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Sneak Peek: Incentive Travel Industry Index

A preview of the annual report looks at the effects of Covid on incentive travel’s ability to motivate, companies’ willingness to invest in travel rewards, and how programs will look going forward.


When will the incentive travel industry recover, and what will it look like when it does? Those are among the crystal-ball questions on the minds of suppliers and planners around the world who work in this valuable industry segment. This week, the 2020 Incentive Travel Industry Index shed some light on the recovery ahead, and the watchword is patience.

The ITII is a global study of the incentive travel industry, a joint effort of the Incentive Research Foundation, the Society for Incentive Travel Excellence Foundation, Financial and Insurance Conference Professionals, and their research partner Oxford Economics. The report will be available December 10, but a preview of the findings was delivered during the IRF’s “UNvitational” (a virtual version the annual IRF Invitational education event) by a panel representing the sponsor organizations: Stephanie Harris, president of the IRF; Pádraic Gilligan, CMO at SITE; Steve Bova, executive director at FICP; and Adam Sacks, president of Tourism Economics, an Oxford Economics company.

“The recovery is going to take time, there's no question. We don't expect international travel to fully recover until 2025. However, domestic travel and regional travel should recover more quickly,” said Sacks. “We're basically at a plateau right now; we're not going to see any real acceleration and travel gains until the second half of next year, when—through a combination of containment measures, therapeutics, and a vaccine—we’ll see containment of the virus. It's at that point that we could really see lift off, and we are encouraging our clients to plan for a significant upturn in the economy as well as in travel as we make our way through 2021.”

The ITII survey results mirror Sacks’ perspective, showing that incentive travel budgets in 2020 were at just 29 percent of 2019 levels. In 2021, respondents expect budgets to be at 59 percent of 2019 levels, and then 82 percent in 2022, and finally 99 percent in 2023. “Initially, I think we looked at this with kind of pessimistic eyes, thinking [the recovery] is quite a number of years into the future,” commented SITE’s Gillian. “But when you look at it piece by piece, there are definite steps in the right direction. And the fact that we're at 60 percent of 2019 levels next year, that's a really good sign and shows a huge improvement on where we're starting from in 2020.”

The ITII survey also asked incentive professionals about the positive and negative factors that will impact incentive travel in a “post-Covid future,” which it defined as “having a vaccine that is widely accepted and widely adopted.” The most significant positive contributor to the future incentive landscape is people’s desire to travel after being travel-restricted. However, that powerful motivator will be offset by a number of impediments, the two strongest being cuts in corporate spending overall and corporations’ aversion to travel in general.

The third most significant impediment respondents expect for incentives once the pandemic ends is a reluctance of qualifiers to travel. “That is a factor that a lot of organizations are going to have to spend time with and think about how they want to manage it,” said the IRF’s Harris. “The reality is we just might have some travelers who will not be comfortable participating. How do we keep them motivated? How do we keep the incentive alive for those individuals, while they work their way back to being comfortable with traveling?”

Only 12 percent of respondents believe that post-Covid incentive travel will be “very similar” relative to pre-Covid. Almost a quarter (23 percent) believe incentives will be “fundamentally changed” and 65 percent say they’ll be moderately different. Incentive professionals see a temporary shift away from cruise ships, urban destinations, and all-inclusive resorts, with a temporary shift toward domestic locations, a focus on health and safety, and the “presence of a good DMC.” In terms of the program itself, respondents expect a trend away from mandatory events and activities and toward activities that promote wellness and ones that individuals can select.

While the near-term effects of Covid on incentive travel’s ability to motivate employees and customers, and on companies’ willingness to invest in it, remains unclear, Sacks wouldn’t be surprised by a better-than-expected turnaround. “We've looked at crises affecting travel over the past 30 years, and the actual performance [after the crisis] tends to exceed what people expect during the crisis. It's sort of the ‘fog-of-war’ phenomenon: When you're in the middle of it, it’s really is hard to imagine things getting back to normal. Yet, in every case, things inevitably do get back to normal—we find a pent-up demand that was really hard to see at the time.”

The full Incentive Travel Industry Index report will be available on December 10 at the IRF, SITE, and FICP websites.

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