Incentive travel is more than just a fun trip to an exotic location.
It's a strategic tool that companies like yours are leveraging to motivate teams, boost performance, and create unforgettable experiences.
But let's face it, you're not just planning these trips for fun. You have leadership teams to answer to, numbers to crunch, and ROI to report.
That's where this comprehensive analysis comes in. In this article, we'll dive into the ROI of incentive travel, backed by real statistics and insights, so you can show the real return on investment for your own program.
(P.S. we encourage you to take all of these stats and present them to your leadership team for your next incentive program.)
The Hard Numbers: The ROI of Incentive Travel
Incentive travel has become a cornerstone of many organizations' reward strategies. But it can sometimes be difficult to measure their exact impact.
From increased sales to reducing employee turnover, there are many reasons why businesses use incentive trips in their strategy.
Let's take a look at some of the reasons to host an incentive travel program below.
Increased Participation: Companies are indicating a growth of 61% in 2024 for their incentive travel programs, as compared to 2019, according to the Incentive Research Foundation 2023 Trends Report.
Increased Spending: The Trends report also shows an increase in spending on these programs, with 56% of companies reporting increased per-person spending compared to 2019. It's not just your program; companies are feeling it across the board. And with increased inflation, you'll continue to see those numbers increase. Remember, though, that the increase doesn't necessarily mean decreased ROI; you'll just need to find ways to make your money more significant and reduce wasteful spend.
Increased Strategic Importance: According to a study by the Incentive Travel Index from 2022, 80% of companies surveyed say that incentive travel is gaining strategic importance. Incentives are strategy, and incentive travel is becoming even more important.
Widespread Acceptance: 36% of U.S. businesses that offer employee incentives and 39% of businesses that offer channel/partner incentives use incentive travel (Incentive Federation). These numbers have grown from 25% and 19%, respectively, since 2016, showing businesses' increased interest in incentive travel.
Revenue Growth: Companies using non-cash rewards, including incentive travel, experience 3X higher revenue increases, according to Aberdeen Research. This positive ROI is a major consideration when building a incentive travel program.
Productivity Boost: Properly designed programs increase sales productivity by 18% and produce an ROI of 112%, according to the Incentive Research Foundation (Incentive Research Foundation). Incentive trips promote a better workplace environment and reduced stress, which can help with productivity. When teams feel appreciated and have time to relax, they will feel more motivated to perform.
Increased Retention: Organizations that offer strong benefits and incentives to employees reduce the likelihood of turnover by 26% and increase retention by 14% (National Institutes of Health). This is inclusive of all benefits and incentives but underscores the importance of building out a full strategy. The Incentive Travel Index cites that 67% of respondents report a greater importance in retaining employees. (We highly recommend reading through this report. It breaks down the research in a very digestible way.)
Incentive Travel Motivates: The percentage of sales professionals who said they found group incentive travel to be 'extremely' or 'very' motivating rose from 80% in 2021 to 91% in 2022, suggesting that not only is group incentive travel appealing across the board, but that it is becoming more of a driver of motivation among salespeople (IRF).
Important in a Dispersed World: 91% of respondents in an Incentive Research Foundation study agree that with dispersed workforces, incentive travel has become increasingly important for building engagement and company culture. An important strategy to boost long-term ROI is to engage your employees who work remotely and drive improved bonds and loyalty. Incentive travel is just one of those tools to do so.
Not Just a Cost-Driver: The majority of respondents to the Incentive Travel Index actually consider incentive travel a profit driver and a source of competitive advantage.
Incentive travel works. It helps motivate employees, reward top performers, and even create better relationships with clients, partners, and channel partners. Keep these statistics handy when you're looking to get budget approved for your incentive program.
The Soft Benefits of Incentive Travel
Incentive trips offer intangible benefits that contribute to a positive company culture. It's about the lasting impact it can have on your employees.
Focus on Soft Power Benefits
Soft benefits aren't less powerful than "hard" benefits like ROI. In fact, many companies are placing a larger emphasis on improving company culture and engagement.
