SITE Prez: Taxes Hinder Incentive Growth
<B>SITE Prez: Taxes Hinder Incentive Growth</B>
By Chris Davis
Though a general consensus exists that 2000 will wind up a strong year for corporate incentive travel, with more corporations incorporating travel into their internal marketing plans, it won't be helped by the taxes placed on such travel by many countries, noted the new president of the Society for Incentive Travel Executives.
"It is an interesting fact that many developing countries are embracing and encouraging incentive travel in their countries, seeing our industry as an important contributor to their local economy," said new SITE president Tasso Pappas. "Unfortunately, the more developed countries see incentive travel as a product that can be penalized by taxation."
Pappas, whose one-year term began Jan. 1, serves as managing director of Brussels, Belgium-based full-service destination management company CIB Performance.
Despite Pappas' consternation at the level of taxation in the international incentive travel industry, he noted that the sound American economy and explosion of the technology sector have increased demand among domestic corporations.
"Obviously the big players are still the automotive and pharmaceutical industries, plus the new users from the IT industries such as computer manufacturers and software companies," have served to keep demand strong for the foreseeable future, Pappas said. "Many companies are now actively incorporating it into their marketing strategy--a trend I hope to see grow in the future."
What that doesn't translate into is excellent opportunity for the corporate incentive buyer. Pappas pointed to the still-strong seller's market, and the hospitality industry's revenue management structures as reasons why corporate buyers will have a more difficult time maximizing their incentive travel dollars.
"It is certainly not getting any easier," Pappas said. "As long as demand outstrips supply and many suppliers put more faith in yield management rather than filling seats or beds, we will have to continue to work very hard on behalf of our clients."
Therefore, Pappas said, it is SITE's reponsibility to inform both buyers and suppliers about the benefits of incentive travel. "We must become more responsive to market trends and client goals," he said. "We must continue to educate the corporate client as to the value of incentive travel as a motivator, which leads to greater performance results or the achievement of sales targets."
In Pappas' view, the best way for corporate incentive buyers to ensure the most value for their incentive travel dollars is to include a third party in planning and staging the event.
"Using the services of professionals, such as incentive houses and fulfillment companies, can control costs," Pappas said. "Their experience, contacts and creativity can cut out a lot of wasted time and dollars and provide a focused product targeted to achieve the client's desired aims."
Pappas has spent nearly 30 years in the incentive travel industry, serving in businesses in his native Greece before setting up shop in Belgium in 1990. His current position involves developing and enhancing Belgium's reputation as an incentive destination. He is one of only 50 people worldwide to earn the Certified Incentive Travel Executive designation--the highest in the incentive travel industry.
Jan. 1 also marked the departure of SITE's longtime CEO, Bob Vitagliano, who had served in that capacity since 1993. Vitagliano was replaced by Jill Harrington (Meetings Today, Aug. 2, 1999), formerly the managing director of incentives for Maritz Canada Inc. of Toronto. A SITE member for five years, she also has served as a board member and vice president of SITE Canada.