The Incentive Industry Trends 2014

Transcription

1 PULSE SURVEY The Incentive Industry Trends 2014 May 2014

2 Background and Survey Purpose 2 Beginning in August 2008 it was decided that an appropriate topic for the 2008 Pulse Survey would be an incentive industry trends outlook for the upcoming years and with the continued economic conditions, also an appropriate topic for the trends outlook for Given that the Incentive Research Foundation (IRF) is charged with advancing the science of incentives, it surveyed industry professionals to obtain their opinions about the more salient trends affecting the industry during To this end, the IRF asked these professionals questions on trends with regard to incentive travel programs, merchandise non-cash programs, and budget changes forecast for In addition to the current topic on industry trends, the IRF tracks core issues of continuing interest to the industry: The extent to which company financial forecasts influence incentive programs; The effect of competitor reactions on company incentive programs; and Sensitivity to others perceptions of company incentive programs.

3 Research Methods Invitations to participate in this online survey were sent to 2550 incentive providers, suppliers to the industry and corporate incentive travel buyers. 3 The 247 survey participants can be categorized 1 as follows Corporate (i.e./ Buyer, Planner, Sales, HR) (21.5%) Supplier (i.e./ Hotel, Airline, DMC, Merchandise) (13.8%) Third Party (i.e./ Incentive Company, Travel Agency, Consultant) (59.1%) I am not involved in incentive programs (5.7%) Data collection was conducted April15 th through May 2 nd, This question, and survey, was significantly modified to present the respondents with specific/logical questions based upon their selection.

4 (n=53) Findings indicate that the trends continue to stabilize this period compared to the previous survey periods which indicated a strong positive upward trend for each of the core issues beginning in July 2009 April The overall trends are nearing those reported in The positive trend continues with respect to the perceptions of the company s financial forecast influences the design and implementation of our incentive program(s) compared and the previous three survey periods. The perception of internal (nonincentive) stakeholders influence on the design of incentive programs increased significantly compared with November These questions were asked only of Corporate participants. Highlights: Core Issues 4 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 93% 84% 86% 75% 77% 81% 85%85% 75% 73% 74% 68% 74%75% 64% 63% 61% 64%69% 64% 61% 62% 52% 55% 56% 59% 47% 49% 40%39% 43% 42%41% 44%49% 48% 51% 45% 45% 40% 38% 31% 26% Sep-08 Oct-08 Mar-09 Jul-09 Nov-09 May-10 Oct-10 May-11 Oct-11 Mar-12 Sep-12 Apr-13 Nov-13 18% 9% The company financial forecast influences the design and implementation of incentive programs Competitors reactions to programs impact the products and services included in company incentive programs Perception of the Public significantly influences the design of our incentive program(s). * Perception of internal (non-incentive) stakeholders significantly influences the design of our incentive program(s). *Previously question was asked as; Sensitive to perceptions of program extravagance to the extent that it would impact the type of company program awards and inclusions May-14

5 Current Topic Industry Trends for 2011/ Incentive Travel Programs Merchandise Non-Cash Programs ROI Budget Considerations

6 Perceived Impact of the Economy on Ability to Plan and Implement Incentive Travel Programs 6 Respondents in the current survey (Spring 2014) indicate they continue to be optimistic and consider the economy as having a more of a positive impact on their ability to plan and implement incentive travel programs. (All positive 62% May 2014 vs. 69% November 2013) 43 No Answer Strongly Positive Somewhat Positive Have No Impact Somewhat Negative Strongly Negative Strongly negative 2% November 2013 vs. 0% May All negative impacts 17% November 2013 vs. 12% May In the coming year what impact will the economy have on your ability to plan and implement travel incentive programs? (N=180) Mar-09 Jul-09 Nov-09 May-10 Oct-10 May-11 Oct Mar Sep-12 Apr Nov-13 May-14 Note: The response categories were modified in the May 2011 and the historical data was adjusted to reflect these changes.

