Corporate Incentive Trips For Work And Play Booming

<B> Corporate Incentive Trips For Work And Play Booming</B>

By Chris Davis

Both corporations that consider incentive travel a luxury reserved for only the best economic times and those that see it as an indispensable part of their sales and motivation strategy have been able to send their employees packing lately.

Corporate buyers and incentive travel vendors report that corporate usage of incentive travel has increased past the traditional annual sales trip during the past 12 months, with many companies holding either more trips or holding those trips in more exotic destinations.

With many corporations churning out one positive quarterly earnings report after another, many seem inclined to reward their employees for jobs well done--or expand incentive programs they feel helped beef up the bottom line in the first place.

Buyers said that means shorter lead times--and sometimes less negotiating leverage--as they look for resorts and cruises that can accommodate their group six months, instead of three years, from now.

Angela Wallander, vice president of corporate incentives and meetings for Plano, Texas-based Dr. Pepper and Seven Up, said her company has seen evidence of both trends.

"We've been holding more trips of late, not only because it's been a good year financially, but we want to keep motivating our bottlers," Wallander said.

Wallander's programs also are becoming more short term, primarily as a function of having less time and more things to do. "It hurts in that you don't have the options for locations that you may have had if there was more lead time," she said. "But it can help, if you're flexible with the dates and the location needs to fill a hole. Anything over 25 people, though, and you need to be very flexible with dates in the short term."

The result is something of a double-edge sword, said Bill Boyd, president and CEO of Sunbelt Motivation and Travel of Dallas. While short-term incentive business occasionally can yield terrific buying power at resorts looking to plug holes in their booking schedule, it doesn't make for a stable and predictable marketplace, he said.

"Many companies are having such good years that at the eleventh hour, their executives are deciding that they want a trip to reward their employees," Boyd said. "The result is that there's only about a 90-day turnaround on some of these incentive trips. But in the off-season--October through December--a short-term piece of business can make (a property's) year," Boyd said.

Boyd points to Costa Rica, Hawaii, cruises and, lately, Miami (Meetings Today, May 17) as rising stars in the group incentive marketplace. "The new Loews Hotel (which opened in December) has people looking at Miami again."

Some companies that believe more in incentive travel as a reward for employees' past performance rather than a motivator for the future are bucking what has been one of the strongest incentive-industry trends of late: incorporating one or more business meetings into the trip.

"There's been a trend toward true incentives," said Carole Perfetti, vice president and general manager of Minneapolis-based Navigant Meetings & Incentives. "For a while, many companies thought there had to be a meeting or some sort of business aspect to the incentive trip to justify it, but more companies are appreciating the recognition and reward factor."

Perfetti also is seeing a marked increase in short-term business, for two reasons. While the sparkling financial year many companies have enjoyed certainly is a factor, corporations also are booking many millennium-themed incentive trips as a watermark to consider the company's future.

"Business is good, and companies think the millennium is an appropriate time to do something splashy," Perfetti said. "Some companies are adding additional incentive trips to their normal annual schedule because they want to keep the momentum going."

High-end locations and resorts are gaining the attention of reward-minded corporations. Rod Peterson, director of meetings and travel for AmerUs Life in Des Moines, Iowa, said while he's not sure there's a higher incidence of incentive trips, spending on existing trips is being cut far less than in years past. "People are putting more in their existing programs right now," Peterson said. "It's a function of the economy, for the most part. We're all doing very well right now."

Companies in industries that traditionally enjoy a larger slice of the incentive-travel pie, including insurance and automotive firms--find they're joined by telecommunications and technological companies looking to use travel as a motivator.

The popularity and effectiveness of Rochester, N.Y.-based telecommunications firm Frontier Corp.'s sales incentive trip over the past few years has convinced the company to use travel, sometimes in the form of gift certificates, as the prize for additional incentive sales contests throughout the year.

"We're going to be beefing up our incentive travel programs by having more trips, smaller groups and going to nicer properties," said Susan Stafford, senior manager of incentives, promotions and trade shows at Frontier. "The driving factor there is simply hearing of its effectiveness from our sales force. It's fine as long as we keep doing well."

The additional incentive trips, though, haven't softened the negotiating climate for the company, Stafford said. "It's been more difficult than it was a year ago. Some of these five-star properties charge you for anything and everything, and there's no room for movement."

Melinda Rynasko, director of corporate events and incentives for New York-based office furniture manufacturer Knoll Inc., also said negotiating at the hottest incentive locales isn't getting any easier.

"The areas we choose are very popular and, since we do only one major high-end incentive trip annually, we pick the best hotels," Rynasko said. "There are clients backed up waiting to get into these places, so there's not a whole lot of opportunity to negotiate there.