From Pandemic to Prospering – How We See the Path Ahead for the Incentive Industry

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  • Incentives are still seen as critical tools
  • Group travel recovery delayed by slow vaccine rollout
  • Vast majority of stakeholders will return to group travel incentives eventually
  • Regional events will continue to increase in 2021
  • Virtual and Alternative Award options can be creative solutions
  • Now is the time to reevaluate program structures, data points and future goals

Coming out of 2020, the incentive industry is looking toward 2021 with eager eyes for growth opportunities. The Incentive Research Foundation and the Incentive Travel Industry Index found in recent surveys that incentives are still a critical motivating component at many companies. Merchandise, gift cards and yes, travel, remain impactful tools in 2021, with heavier significance on the former options for the first half of the year, at least. The experts at Motivation Excellence predict a steady return to in-person gatherings, as well as continued interest in alternative award offerings and virtual options. In this article, we will share our thoughts on three industry sectors: Group Travel, Alternative Award Options and Performance Tracking Measurements.


As of this writing, even with vaccines starting to be administered, California is under stay at home orders and visitors are either recommended or required to quarantine depending on which part of the state they visit. European countries like the UK, Germany and Italy are either fully shutdown or greatly restricting travel.  A second wave and mutations of the COVID-19 virus are still wreaking havoc around the globe.

Where does that leave the outlook for the incentive travel sector? According to the Incentive Travel Industry Index, the overwhelming desire to travel, especially after a year of no or little traveling, will keep incentive travel experiences at the peak of award aspirations. For now, regional travel to non-urban locations will win-out until the world is able to open its figurative doors again. Respondents to the survey look to the future with positivity mixed with a heavy dose of reality.

  • 83% of buyers report stakeholders are committed to returning to incentive travel when it’s safe
  • Buyers report expected activity in the second half of 2021 to be more robust than all of 2020
  • 66% of respondents expect incentive travel recovery to take up to two years in a post-COVID world

Motivation Excellence’s travel team monitors the state of the industry and the virus on a daily basis. We released our first travel industry forecast in Q4 2020 and have since updated it in 2021. Here are some trends Brad Hecht, VP, Travel and Joe Reise, Manager, Supplier Relations & Sourcing expect to see going forward. We’ve broken them down into positives, challenges and things to consider.

The Positives:

  • The industry will continue to operate more events steadily throughout 2021, but with smaller groups and regional locations
  • Raised health and sanitary standards will continue, mask use encouraged through 2021
  • Touchless travel technology will increase
  • Better technology will allow virtual and hybrid events to be more interactive, flexible and economical

The Challenges:

  • A number of hotels will likely close down in the first quarter of 2021
  • Change in supply and demand of hotel rooms in certain markets might spike rates
  • Air travel challenges including fewer flights and increase in fares when demand outpaces supply

Things to Consider:

  • Clients will increasingly request the use of outdoor spaces for events, allowing for social distancing with larger groups, but making weather a possible issue
  • COVID-19 “fear factor” stays with the public for a while, creating new structures for meetings and events throughout 2021 and into 2022
  • Proof of COVID-19 vaccine or negative test in order to fly
  • Contract language (especially Force Majeure) will change and need to be scrutinized for clients
  • Ground transportation for those who do travel will likely swing toward private vehicles over coach transfers, and budget planning should reflect that

It’s important to point out that group travel, on a smaller and domestic, scale did start back up again in 2020. Even though events like the Grammy’s are being delayed in California in 2021, other states are not implementing the same restrictions. The comfort level of the client and their participants will drive the discussion of when, how and where to meet. The virtual world will remain an integral option in 2021. Motivation Excellence predicts as more people are vaccinated, the appetite for group travel and gatherings will increase. Look for larger group travel programs to resume in 2022, with 2023 being a boon year.

If our travel team could implement one measure they think would help speed up the recovery of the travel sector it would be, “to mandate a vaccine passport for air travel and expedite a vaccine for anyone needing to travel by air. This would create a comfort level among travelers and open tourism doors again for those wanting to fly overseas,” predicts Joe Reise.

