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Incentive Research Foundation Survey Says: Economy Impacting Incentive Trends

Date: December 2 2011

St. Louis – [Dec. 2, 2011] - What a difference less than a year can make. Unlike the start of 2011, the Incentive Research Foundation’s (IRF) latest survey of incentive industry trends finds planners struggling with the effects of an economy caught in a slow recovery.  
According to IRF President Melissa Van Dyke, “Survey participants demonstrated that their program’s sensitivity to internal pressures, competitor reactions and perceptions of extravagance were lower than in the spring and actually at a level equivalent to or below 2008. However, they cited the economy as having a significant impact on all incentive plans.” 
Incentive travel programs were affected most from the economic outlook. “Respondents indicated they are less optimistic than they were in the Spring about their ability to plan and implement incentive travel programs and consider the economy as having a relatively negative impact on their ability to execute the programs they would like,” continued Van Dyke, citing the following results for travel programs:
  • 62 percent said the economy is having a negative impact on program planning --numbers that haven't been this high since July of 2009
  • While 28 percent expected their budgets to decline, 45 percent anticipate no change, and 27 percent actually expect an increase
  • More than half of the programs will only be providing air tickets and covering no incidental expenses
  • 41 percent will be reducing the number of nights
  • 40 percent are shrinking 'non-meal' components
Destinations reflect economic realities with 83 percent of planners providing incentive travel to within the U.S., 55 percent going no further than the Caribbean, 52 percent including Europe, and 29 percent targeting Central America.  Less than 18 percent are considering destinations in Asia, South America, Africa or the Middle East
“In the area of noncash merchandise incentive programs, there is less agreement on the impact of the economy in 2012. Twenty-four percent of respondents see a negative impact, 27 percent anticipate no effect and 25 percent expect a positive influence,” said Van Dyke. “In fact, 17 percent anticipate such positive changes as adding individual travel and/or increasing the value of merchandise or gift cards.” The survey revealed the types of merchandise include: gift cards (46 percent), clothing/apparel (43 percent), electronics (42 percent), luggage (34 percent) and jewelry/watches (33 percent).
“In general, respondents indicated that they anticipate most incentive program elements to remain essentially unchanged in the coming year, reflecting a slower return to growth than originally anticipated” Van Dyke concluded.
About the IRF:
The Incentive Research Foundation ( funds and promotes research to advance the science and enhance the awareness and appropriate application of motivation and incentives in business and industry globally. The goal is to increase the understanding, effective use, and resultant benefits of incentives to businesses that currently use incentives and others interested in improved performance.

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