7 Perceived Impact of the Economy on Ability to Plan and Implement Incentive Travel Programs By Category 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4.5% 0.8% 15.0% 11.9% 13.6% 18.6% 52.5% 50.0% 55.1% 20.0% 31.8% 12.5% 13.6% Corporate Supplier Third Party Strongly Positive Somewhat Positive Have NO Impact 7 Comparing the perceived impact of the economy on the ability to plan and implement incentive programs by respondent category, we find: The Supplier and Third Party segments are significantly more likely to perceive the impact of the economy to have a more positive impact than the Corporate segment. Supplier 81.8% total positive Third Party 68.7% total positive. Somewhat Negative Stongly Negative

8 Perceived Impact of the Current Air Transportation Environment of Incentive Travel Programs 8 Most respondents (44%) have a negative perception of the current Air Transportation Environment and it s impact on incentive travel plans. The percent of negative responses has remained decreased 7% compared to November No Answer Strongly Positive Somewhat Positive Have No Impact Somewhat Negative Strongly Negative Significantly negative- 6% November 2013 vs. 5% May All negative perception- 52% November 2013 vs. 44% November What impact does the current air transportation environment have on your incentive travel program planning?(n=180) Mar-12 Sep Apr-13 Nov-13 May-14

9 Perceived Impact of the Current Air Transportation Environment of Incentive Travel Programs By Category 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 3.4% 22.5% 36.4% 45.8% 55.0% 22.7% 35.6% 27.3% 7.5% 11.9% 4.5% 3.4% Corporate Supplier Third Party 9 Comparing the perceived impact of the current air transportation environment on travel programs by respondent category, we find: The Supplier segment is significantly more likely to perceive the impact of the air transportation environment as more positive (31.8%) than the Corporate and Third Party segments. The Third Party segment is significantly more likely to perceive the impact as negative (49.2%) than the Corporate and Supplier segments. Significantly Positive Have NO Impact Slightly Positive Slightly Negative Significantly Negative

10 Techniques Used In Coming Year To The Air Transportation Portion Of Incentive Travel Programs, What Component? 10 45% anticipate that Only tickets will be provided, are to be included components of Incentive Travel Programs in the coming year. 37% indicate that All costs for air transportation will be provided. 11% indicate that Non-air options will be included. 8% indicate that seating upgrades will be included. >1% indicate that Airline club passes will be included In the coming year, do you anticipate any of the following changes will be made with regard to choices of incentive travel programs? Check all that apply. (n=233, multiple choice) Only tickets will be provided All costs for air transportation-related expenses will be included Non-air options (train, bus, driving allowances) will be use) Seating upgrades will be included Airline club passes will be included 0% 11% 8% 37% 45% 0% 50%

11 Techniques Used In Coming Year To The Air Transportation Portion Of Incentive Travel Programs, What Component? By Category Third Party respondents are more likely to use the following techniques than Corporate and Supplier segments: Only tickets will be provided. Seating Upgrades. Corporate respondents are more likely to use Non-air options techniques than Supplier or Third Party segments. 11 Only tickets will be provided All costs for air transportationrelated expenses will be included Non-air options (train, bus, driving allowances) will be use) Seating upgrades will be included Airline club passes will be included 24% 10% 3% 17% 10% 3% 8% 1% 0% 0% 52% 38% 36% 41% 38% 0% 20% 40% 60% Third Party Supplier Corporate

12 Trending of Techniques Used To The Air Transportation Portion Of Incentive Travel Programs 12 The inclusion of Only tickets will be provided has increased significantly since 2013 and the inclusion of All costs for air transportation related expenses has decreased slightly by 2% compared to November % 50% 40% 30% 20% 52% 42% 45% 28% 32% 22% 56% 53% 55% 52% 51% 30% 45% 38% 40% 36% 39% 37% 10% 0% Only tickets will be provided All costs for air transportation-related expenses will be included

