IRF 2023 Trends Report: Challenges Ahead

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The Incentive Research Foundation 2023 Trends Report cites challenges and opportunities        The IRF 2023 Trends Report sees many opportunities despite economic and supplier issues.

“As we enter 2023, incentive, recognition, and reward programs will be expected to have broader reach and deeper impact,” said Incentive Research Foundation (IRF) President Stephanie Harris, citing the results of the recently released IRF 2023 Trends Report. “Program owners are charged with motivating a changing workforce while dealing with major disruptions, including inflation, uncertainty, ongoing supply chain issues, and limited inventory.”

The report drew on research collected from IRF studies including The Role of Incentives in Today’s Decentralized Workforce; Decision Drivers 2022; 2022 Incentive Travel Index; Incentive Expectations and Reality in the Hospitality Industry; Industry Outlook for 2023: Merchandise, Gift Cards and Event Gifting; and Incentive Travel Destination Preferences & Their Impact on Motivation—plus a 2022 year-end roundtable discussion with industry execs.  Among the findings:

• While the demand for incentive travel continues to come back, economic and staffing issues are forcing the scaling back of  programs. Compression in hotel inventory, hotel and DMC staff reductions and increased costs are common barriers to delivering an incentive trip on the same scale as 2019.

•The rising cost of air travel, combined with increases in delays, also continues to impact program budgets and attendees’ overall experience. Given increased costs across the board, planners are faced with defending bigger budgets to leadership.

•Popular incentive destinations are often in short supply, as is availability for pre-or post-program trips.

•As incentive travel programs rebound to meet pent-up demand, company expectations have increased. With added emphasis on employee retention and recruitment, the quality and impact of programs is clearly tied to corporate goals. Incentive travel needs to be more exciting, more exclusive, more experiential, more authentic, and more memorable than ever.

•Experience is is a top driver of destination choice, with a renewed emphasis on creating unique and memorable experiences. For example, private access to normally crowded venues, exclusive guides and inside stories, and meals in unexpected places all have higher perceived value for attendees.

• Program lead times are decreasing and last-minute decisions to move forward with a travel incentive are increasing.

•Non-cash reward programs such as gift cards, merchandise and points programs are not as hard-hit by inflation. While gift cards may not buy as much as they used to, receiving a non-cash reward can be a particularly welcome gesture when household incomes are stretched.

•Planners are being pressured to put together incentive programs on compressed schedules, and they expect suppliers to respond to RFPs within a few days.

•Covid has not completely gone away, and protocols are still subject to change.

•International programs are trending, with a rising demand for lesser known destinations.

•Having more downtime is now the number one priority of attendees.

•Sustainable practices are becoming more important and more prevalent in requests for proposals (RFPs), although cost remains a barrier.

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