Throughout America, Europe and Asia, budgets for incentive travel are growing as companies recognise the benefits and move away from monetary awards and mandated corporate events.
In this article, we learn why incentive travel programs are so popular and look at the benefits for both organisations and employees.
What are the benefits of incentive travel?
Corporate incentive travel programs have become increasingly popular as a way of achieving goals and rewarding top performers. As organisations recognise the benefits of incentive trips, allocated budgets have grown exponentially from 0.5% in 2018 to almost 6% in 2022.
So why have travel incentive programs become so popular? And what makes them preferable over traditional monetary rewards?
Benefits of incentive travel for employers
At one time, organisations would disregard incentive travel programs because they considered them to be exuberant and unnecessary with little tangible value.
But that school of thought is on the way out.
Leading companies now agree that incentive travel programs are highly effective with a measurable ROI.
- Tangible benefits: It will come as no surprise that monetary incentives are still the leading reason organisations invest in incentive travel programs. A study by IRF in 2019 deemed that “increased sales and/or profits for the company” is still the leading benefit of incentive travel. Hard dollars and corporate profitability are, naturally, of the utmost importance.
- Soft power benefits: While increased sales and profits are still the primary reason organisations are using incentive travel awards, IRF’s 2019 study found that “soft power” benefits such as higher employee engagement, better productivity, improved relationship-building between employees and management and the retention of employees and partners are becoming more important to buyers. But that doesn’t mean “soft benefits” don’t produce monetary rewards.
Motivated employees are inspired to develop themselves professionally and reach higher levels of success. This leads to improved performance, more sales and, eventually, increased revenue.
- Additional benefits: The benefits of incentive travel permeate deep into the fabric of your organisation which can cause some benefits to escape unnoticed. Improved performance can be quite simply correlated to incentive travel programs. But what about other factors?
Consider, for example, how your long-term employees could serve as ambassadors for your brand and inspire new hires to reach their full potential, or how a united workforce demonstrating a strong company culture helps attract top-level talent from your competitors.
These more subtle benefits form part of a high-performing organisational ecosystem that gives you a significant competitive advantage.
Benefits of incentive travel for employees
Despite the obvious joy of a free holiday, incentive travel initiatives provide many benefits for employees:
- Improved growth opportunities: Incentive trips allow employees to transgress the often impenetrable barriers of the corporate hierarchy. This nurtures their emotional bond with the company and enables them to connect with corporate heavyweights.
Creating opportunities for employees to further their careers is critical for job satisfaction. Most of your employees don’t want to be stuck in the same role forever, they want to grow and take on more responsibility.
- Stronger interpersonal connections: Incentive travel also provides employees with quality time away from the office, allowing them to build strong relationships and lasting memories. These connections contribute to job satisfaction and improve collaboration.
Strong emotional ties increase the likelihood of an employee going the extra mile or supporting a colleague, even when the task at hand doesn't pertain directly to their role. This is a great indicator that your employees are satisfied and engaged at work.
- Recognition of contributions: Employees want their hard work to be acknowledged. That shouldn’t come as a shock. According to a SurveyMonkey study of 1,500 employees Americans, 82% of employees are happier when they’re recognised at work.
Travel rewards are a fantastic way of demonstrating appreciation to an employee and making an example of their efforts. When mid-level employees see that their top-performing peers are being well rewarded, they’re more likely to reach strive for success themselves.
Why are incentive travel programs so effective?
People value experiences more than things, that’s what makes incentive travel programs so effective.
The prospect of jetting off on a five-day trip to Hawaii with friends and colleagues is much more appealing than a cash bonus, and once word starts to spread about a potential holiday in the tropics, excitement in the office will build quickly.
This buzz is fundamental to the effectiveness of an employee incentive program — nobody wants to be left behind while the rest of the team packs their swimming trunks. This motivates the potential earner to work harder to meet the criteria for the trip.
In the IRF’s June 2021 study, The Impact of Destination Choice on Motivation, they reported that group incentive travel awards are considered ‘very’ or ‘extremely’ motivating by 80% of survey respondents.
Why monetary rewards don’t help you meet your company goals
Traditionally, managers would motivate behaviours with monetary rewards. But now, 84% of U.S. businesses are using non-cash incentives to push their agendas and as many as 40% are using recognising employee contributions with travel rewards.
That’s because cash rewards aren’t effective motivators. Sure, nobody is going to turn down a juicy end-of-year bonus, but they aren’t sufficient for encouraging new behaviours.
Cash is fleeting. It generates temporary pleasure that’s almost immediately squandered on mundane responsibilities like mortgage payments, credit card debts and utility bills. It’s also extremely personal and doesn’t generate excitement at a group level.
To turn a mid-level performer into a top-level performer, the reward needs to be highly attractive, like a long weekend in Athens, perhaps?