13 Anticipated Changes In Coming Year With Regards To Incentive Travel Program Destinations 13 Most of the respondents (40%) anticipate no change with respect to the program destinations for Incentive Travel Programs in the coming year. No change Will pick locations closer to "home" 12.4% 40.3% 12% Will pick locations closer to home with regards to the travel program destinations. 15% indicate that they anticipate a change from International to Domestic, and, 19% anticipate a change from Domestic to International with regards to the travel program destinations From international to domestic From domestic to international From land to cruise 14.6% 18.9% 9.9% From cruise to land 5.2% In the coming year, do you anticipate any of the following changes will be made with regard to incentive travel program destinations? Check all that apply. (n=233, multiple locations) 0% 10% 20% 30% 40% 50%

14 Anticipated Changes In Coming Year With Regards To Incentive Travel Program Destinations By Category Most of the Corporate and Third Party segments anticipate no changes to program destinations. Third Party and Supplier segments anticipate more changes than the Corporate segment in the following: From international to domestic From domestic to international From land to cruise 14 No change Will pick locations closer to "home" From international to domestic From domestic to international From land to cruise From cruise to land 43.8% 14.7% 47.2% 13.7% 20.6% 3.8% 9.6% 32.4% 17.0% 19.9% 23.5% 13.2% 13.0% 11.8% 0.0% 4.1% 11.8% 3.8% 0% 10% 20% 30% 40% 50% Third Party Supplier Corporate

15 Trending Anticipated Changes With Regards To Incentive Travel Program Destinations 15 There has been a significant decrease in program destinations from International to Domestic since Compared with November 2013, all components are reporting similar results. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 42% 28% 26% 23% 19% 19% 15% 16% 14% 11% 15% 16% 18% 17% 19% 16% 13% 15% 9% 10% 10% 12% 7% 2% 6% 5% 4% 5% 6% 10% 7% 7% 5% 3% 4% 3% 1% 3% From cruise to land From domestic to international Will pick locations closer to "home" From land to cruise From international to domestic

16 Anticipated Changes In Coming Year With Regards To Incentive Travel Accommodations 16 16% percent of respondents anticipate a change to all inclusive pricing options for the accommodations portion of Incentive Travel Programs in the coming year. No change Change to "all inclusive" pricing options Total number of days/nights reduced 16% 14% 27% Number of rooms reduced 12% 27% indicate No Change 14% indicate the Total number of days/nights will be reduced. 12% indicate that the Number of rooms will be reduced and on-site inclusions per participant be decreased. Total number of rooms increased On-site inclusions per participant increased On-site inclusions per participant decreased Total number of days/nights increased Don't Know 11% 9% 9% 9% 5% In the coming year, what changes, if any, will be made with regard to accommodations for incentive travel programs? Check all that apply.(n=233, multiple response) Number of room upgrades reduced Number of room upgrades increased 4% 4% 0% 10% 20% 30%

17 Anticipated Changes In Coming Year With Regards To Incentive Travel Accommodations By Category Most of the Corporate and Third Party segments anticipate no changes to program destinations. Third Party respondents anticipate more changes with travel accommodations than the Corporate segment within all areas. 17 No change Change to "all inclusive" pricing options Total number of days/nights reduced On-site inclusions per participant decreased Don't Know Number of rooms reduced Total number of rooms increased 27.4% 19.9% 17.0% 18.5% 9.4% 11.6% 7.5% 5.5% 7.5% 17.1% 3.8% 15.8% 3.8% 41.5% Total number of days/nights increased 12.3% 3.8% Number of room upgrades reduced 5.5% 3.8% On-site inclusions per participant increased 0.0% 15.1% Number of room upgrades increased 6.8% 0.0% 0% 10% 20% 30% 40% 50% 3rd Party Corporate Suppliers were not asked this question.

