This Site Index report addresses the impact of today’s economic climate on the motivational events industry. Specifically, it assesses the thoughts of both buyers and suppliers regarding the immediate impact of the worldwide recession on the industry and asked for their views on the near future.
In this years report, not surprisingly, 76% responded that they – and their clients – are using fewer motivational travel experiences than in the past. An almost equal number (78%) reported that the decision making process has become more centralized with senior management making the buying decision. There has never been a better time to elevate the discussion with senior management about the effectiveness of incentive travel as a tool in your overall performance improvement and employee engagement strategy nor has it ever been more important.
When questioned about the timing for a return to pre-recession levels of business, there is an even split. Fully 50% believe the recovery will happen within two years while an equal 50% believe it will take more than two years.
The rate of cancellations appears to be slowing. When asked about changes in cancellations over the next six months, 13% expect an increase while 87% say cancellations will stay the same or decrease. This is not surprising, considering that the rate of cancellations seen from September 2008 though the summer of 2009 has not increased, but the real news is that the majority of buyers and suppliers believe that we’ve hit bottom.
74% expect more flexibility in cancellation policies within the next year while only 26% feel there will be no change or a decrease in flexibility.
On the subject of using non-domestic destinations for motivational events, 67% report having experienced a decrease in their use while 33% more positively stated that there was either no change or an increase in the use of non-domestic destinations.
Respondents also forecasted changes in the use of motivational travel experiences in different user industries both over the next 12 months and the next one to two years.
Finally, 86% of respondents expect companies to rely on their motivational events providers to keep them aware of government and industry regulations. Only 4% believe that dependence on suppliers in that area will diminish.
An important conclusion is that our industry cannot be simply reactive. Whether it is the stability of the supplier network or what to do to prepare for the effects of H1N1, we need to inform these discussions with facts and make recommendations that provide for the best business results for our customers.