Alternative Award Options

“Our clients are looking for ways to connect,” says Rhonda Brewer, VP, Sales. After a year of little in-person contact, Brewer predicts companies will thirst for ways to engage and motivate their employees, sales teams and channel partners.

“Trying to come up with creative ways either in smaller, more targeted groups or through virtual channels will continue to be strong in ‘21.”

Award offerings will also need to align with more creative strategies when it comes to motivating behavior change. In 2019, a group travel experience to Hawaii was a top tier reward. In 2020, individual travel options, lifestyle upgrades and gift cards were alternative options that found success.

According to the IRF survey on the Outlook for Merchandise and Gift Cards in 2021, respondents shared a “reasonably optimistic” view of the future with a 7% gain in spending overall for reward and recognition budgets.

Looking at the mix of award types the IRF survey found gift cards and merchandise are expected to far outweigh experiential awards. The expected spend per person is predicted to remain steady compared to pre-pandemic years at more than $700, which is great news for the incentive industry.

Our Motivation Excellence team will continue to help clients find ways to show appreciation and foster engagement in 2021. Here are some trends we expect to see throughout the year:

  • Alternative awards will continue to spark interest, especially if there is flexibility and personalization offered
  • Virtual experiential events for small groups (culinary, entertainment, team building) will help with engagement and motivation
  • Virtual meetings must become more interactive to bring in and keep an audience or better yet be combined into a hybrid in-person event
  • Companies will look for unique ways to connect groups of people either in person or virtually
  • Companies will want to find easy-to-implement reward and recognition programs/awards

2020 showed us all how important it is to feel connected and appreciated. This critical lesson will continue to make the incentive industry instrumental in corporate culture going forward.

Performance Tracking Measurements

Many companies are still dealing with shutdowns, slowdowns and uncertainty that started in the spring of 2020. Our Motivation Excellence performance tracking team sees this as a perfect time to reevaluate existing program structures, data points and future goals.

“I believe clients are trying to understand the current customer activity and how that will ramp back up in 2021. Past trends and historical performance are out the window. New data points are needed to analyze what their channels need, are capable of, and how to support their customers in 2021,” says Bob Graham, VP, Client & Technology Solutions.

This down time might indeed lend itself perfectly to an introspective evaluation. Collaborating with an incentive company experienced in analytics is a helpful way to begin.  Having an outside company take a look at data, company trends and the competitive landscape often leads to company executives more fully understanding unique challenges and opportunities for success.

“I would like to see our industry embrace technology and data analytics and understand more the value of incentives and engagement. These are powerful tools that can help companies achieve and exceed their business objectives,” adds Brewer.

Successful incentive programs bring an emotional connection and commitment to participants. Part of using detailed analytics is to also look at participant types, demographics, performance history and potential for growth. Pairing the right set of program rules to the most motivating reward creates synergy for success for the participant AND the company hosting the program. Add in easy to access performance tracking for the participant and management and the engagement between all parties increases.

At Motivation Excellence, performance tracking includes user-friendly website design, detailed activity reports based on daily, weekly or monthly data processes and consistent communication to participants about what’s expected and how they can get there.  Trends we see for 2021 include:

  • Heavier reliance on technology to communicate, analyze and drive business
  • Renewed focus on the participant experience on program websites
  • Continued personalization and segmentation of communications and data reporting
  • More WFH flexibility leading to increased need for employee connections
  • Reevaluation of how to get market share/influence wanted behavior changes
  • Need for innovating ways to come out of 2020 stronger

The incentive industry is resilient. Personally, we’ve seen our trusted industry partners adapt and innovate to continue offering top notch service options for in-person and virtual gatherings. Safety protocols are meeting the needs of those wishing to travel and hope will rise as the general population gets access to a vaccine. In our own company, we developed new award options and aligned with similarly innovative partners to bring our clients the best resources available.

While our industry might not ever be the same, we have reason to believe it will be better than ever. Having gone through this pandemic will better prepare us to respond to a similar crisis in the future. Flexibility to adapt to changing circumstances and create alternative solutions quickly is beneficial to our clients and industry partners. The camaraderie of our industry is strong! The spirit and passion we all bring to incentives never dimmed, and you can bet it will shine brighter than before when we fully emerge from COVID-19.

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