IRF study signals change surrounding workforce engagement, data security and C-suite buy-in.
From market optimism to concerns about risk and safety, we’ve narrowed down key findings from the Incentive Research Foundation’s (IRF) 2019 Trends Study that will affect the workforce in 2019.
Mergers and acquisitions
According to the study, market growth will continue to push mergers and acquisitions on all fronts. Marriott’s acquisition of Starwood and AccorHotels’ purchase of FRHI in 2016 were high-profile examples. In 2018, Wyndham Worldwide bought La Quinta, Hyatt purchased Two Roads Hospitality, Mandarin Oriental became part of Waldorf Astoria, while Cvent merged with Lanyon, and Aventri (formerly eTouches) made three acquisitions over the past two years.
MICE business development manager at Singapore-based DMC 8th Wave, Atika Rosli, says following the Marriott-Starwood acquisition that travel advisors were threatened by commission cuts in the U.S., which were rumoured to be applied in Asia. Nevertheless, she believes there is a silver lining.
“The acquisition provides us with a greater opportunity to redeem our reward points. Overall, we feel that there are more benefits opened up to us planners,” Rosli says.
Consolidation is set to increase among incentive houses as well, following Creative Group’s acquisition of TPG; ITA Group acquiring Hartmann Studios, an experiential design and production agency; Pacific World being sold to TUI, and BI Worldwide acquiring Bunchball.
More security resources needed
Personal security and data security remain a top concern for buyers and sellers involved in planning incentive travel programmes. The 2018 Incentive Travel Industry Index by SITE Index, IRF Outlook and Financial & Insurance Conference Professionals (FICP) found that most buyers (68 per cent) and sellers (62 per cent) believe the threat of terrorism is a major concern.
When asked what measures a DMC can take to mitigate safety issues, Rosli says preparation and awareness is key.
“We also implement a risk analysis assessment and discuss a back-up plan with our clients when organising events in the APAC region. This boosts clients’ confidence in holding events in Asia with us,” she says.
However, participants are much more at risk of having their data stolen than they are of experiencing a terrorist attack. Following major data breaches at companies like Marriott International and Cathay Pacific, procurement representatives will need to ensure their constituencies are well versed in the mechanics of data security.
The European Union’s 2018 implementation of the General Data Protection Regulation (GDPR) and California’s Data Privacy Law (set to go into effect in January 2020) are most likely precursors to sweeping changes in data security, which will become paramount in the next five years.
Incentive travel on the rise
Incentive travel growth is supported by expanding budgets, increased participant eligibility, and improved internal and public perceptions of incentive travel programmes, according to the 2018 Incentive Travel Industry Index.
According to the report, executives are often confounded by culture because much of it is anchored in unspoken behaviours, mindsets, and social patterns. But when properly managed, culture can help leaders achieve change and build organisations that thrive, even in the most uncertain, disruptive, and complicated conditions.
One factor contributing to the rise of incentive travel is the C-suite’s growing realisation that profitable businesses employ strategic use of rewards and recognition. Increased executive buy-in and growing public awareness of the proven effectiveness of incentives are reflected in a more positive perception of incentive travel as compared to a decade ago.
In 2019, transformational travel will continue to push the experience economy further. Transformational travel proposes incorporating concepts of wellness, sustainability, community, and personal fulfilment to create highly memorable and authentic experiences, while connecting people with a deeper meaning that leads to personal growth.
These transformative experiences can come in highly designed formats, such NoshTrekker’s Plantation Table dining experience, where hosts not only curate a menu, but tie each part of the menu to their family history and story. However, experts such as Ralf Potts, author of Vagabonding Travel, note that transformative travel takes time and a sense of openness, which can’t be easily pencilled into a busy travel schedule.
Attention to detail and intimate understanding of the host culture is crucial. 8th Wave’s Rosli has had success creating local experiences across APAC through storytelling. These include a Bonsai workshop hosted in the personal home of a Bonsai Master, or a visit to the home of one of the last joss stick makers in Penang, who also shares stories about his life.
“Other than meaningful interactions, we also focus on the natural beauty of the region, quirky pop cultures, as well as heritage,” she says.
The full IRF 2019 Trends Study can be accessed here.
Main image: Team building exercise at Travel Incentives Meeting Events