Travel incentives are a reward subset of an

incentive program An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees ...

, recognition program or a

loyalty program A loyalty program or rewards program is a marketing strategy designed to encourage customers to continue to shop at or use the services of one or more businesses associated with the program. Single-company vs. coalition programs Loyalty progr ...

, which is a business tool designed to change

consumer behavior Consumer behaviour is the study of individuals, groups, or organisations and all activities associated with the purchase, use and disposal of goods and services. It encompasses how the consumer's emotions, attitudes, and preferences affe ...

to improve profit,

cash flow Cash flow, in general, refers to payments made into or out of a business, project, or financial product. It can also refer more specifically to a real or virtual movement of money. *Cash flow, in its narrow sense, is a payment (in a currency), es ...

employee engagement Employee engagement is a fundamental concept in the effort to understand and describe, both qualitatively and quantitatively, the nature of the relationship between an organization and its employees. An "engaged employee" is defined as one who ...

and customer engagement. It has been described as business travel that is designed to motivate or trigger action, as a reward for these actions from employees or business partners. This fosters loyalty and encourages the best talent for an organisation. When an organization properly designs an incentive program, which includes looking at all departments which will be affected, rather than just the impact to the department that is sponsoring the incentive, the return on investment can be proven. Oxford Economics USA wrote in a 2009 study that incentive travel investments yielded a return of investment of more than $4:$1. And stated that in order to achieve the same effect of incentive travel, an employee’s total base compensation would need to be increased by 8.5%. The Incentive Research Foundation released a study in 2010 following the steps that an organization took to ensure that they received a return on their investment; they successfully merged acquired organizations into their company, and successfully merged their incentive programs.

Economic impact

Incentive trips, meetings and events account for 15% of all travel spending, which creates 2.4 million jobs, $240 billion in spending and $39 billion in tax revenue, according to the U.S. Travel Association. Incentive travel generates about $13 billion a year, according to the Incentive Research Foundation. The economic impact and the AIG effect had negatively affected incentive travel programs in 2010, with spending on incentive travel being reduced.

References

{{Customer loyalty programs Customer loyalty programs Types of travel

Economic impact

See also

References