66% of buyers report shifting programs toward soft power benefits like engagement and loyalty (Incentive Travel Index). Although these might be harder to measure, they are still an incredibly important factor in building and maintaining a successful company.
Incentive trips are an excellent time for leadership, top performers, clients, partners, and more to build stronger relationships at a more personal level. This is the biggest benefit of an incentive trip, in our opinion. A stronger bond between your top talent or your partners is invaluable to your business.
In fact, the Incentive Travel Index says that 72% of respondents say that relationship building is the most important in building a successful program.
According to a SITE International Foundation study, 96% of trip earners were motivated by the opportunity, and 73% reported increased loyalty (Site Participant Viewpoint Research). Loyalty is very important to businesses, and it's important to recognize achievements and create a sense of appreciation to drive this loyalty.
We've seen this in action: survey responses for one of our recent President's Club trips highlighted how connected and grateful to the company the attendees felt. These types of benefits simply can't be measured in the hard numbers.
The Investment in Incentive Travel
Investing in incentive travel is a strategic decision with measurable returns, but it doesn't come without a cost. Especially as inflation has changed the landscape in recent year, it's more important than ever to level-set expectations of cost. Let's take a look at some benchmarks below.
U.S. businesses spend $176 Billion annually on incentives, including incentive travel (Incentive Federation). It's a significant investment that reflects the value and impact of incentive travel.
Incentive travel budgets can range anywhere from $4,000 to over $20,000 per person. We manage multiple programs that range in value, and it really depends on several factors, including the size of your program, location, time of year, length of stay, and number of activities, among other factors.
But what's important to remember is that it's not just about the budget; it's about maximizing the value and creating experiences that resonate with your employees. Small events for $6,000 per person can be just as effective as larger-scale events at $15,000 per person.
We've helped clients maximize their investment by turning ordinary trips into extraordinary experiences. It's about finding the right strategy and approach to your event to make the biggest impact. Let's look at some of those ways below.
Maximizing the Impact of Incentive Travel
Maximizing the impact of incentive travel requires a strategic lens that takes into account more than just numbers or "fun". Your trip should incorporate your business objectives and a deep understanding of your attendees.
Personalization can be incredibly effective for incentive programs. Creating little moments that make your attendees feel special can increase your impact significantly (especially because most people expect some level of personalization these days).
We've leveraged personalization with our clients in the activities attendees get to participate in, their gifts, and even the meals they're served. If you can anticipate their needs beforehand and find ways to exceed them, you can create immense value with not that much investment.
Integrating the program with other initiatives amplifies the impact. Consider building a strategy around multiple touchpoints a year, where your incentive program is just the pinnacle.
You can have quarterly or monthly meetings and meet-ups, where members of your incentive group catch up, talk strategy, and provide candid feedback to leadership.
This exclusive group can be especially effective in continuing to drive loyalty and engagement throughout the year.
Finding a balance between luxury and budget, interaction and downtime, and all the other factors that go into your travel incentive program can be difficult, but they are key to unlocking the most value from your program.
Maybe you don't need the 5-star resort but you want to have a ton of fun activities. Or maybe you don't want the extravagant dinner, but your attendees would love some shopping money. Consider who you're hosting and what they're interested in to help decide the balance of your program (and where to meticulously cut costs).
It's all about engagement: How can you make your attendees feel connected to each other and to your company?
This doesn't take a huge budget. It can simply be finding ways to get your top performers and leadership teams interacting.
Be creative here, and don't fret if your budget doesn't allow you to do a million activities. A focused breakfast meeting with teams might just do the trick.
Your Journey to Success with Your Incentive Trip
Travel incentive programs are a powerful tool that can transform your business. With the right planning, clear objectives, and a touch of creativity, the ROI of incentive travel is achievable.
At GoGather, we've seen firsthand the impact of well-planned incentive trips. Let's help you achieve the best ROI for your program by thinking through all the different ways to structure and create your program. Schedule a meeting with us today to brainstorm.