieving them.
The History of Incentive Travel
Incentive programs have existed since the 1920s, when companies decided that the best way to motivate their sales teams and encourage (what they hoped was) friendly competition was to provide rewards for top performers. Monetary incentives like bonuses were offered at first, but when tax laws started to change in the 1950s, employers needed a new way to deliver the same kind of reward.
Incentive programs were born from this need, providing employees with a range of perks for meeting sales goals or performing particularly well over a period of time. Holidays were a major part of these perks, and this is where travel incentives originated.
Initially, corporate incentive travel featured a lot of exclusive and flashy experiences for participants, such as staying at all-inclusive hotels, getting to fly in business class, and enjoying luxurious experiences. Employees were given the chance to experience holidays that they may not have paid for themselves, so the emphasis was on entertainment and consumption.
In the past decade however, the landscape of incentive travel has changed. Changing preferences in travel, the growing concern about climate change and the growth of corporate social responsibility have all meant that the priorities of incentive travel are more about opportunities to experience new cultures, have authentic experiences, travel sustainably and contribute to the local economy.
As we discussed in our 2023 report, the pandemic had a significant impact on the conference and incentive travel sectors. Travel came to a significant standstill during 2020, and when the industry opened up again, every area was impacted, including incentive trips.
Despite changing attitudes towards travel however, incentive travel is still a priority for many companies. As Patrick Delaney, Managing Director of SoolNua, shared in our report: “Businesses will always look at ways to grow and now, more than ever, there is an emphasis on gaining, engaging, and nurturing talent. These are key drivers of the incentive market”. Growth and talent retention are key priorities for organisations everywhere, and incentive travel is a key contributor to both of these.
With corporate incentive travel still relevant and present in many business strategies pre-pandemic, companies looking to maximise the ROI of this approach need to understand how employee attitudes have changed and what they now value the most from incentive travel experiences.
The key focuses we highlighted for incentive travel in our trend report included personalisation, extended experiences, engagement, creativity and cultural enrichment. Employees are “not impressed by beautiful hotels and luxury travel” and instead want travel experiences that teach them more about new destinations and provide personal development opportunities as well as time to relax.
Looking for more MICE industry insights?
Keep up to date with the latest trends and expert insights from IBTM World.
Incentive Travel and Sustainability
Another of the key themes that we highlighted for successful incentive travel approaches was sustainability. As David Taylor, Non-Executive Director of BCD Meetings & Events, shared in our report “We’re seeing businesses re-label incentives to show positive impacts on people, planet, and profit”. Companies offering travel incentives shouldn’t just be thinking about how they can use these programs to boost revenue and performance, but also how they can support their sustainability claims.
Plenty of people have prioritised sustainability in many aspects of their lives in recent years, including their careers. Research by IBM found that 69% of the full potential workforce are more likely to accept a job with an organisation they consider to be environmentally sustainable, with 7 in 10 workers also saying they’re more likely to stay with an employer that has a good sustainable reputation. When such a large proportion of the workforce cares about working for a company with sustainable ethics, it’s unsurprising that successful incentive programs run by these companies also need to be environmentally friendly.
In the past, corporate incentive travel was all about far-flung destinations and luxury experiences, regardless of the environmental and cultural impact. Now, businesses with a ‘green’ reputation need to ensure that their company incentive trips don’t tarnish their image by choosing sustainable transport options, destinations with low-impact tourism practices, and holiday activities that don’t harm the environment and even offer the opportunity to protect or preserve it.
The level of sustainability that you bring into your conference and incentive travel approach will depend on how much effort you put into being sustainable in other areas of your business. But as our trend report has highlighted, it’s a growing priority for employees and a key trend in the wider travel industry, so the sooner you incorporate sustainable practices into your programme, the better.
What Are the Main Components of Planning Incentive Travel?
Different companies approach incentive programmes in different ways, but there are key components that you should consider during the planning process no matter what.
Determine the Purpose
When you’re investing money into a venture like incentive travel to try and improve or grow an aspect of your business, you need to have a clear idea of what you’re trying to achieve before you start. Without this purpose, you’ll be left with no way of gauging your success and will also have less direction throughout the planning process.
Decide on what you’re aiming to achieve with your travel incentives and outline the impact that this could have on the business, so you know what you’re working towards. Perhaps you want to hit a new sales goal this year, or you’re aiming to retain a higher percentage of employees. Make sure that this purpose is clear, exact and measurable so that it’s easy to gauge whether you’ve been successful.
Align with Your Values and Goals
The most effective incentive trips are ones that feel like a natural extension of a business or brand. You want to choose destinations and experiences that link back to your mission, values or brand in some way so that employees don’t just feel like they’re getting sent on a generic holiday and return feeling more connected to their employer.
Aligning your incentive program with your business goals or company values is a great way to increase employee engagement in the scheme and also make your incentive trips a key part of your brand image and/or employer branding. We’ve already talked about ensuring that you make good on your sustainability claims when organising incentive travel, but also think about what your mission and values are and how these could translate into travel experiences.
This doesn't have to be complex; companies with ‘green’ credentials should opt for sustainable travel experiences, businesses with ties to charity should consider how they can connect their employees with this work, and companies that value personal development should include relevant opportunities in their itineraries. What you want to avoid is planning trips that feel completely irrelevant, as these will likely be a lot less successful.
Deliver Genuine Value
If you’re using corporate incentive travel as a tool for employee motivation (and the majority of businesses are) then an essential component of the planning process is making sure you’re offering trips that employees actually want to go on. If your staff don’t see the value in an incentive trip, they’re not going to work to be offered it, and you’ll end up wasting your resources.
The best way to ensure that you’re delivering genuine value with travel incentives is to ask your employees what they want. You don’t have to deliver every suggestion, but sending out surveys or holding focus groups should highlight what people will and won’t be motivated by, which provides an excellent foundation for planning a trip.
Ensuring that your travel opportunities are valuable to employees is one thing, but you also want to make sure that you get as much value out of them as possible. To maximise the impact that your incentive programmes make, think about how you can build anticipation, excitement and interest in the programme beforehand. Equally, consider the content that you can share amongst employees about the trip afterwards, or how you can extend the experience for chosen employees as much as possible.
Measure and Improve
The final component of successful incentive travel planning is measuring the impact of the programme and employee enjoyment and engagement. You can then use this data to improve the experience and increase the impact, as well as ensure that you continue to deliver opportunities that employees actually find rewarding.
You can read our article on How To Organise Incentive Travel for more information and advice about what to include when you’re planning a corporate trip.
Incentive travel has changed a lot since its origins as flashy holidays for top-performing salesmen. Now, these trips give companies the opportunity to help employees develop as well as reward their hard work, and are also used as a way to enhance brand image and encourage increased employee retention. Incentive travel companies may have been impacted by the events of the last few years, but there’s still plenty of interest in these kinds of programmes in light of trends like sustainable travel, employer branding and corporate social responsibility.
Enjoy this article? Make sure to share it!
View the latest tips, trends and insights from the IBTM World team.
Be in the know
Receive our latest news for free straight to your inbox.
Looking for something else?