The level of senior management influence in the decision-making process continues to decrease, with 47% of respondents reporting that the decision maker is at a higher level of management. Overall, the responses reflect that corporate expenditures require more levels of approval during difficult economic times.
How have purchasing practices for incentive and motivational travel programs changed in recent years? This and related questions were the focus of a joint research study conducted by the Site International Foundation and IMEX, the worldwide exhibition for incentive travel, meetings and events. Utilizing the combined databases of The Site Index Panel and the IMEX Group, the study asked industry professionals to comment on their experiences in purchasing motivational travel.
According to Jane E. Schuldt, CITE, CIS, Site International Foundation 2013 President, “The results of this joint study on purchasing practices for motivational travel programs were very informative, lending credence to what many practitioners have been experiencing anecdotally. Behaviors throughout the supply chain are heavily influenced by the economy, with actions and decisions continuing to be subjected to close scrutiny by the customer. Taking the findings into account, Site members and clients should immediately adapt their processes and strategies to mitigate the negative impact and enhance the opportunities inherent with change.”
Of the 102 study participants, 58% represented 22 countries and 41% were from the United States, with more than 90% of the respondents identifying themselves as service providers. Due to the large preponderance of suppliers, the survey results strongly reflect their concerns and the indecision generated by uncertainty in the state of the worldwide economy.
Over the past few years, trends indicate that decision making is becoming more complicated and now may include corporate procurement, senior management and compliance departments when selecting and purchasing incentive travel.
Fifty-five percent (55%) of respondents identified corporate procurement or purchasing departments as having an even stronger influence than previously reported in the Site Index Annual Surveys in 2010 and 2011. The level of senior management influence in the decision-making process continues to decrease, with 47% of respondents reporting that the decision maker is at a higher level of management. Overall, the responses reflect that corporate expenditures require more levels of approval during difficult economic times.
The lead time for responding to a Request for Proposal (RFP) continues a now-familiar trend. Sixty-three percent (63%) of study participants claim to have even less time to respond than in the past. Purchasers of motivational travel should be concerned with the decrease in RFP response time and the complicated decision-making process for the potential negative effect it can have on the quality and value of the final product.
The bane of all suppliers – requests for corporate-required competitive bids – are reported by 65% of respondents as the main cause for losing out on a bid. The second most common reason cited was price, at 53%. However, suppliers should note that 72% of purchasers identified level of service as the most significant factor in deciding to change suppliers, with 44% deciding to replace suppliers due to price.
“It is no surprise that ongoing uncertainty in the worldwide economy continues to affect the decision-making process surrounding incentive travel programs. The industry’s continued commitment to helping stakeholders understand the true underlying ROI and value of such programs has never been more important,” commented Carina Bauer, CEO, IMEX Group. “As such, IMEX is delighted to be able to partner with the Site International Foundation on research which helps us to better understand the decision-making process and how to improve for the future.”
The survey also explored the selection of destinations outside the program sponsor’s home country and the use of second-tier destinations, low-cost airlines, trains, cruise lines and all-inclusive destinations. To obtain a full copy of the Purchasing Motivational Travel Executive Summary go to Site Global.
The survey was supervised by Scott A. Jeffrey, Ph.D., Monmouth University, and Marion Joppe, Ph.D., University of Gelph.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
