Incentive Buyers Book International Travel Despite Security Concerns
Incentive travel buyers have grown a thick skin during the past two years when it comes to booking international trips and are not canceling bookings in the face of last month's spate of bombings and reports of planned terrorist attacks. Buyers said they take every necessary precaution in booking incentive trips, but that their employees still appreciate a foreign destination.
In fact, companies not only are continuing to book incentive groups in Europe and Asia/Pacific, among other destinations, consultants said budgets are strong and the use of luxury properties, amenities and activities is up.
Kurt Paben, Minneapolis-based Carlson Marketing's vice president of business development for meetings and events, said the company has seen an increase in incentives business, especially overseas.
"We're actually seeing some of our international travel increase year over year," Paben said. "Clients continue to ask questions and do a little more due diligence before traveling internationally, however, interest in traveling internationally is up."
During the past two years buyers have been much more reluctant to change their purchasing habits due to global unrest, Paben said. Compared with the nervous years immediately following the terrorist attacks of Sept. 11, 2001, buyers today are more confident in the security of their employees overseas, he said. None of the international trips planned through Carlson have been canceled at this time, he added, and new bookings in Europe, Asia Pacific, South Africa and Australia continue.
"It's part of our responsibility to keep them posted on what's going on in those particular parts of the world and understand the security precautions and what the State Department is saying. It just requires a little more due diligence than it has in the past," Paben said.
A typical overseas incentive trip is six nights and the size can range from 50 to 100 attendees to more than 1,000 attendees, Paben said. Some of the newest trends in incentives have centered on attendee activities.
"We're seeing a huge trend toward trying to create activities and experiences that are much more based on people's individual interests and needs versus providing large group activities," Paben said. "The incentive becomes more meaningful."
The types of activities provided on incentives also have shifted in the past year.
"We're seeing things that are much more active, more athletic," Paben said. "People are interested in getting out and exploring more. I don't think it's a generational shift because we see people doing it at all ages."
Activities on an overseas incentive trip also are focused on local culture, especially during food and wine activities, he said.
"They want to make it a more authentic experience," he said.
Julie Johnson, manager of events and incentives for Richardson, Texas-based heating and cooling equipment firm Lennox Industries Inc., said the company typically holds one foreign incentive trip each year. The company has planned a Mediterranean cruise this month that will include time in Turkey, where bombings last month in coastal resort towns injured dozens and killed three people. However, terrorist threats cause less concern among attendees than might be expected, and Johnson said incentive trips are voluntary.
"We almost every year do an incentive overseas. Even after 9/11, we went. Some people aren't comfortable, so obviously we don't make them go. We try to explain that as a company we would never put anybody in danger and that we're on top of it."
Attendance is so strong that the planned cruise even has a waiting list for employees who wish to buy into the incentive trip and purchase a ticket individually, she added.
Preparation is the key to addressing security concerns, Johnson said. Whenever an incident occurs, such as the bombings in Turkey or reports of a major terrorist attack thwarted in England, the meetings department team meets to discuss the effect on the company.
"We certainly would not choose a destination that would be dangerous, but usually we're choosing a couple years out. I don't think our plans will change unless something drastic happens," she said.
Air and hotel vendors are chosen largely based on service and costs, rather than security, she said. Incentive travel follows the same trend as leisure travel, which has not been greatly affected by recent global unrest.
"I just signed off on 2008 for Prague," Johnson said. "If we need to make changes, we will."
Not every incentive travel management company has seen growing interest in overseas destinations. Rick Garlick, director of consulting and strategic implementation for St. Louis-based Maritz Research, a division of Maritz Inc., said such concerns as gas prices, hurricanes and terrorist threats have not yet deterred incentive travel. Incentive buyers are not changing their existing travel plans, he said, but Maritz has seen a slight shift to domestic incentives. Exchange rates have been a factor in companies keeping their top earners closer to home, he said, especially in Europe where the dollar continues to be weak.
According to the fourth annual FutureWatch survey, released in January by Meeting Professionals International and American Express, U.S. planner respondents said they would hold 5 percent of their events in Europe this year, compared with 6 percent for 2005. European planners, encouraged by favorable exchange rates, are holding a greater percentage of their events in the United States. The survey showed 12 percent of those events booked in the United States this year compared with 10 percent in 2005.
Terrorist threats do have a long-term impact on incentive travel, he said. It's too difficult to predict whether global security would become more unstable or if fears will subside, but Garlick said most incentive buyers take precautions when purchasing foreign trips.
"People are playing it safe," he said, adding that clients often choose well-known hotel chains over independent properties in Europe.
Still, despite the external factors, companies continue to increase incentive travel spending, Garlick said. Instead of sending employees overseas, many U.S. companies are enriching their domestic trips by adding on better quality accommodations and more luxury activities.