18 Trending Anticipated Changes With Regards To Incentive Travel Accommodations 18 The anticipated reduction of both components with regards to hotel accommodations has stabilized compared to the past four survey periods. 60% 50% 40% 30% 52% 47% 40% 28% 41% 42% 32% 30% 20% 15% 19% 21% 18% 16% 14% 13% 14% 11% 12% 10% 0% Total number of days/nights reduced Number of rooms reduced

19 Anticipated Changes In Coming Year With Regards To Sponsored Non-Meal Related Components 19 Fifty-nine percent (51%) of respondents anticipate No Change with regards to Sponsored Non-Meal Related Components for Incentive Travel Programs in the coming year. Significant reduction Moderate reduction 1% 17% 17% indicate that Sponsored Non- Meal related components will be Moderately Reduced, and 28% indicated that Sponsored Non- Meal related components will be Moderately Increased. No change Moderate increase 28% 51% Significant increase 4% With regard to the sponsored (paid by your company) nonmeal related components such as airline tickets, transfers, gifts, etc for incentive travel programs, what changes will be made in the coming year? (n=158) 0% 20% 40% 60%

20 Anticipated Changes In Coming Year With Regards To Sponsored Non-Meal Related Components By Category 20 Both Corporate and Third Party respondents anticipate a moderate increase for Sponsored Non-Meal related components. Significant reduction Moderate reduction 0.0% 5.0% 16.9% 15.0% No change 50.8% 50.0% Moderate increase 28.8% 25.0% Significant increase 3.4% 5.0% 0% 20% 40% 60% Third Party Corporate Suppliers were not asked this question.

21 Anticipated Changes With The Involvement Of Procurement And Purchasing In Travel Incentive Programs 21 Most of the respondents (47%) anticipate No Change with regards to involvement of procurement and purchasing for Incentive Travel Programs in the coming year, 48% agree that procurement involvement will increase by some degree in the coming year. 36% indicate that procurement and purchasing involvement will Moderately Increase in the coming year. 12% indicate that procurement and purchasing involvement will Significantly Increase in the coming year. Significantly decrease Moderately decrease Remain unchanged Moderately increase 2% 3% 36% 47% Significantly increase 12% In the coming year, do you anticipate the involvement of procurement and purchasing with regard to your incentive programs to (n=180) 0% 20% 40% 60%

22 Anticipated Changes With The Involvement Of Procurement And Purchasing In Travel Incentive Programs By Category Corporate respondents are more likely to anticipate the involvement of procurement and purchasing in travel incentive programs to remain unchanged when compared with Supplier and Third Party Respondents Supplier respondents are more likely to anticipate the involvement of procurement and purchasing in travel incentive programs to significantly increase when compared with the Corporate and Third Party segments. Third Party respondents are more likely to anticipate the involvement of procurement and purchasing in travel incentive programs to significantly decrease/moderately decrease when compared with the Corporate and segment % Significantly decrease 0.0% 0.0% 3.4% Moderately decrease 0.0% 5.0% 40.7% Remain unchanged 50.0% 65.0% 40.7% Moderately increase 36.4% 20.0% 11.9% Significantly increase 13.6% 10.0% 0% 20% 40% 60% 80% Third Party Supplier Corporate

23 Anticipated Changes In Incentive Travel Program Budgets for This Year 23 Forty-nine percent (52%) of the respondents anticipate budgets for Incentive Travel Programs to Moderately Increase this coming year. 13% indicate that budgets for Incentive Travel Programs will decrease by some degree in the coming year. 32% indicate that budgets for Incentive Travel Programs will remain unchanged this coming year. Significantly decrease Moderately decrease Remain unchanged Moderately increase 1% 12% 32% 52% Significantly increase 3% In the coming year, do you anticipate budgets for incentive travel programs in general to (n=180) 0% 20% 40% 60%

