• October 24, 2023

Growth forecast for incentive travel

Growth forecast for incentive travel

Growth forecast for incentive travel 1024 684 micebook.

The incentive travel sector is expected to see solid growth over the next several years, with growth projected through 2025 for both number of people participating in incentive trips as well as per-person spend, according to the newly released 2023 Incentive Travel Index (ITI).

That said, tangible financial ROI and concerns around cost are indexing higher than previous studies, highlighting an underlying caution that stems from an uncertain geo-political, economic, and environmental backdrop.

The Incentive Travel Index is joint initiative of the Incentive Research Foundation (IRF) and the Foundation of the Society for Incentive Travel Excellence (SITE Foundation) and is undertaken in partnership with Oxford Economics.

The research found that incentive travel is becoming a necessary part of company culture due to its numerous benefits and 68% of the buyers who responded to the annual survey agreed that incentive travel was previously used for ‘hard power’ benefits, but now it’s mostly about ‘soft power’ benefits such as a focus on company culture, engagement, and relationships.

Most respondents (90%) believe that incentive travel is gaining in strategic importance due to the role it can play in retaining talent, while 83% said it is valued as a reward and 79% said it’s important for bringing together dispersed workforces.

Many end-user companies have senior leadership that view incentive travel as ‘need to have’ (53%) and are ‘highly engaged’ in planning (37%).

In 2024, more than half of buyers (57%) expect incentive travel activity to be above or significantly above 2022 levels, with 59% expecting spend per person to rise. This compares to 46% and 43% respectively this year.

Costs are becoming increasingly important as inflation is a major challenge across all industries and regions – 76% of respondents highlight rising costs/inflation as a key challenge, while 55% expect attracting and retaining talent to be a challenge, and 49% said uncertainty related to short-term planning.

When asked the activities key to a successful programme, the responses were:
60% – group cultural sightseeing experiences
58% – relationship building activities
57% – group dining experiences
53% – luxury travel/bucket list experiences
43% – teambuilding

Across regions, buyers expect to increase incentive travel to destinations that are within closer proximity, while considering destinations not used before.

“Incentive travel is expected to be fresh and exciting, with 71% of our respondents indicating an increased demand for new destinations not used before,” said Stephanie Harris, IRF President. “With projected growth and increased demand, incentive professionals will also have to contend with challenges of availability, lift, and access to local resources. The supply chain for incentive travel experiences can be complex, so it’s critical to form strong partnerships with suppliers, including hotels, DMOs, and DMCs.”

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