24 Anticipated Changes In Incentive Travel Program Budgets for This Year By Category Third Party and Supplier respondents anticipate travel incentive program budgets to remain unchanged, when compared with the Corporate segment. Corporate respondents anticipate that travel incentive program budgets will moderately increase when compared with Third Party respondents. 24 Significantly decrease Moderately decrease Remain unchanged Moderately increase 0.0% 0.0% 5.0% 11.0% 22.7% 7.5% 32.2% 45.5% 25.0% 53.4% 31.8% 57.5% Significantly increase 3.4% 0.0% 5.0% 0% 20% 40% 60% 80% Third Party Supplier Corporate

25 Trend Strategy For The Consideration Of Award Strategy Moving (Either Temporarily Or Permanently) From "Group Trips" To "Individual Travel Packages" 25 The majority (72%) of the respondents anticipate no changes (either temporarily or permanently) from "group trips" to "individual travel packages" in the coming year. A combined 12% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages in coming year to decrease. 16% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages to increase in the coming year. Significantly decrease Slightly decrease Remain unchanged Slightly increase 3% 9% 13% 72% Significantly increase 3% With regard to planning and implementing incentive travel award programs, do you anticipate the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages" to n=180) 0% 20% 40% 60% 80%

26 Trend Strategy For The Consideration Of Award Strategy Moving From "Group Trips" To "Individual Travel Packages" By Category Supplier respondents indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages to slightly decrease in the coming year when compared with the Corporate and Third Party segments. 26 Significantly decrease Slightly decrease Remain unchanged 1.7% 9.1% 0.0% 10.2% 18.2% 5.0% 72.9% 54.5% 77.5% Slightly increase 11.9% 18.2% 12.5% Significantly increase 3.4% 0.0% 5.0% 0% 20% 40% 60% 80% 100% Third Party Supplier Corporate

27 Geographic Region Chosen as Destinations" for Incentive Travel Program(s) % of the respondents indicated that North America was their chosen region for Incentive Travel Destination programs. North America Europe Caribbean 41% 41% 49% Top regional destinations include: The Caribbean (41%) Europe (41%) Central America (17%) South America (15%) ASIA (15%) Central America South America Asia Africa Not Applicable 17% 15% 15% 10% 5% In the coming year, please indicate which geographic region you will choose as your "destinations" for your incentive travel program(s). (n=233) Middle East 5% 0% 20% 40% 60%

28 Geographic Region Chosen as Destinations" for Incentive Travel Program(s). By Category Third Party respondents are significantly more likely to choose the following destinations than Corporate respondents: North America Europe Caribbean Central & South America ASIA 28 North America Europe Caribbean Central America South America Asia 23% 13% 19% 15% 19% 13% 49% 61% 40% 51% 40% 51% Africa 12% 9% Not Applicable 5% 9% Middle East 5% 8% 0% 20% 40% 60% 80% 3rd Party Corporate Suppliers were not asked this question.

29 Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs 29 In May 2014, respondents continue to anticipate the impact of the economy to have a positive effect on their ability to plan and implement merchandise non-cash incentive programs potentially indicating a positive trend in the coming year No Answer Moderatel positive Moderately negative Significantly Positive Have No Impact Signficantly Negative Negative impact 11% in May 2014 vs. 13% in November No impact 42% in May 2014 vs. 31% in November Positive impact 48% in May 2014 vs. 56% in November Do you anticipate budgets for merchandise non-cash incentive programs in the coming year to (n=144) Note: The response categories were modified in the May 2011 and the historical data was adjusted to reflect these changes.

30 Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs By Category 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 15.8% 10.3% 40.2% 66.7% 39.5% 26.3% 42.3% 33.3% 18.4% 7.2% Corporate Supplier Third Party Significantly Positive Moderately Positive 30 Comparing the perceived impact of the economy on the ability to plan and implement Merchandise Non-Cash incentive programs by respondent category, we find: The Corporate and Third Party segments are significantly more likely to perceive the impact of the economy to have a more positive impact than the Third Party segment. Corporate 44.7% total positive Supplier 49.5% total positive. Have NO Impact Moderately Negative Significantly Negative

31 Anticipated Changes This Year With Regards To Merchandise Non-cash Incentive Programs Award Selections 31 17% of the respondents anticipate Included experience-related (SPA, event tickets, etc.) in the coming year with regards to Non-Cash Incentive Program Award Selections 21% indicate No change to the merchandise non-cash incentive program this year. 16% indicated Increased use of debit/prepaid gift cards. 14% indicated Added merchandise and Included individual travel as an option. 12% indicated increased merchandise award value and added debit/prepaid gift cards. With regard to merchandise non-cash incentive programs, what changes,, will be made this year with award selections? Select all that apply. (n=233) No change Included experiencerelated (SPA, event Increased use of debit/prepaid gift cards Added merchandise Included individual travel as an option Increased merchandise award value Added debit/prepaid gift cards Decreased merchandise award value Decreased use of debit/prepaid gift cards 4% 4% 9% 14% 14% 12% 17% 16% 21% 0% 10% 20% 30%

32 Anticipated Changes This Year With Regards To Merchandise Non-cash Incentive Programs Award Selections By Category Third Party respondents are significantly more likely to anticipate the following changes to merchandise non-cash award selection than Corporate respondents: Included experience-related (SPA, event tickets, etc.) as an option Increased use of debit/prepaid gift cards Included individual travel as an option Added debit/prepaid gift cards Increased merchandise award value debit/prepaid gift cards 6% 32 Included experience-related (SPA, event tickets, etc.) as No change Increased use of debit/prepaid gift cards Included individual travel as an option Added merchandise Increased merchandise award value Added debit/prepaid gift cards Decreased merchandise award value Decreased use of 0% 8% 8% 5% 6% 4% 20% 17% 17% 15% 16% 11% 14% 19% 24% 23% 28% 0% 10% 20% 30% 3rd Party Corporate Suppliers were not asked this question.

33 Merchandise Types Used Within Reward and Recognition Programs 33 Electronics (43%), Jewelry/Watches (33%), and Open Card (36%) are the most common merchandise used in Reward and Recognition Programs. Other popular merchandise types identified by the respondents are: Golf Items (32%) Clothing/Apparel (31%) Housewares (30%) Luggage (29%) What types of merchandise are you using within your reward and recognition program? Select all that apply (n=233) Electronics 43% Jewelry/Watches 37% Open Card 36% Golf Items 32% Clothing/Apparel 31% Housewares 30% Luggage 29% Office Accessories 27% Closed Card 26% Plaques/Trophies 24% Restricted Card 23% Food 23% Flowers 13% 0% 20% 40% 60%

34 Merchandise Types Used Within Reward and Recognition Programs By Category Third Party respondents are significantly more likely to use all of the listed merchandise awards, except Jewelry/Watches, Clothing/Apparel, Housewares, Office Accessories and Plaques/Trophies when compared with the Corporate respondents. 34 Electronics 52% 47% Open Card 30% 46% Jewelry/Watches 40% 49% Golf Items 39% 32% Luggage 36% 28% Closed Card 17% 35% Clothing/Apparel 34% 43% Housewares 34% 38% Restricted Card 17% 31% Office Accessories 28% 40% Food 27% 25% Plaques/Trophies 25% 38% Flowers 8% 19% 0% 20% 40% 60% 3rd Party Corporate Suppliers were not asked this question.

35 Use of Points Based System for Merchandise Non-Cash Incentive Programs 35 A majority (78%) of the respondents indicate they use a points based system for their Merchandise Non- Cash Incentive program(s). 22% indicated they do not use a points based system. Compared with November 2013, slightly less respondents (5%) indicate the use of a Points Based System for Non- Cash incentive programs. Third Party respondents are significantly more likely to use a points based system than the Corporate and Supplier respondents. Do you use a "points-based" system for your merchandise non-cash incentive program? (n=144) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 100% 80% 60% 40% 20% 0% 78% 83% 64% 22% 17% 36% 82% 74% 18% 26% 48% 40% 12% 0% 0% 0% 0% 0% May-14 Nov-14 Apr-13 Sep-12 Mar-12 Oct-11 Yes No Don't Know 55% 56% 45% 44% 89% 11% Corporate Supplier Third Party Use a "Points Based Reward System" DO NOT Use "Points Based Reward System"

36 Anticipated Changes In Non-Cash Incentive Program Budgets for This Year 36 Fifty-one percent (51%) of the respondents anticipate budgets for Non-Cash Incentive Programs to Remain unchanged this coming year. 9% indicate that budgets for Non- Cash Incentive Programs will decrease by some degree in the coming year. 42% indicate that budgets for Non- Cash Incentive Programs will increase by some degree in the coming year. Significantly decrease Moderately decrease Remain unchanged Moderately increase 1% 8% 38% 51% Significantly increase 4% Do you anticipate budgets for non-cash incentive programs in the coming year to...(n=144) 0% 20% 40% 60%

37 Anticipated Changes In Non-Cash Incentive Program Budgets for This Year By Category % 90% 80% 70% 60% 50% 40% 30% 20% 2.6% 13.2% 66.7% 55.3% 23.7% 33.3% 6.2% 47.4% 43.3% Comparing the anticipated changes in Non-Cash incentive program budgets by respondent category, we find: The Third Party respondents are significantly more likely to anticipate changes in Non-Cash incentive program budgets to be positive compared to Corporate and Supplier segment. 10% 0% 5.3% 3.1% Corporate Supplier Third Party Corporate 29% total positive. Third Party 46.4% total positive. Significantly Positive Have NO Impact Moderately Positive Moderately Negative Significantly Negative

38 Anticipated Changes Incentive Program Elements 38 In general, respondents indicated that they anticipate most incentive program elements to remain the same in the coming year. The Number of total qualifiers is the element that has the highest reported increase in the coming year at 38%. The following elements received Increased ratings of greater than 20% for the coming year: Awards budget (34%) Incentive program non-meal components (20%) Third Party/Incentive Company Involvement (20%) This year, do you anticipate the following incentive program elements will increase, decrease or remain the same? (n=228) Number of total qualifiers Awards budget Incentive program non-meal components Third Parth/Incentive Company involvement Communications budget Incentive program on-site gifts Third Party/Incentive Company management Administration budget 15% 10% 7% Per diem cash allowances 4% 20% 20% 19% 38% 34% 53% 54% 61% 58% 57% 71% 64% 45% 51% 11% 14% 4% 11% 5% 9% 13% 8% 15% 12% 5% 20% 12% 15% 15% 15% 7% 32% 0% 20% 40% 60% 80% 100% Increase Remain the Same Decrease No Answer

39 General Issues Of Interest to the Industry 39 Budget Changes for Incentive Program Elements

40 Impact on Incentive Program As A Result Of The Current Economic Conditions 40 39% of the respondents anticipate no changes to the budget for Incentive Programs in the coming year as a result of the recent economic conditions. 30% indicate that budgets for Incentive Programs have increased as a result of the recent economic conditions. 18% indicate that that budgets for Incentive Programs have been reduced as a result of the recent economic conditions. 11% indicate no budget change, but reduced the component and added or increased a merchandise incentive program component. 3% Eliminated to program entirely. No changes Increased the budget Reduced the budget No budget change, but reduced the travel component and added or increased a merchandise incentive program component Eliminated the program entirely No budget change, but replaced the travel incentive 18% 11% 3% 0% 30% 39% As a result of the recent economic conditions, have you made a change to your upcoming incentive program, and if so have you (n=199) 0% 20% 40% 60%

41 Use of Enhancement Tools/Techniques for Incentive Programs 41 Slightly more than half of the respondents (53%) indicate they use Social Media tool/techniques to enhance their incentive program. Social Media Gaming Techniques 36% 53% 36% indicate the use of CSR components and Gaming techniques. CSR components (Corporate Social Responsibility) No Answer 25% 36% Integration with Sales Management Tools (salesforce.com, etc.) 19% Are you using any of the following to enhance your programs? (Check all that apply) (n=233) Virtual elements 17% 0% 10% 20% 30% 40% 50% 60%

42 Trending of Enhancement Tools/Techniques for Incentive Programs 42 All components showed decreases in the enhancement of incentive programs compared to November 2014 as an enhancement tool for incentive programs. CSR Components, Integration with Sales Management Tools and Virtual Elements each have significant decreases as enhancement tools when compared with November Are you using any of the following to enhance your programs? (Check all that apply) (n=233) Social Media Gaming Techniques CSR components (Corporate Social Responsibility) Integration with Sales Management Tools (salesforce.com, etc.) Virtual elements 56% 74% 62% 55% 63% 53% 19% 33% 36% 26% 37% 36% 44% 57% 48% 39% 47% 36% 14% 37% 27% 29% 27% 19% 23% 31% 26% 26% 29% 17% 0% 20% 40% 60% 80% October-11 March-12 September-12 April-13 November-13 May-14

43 General Perceptions of the Coming Year 43 The majority of respondents (71%) perceive The Economy to be either Slightly or Extremely positive in the coming year. The Economy (n=225) Incentive Group Travel (n=221) 6% 10% 65% 47% 11% 16% 1% 30% 10% 3% While the outlook on the Economy is generally positive, 17% of the respondents also indicate a negative perception of the economy in the coming year. In general, over 35% of the respondents perceive Slightly Positive/Extremely Positive views with respect to each of the areas measured. Merchandise Awards (n=207) Pre-Paid Gift Cards (n=203) Individual Travel (n=212) 9% 7% 8% 35% 32% 27% 44% 46% 54% 10% 2% 11% 4% 8% 3% As you look ahead to the coming year, what is your view of the following. (n=see chart) 0% 20% 40% 60% 80% 100% Extremely Positive Slightly Positive NO Change Slightly Negative

44 Goals & Objectives used to Determine Incentive Payouts and Measurement of Success 44 The majority (89%) indicated that goals/objectives are used to determine incentive payouts. Most respondents (65%) indicate that they use Results assessment (ROI, etc.) to determine a programs success. Only 4% of the respondents indicated they have no method to determine a programs success. Results assessment (ROI, etc.) Top Line Sales Budget Achievement Participant feedback (i.e., survey, focus groups, etc.) 65% 63% 54% 49% Other 8% Which of the following is used to determine a program s success? : (n=233) None 4% 0% 10% 20% 30% 40% 50% 60% 70%

45 Primary Reason For Ending An Incentive/ Recognition Program 45 Slightly less than half of the respondents (47%) indicated that they have not ended a program. Have not ended a program Lost executive support 24% 47% 24% indicated they lost executive support. 15% indicated there was no budget. 11% indicated lack of results. No budget Lack of results 11% 15% Participant feedback (Survey, Focus Groups, etc.) 3% Met specific goals and program is no longer needed 1% What is the primary reason for ending an incentive/ recognition program? (n=228) Other 0% 0% 10% 20% 30% 40% 50%

46 Frequency of Results Analysis and Program Design Element Changes 46 Thirty percent (31%) of the respondents indicated that they analyze results and program design elements Annually during a programs duration. 5% indicated that they never analyze results and program design elements during a programs duration. 28% analyze results and program design elements 3-4 times during a programs duration. Never Only when requested by management Annually 3-4 times during the program duration 5% 19% 28% 31% 1-2 times during the program 18% When running an incentive program, how often are results analyzed and program design elements are changed? (n=228) 0% 5% 10% 15% 20% 25% 30% 35%