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In times of economic uncertainty, recession fears can become self-fulfilling prophesies: cautious strategies edge over from prudence into phobia, and the capitalist conga line slows to a crawl. As broadcast media and the internet act as echo chambers for this phenomenon, playing on the deep concerns of managers and businesses and magnifying market ebbs into tidal waves, it falls to the managers on the ground to increase revenues even as their budgets are scrutinized and shrunk. Particularly as pertains to sales incentive programs, which are often spared the budgetary axe due to their inherent link to revenue generation, finding the destination that is both motivational and cost effective is especially critical during the current slowdown.
As businesses across the United States prepare for another economic scramble, marketing managers and meeting planners will join CFO’s and corporate travel executives – in fact, anyone with a say in their company’s financial wellbeing – in tightening the purse strings a little more. But while the knee-jerk reaction of cutting back (suddenly unnecessary) expenditures might seem to alleviate immediate financial woes and concerns, in the many industries that are fueled by employee performance and sales teams, aggressive revenue targets and a push to increase market share and customer affinity, cutting back on the very drivers that incentivize these markers can be detrimental to a company’s longevity and financial health. In fact, cutting back on incentives, meetings and corporate travel can be counter-productive and have exactly the opposite intended effect.
When push comes to shove, and selling and relationship-building become much tougher propositions in a tougher economic climate, employees and sales teams need more motivation, not less. In a survey conducted by Meetings & Conventions magazine, 65% of meeting planners need enticing venues for group incentive programs and sales meetings – which can be critical to motivating a sales force, especially in hard times. Cruise ships are not only ideally attractive venues, but are also an antidote to high priced meetings because of their all-inclusive cost structure. More than 38% of the average meeting spend is on food & beverage, entertainment, and A/V – all of which can be significantly reduced on a ship, where these items do not cost extra. In fact, using a cruise ship is one of the only ways that a meeting planner can still provide high level service, quality cuisine to suite everyone’s tastes, and an abundance of activities – without breaking the budget.
Landry & Kling, a South Florida based company that pioneered incentive travel and meetings on the seas, has seen similar patterns emerge before, having weathered economic storms for more than 25 years. The company’s co-founder and CEO, Joyce Landry, is one of the cruise industry’s foremost champions of onboard large-format meetings and corporate incentive programs at sea. “Maintaining sales production is critical to the health of any business, and we feel that cutting back in the motivation of sales teams is a mistake. We understand that meeting planners are charged with cost cutting, and are being asked to, among other things, limit food choices, minimize a/v cost, and eliminate decor. This isn’t even necessary on a cruise ship, where all of these items are included – at no additional cost. So, with a cruise ship, a meeting planner can both control the budget AND provide a motivating experience that will result in increased sales & profit…it’s a win-win solution,” says Landry.
While companies now find themselves focused on cost-saving measures, Landry says that corporate events at sea have always been a more competitive option, not just in “leaner” times. “In Europe, cruise travel has long been recognized as a very cost-effective option – for meetings and for leisure. Earlier this year, we analyzed the cost difference between a meeting held on a cruise ship and a traditional hotel-based meeting for 100 delegates. The result? A corporate meeting on a cruise-line offered almost in 40% savings, compared with a traditional well-known hotel venue. In the current economic climate, with the US dollar dwindling against the Euro, cruise meetings become even more attractive to European companies, and can be a cost-effective way to bring people together from multinational corporations with worldwide offices,” according to Landry.
Even in the face of this week’s Federal Reserve Board announcement, Landry & Kling believes that the cruise meeting segment will continue to flourish. The company’s staying power has allowed it some measure of perspective in the matter: since 1982, as hotels, resorts and airlines reacted immediately to market pressures, cruises have enjoyed continued growth. Smaller meetings, ones usually held in area hotels and local meeting spaces, tend to be sloughed off as unnecessary (as is happening right now), while the larger meetings critical to business development or incentive programs viewed as integral to employee retention go on, and these are the key market for cruise meetings.
While some meetings can be eliminated or conducted virtually, incentive meetings and incentive travel is different. When the economy is challenging, companies feel it is more important than ever to motivate sales people with “incentive” programs; if staff are accustomed to an incentive trip, using a plasma TV as the proverbial carrot-and-stick becomes highly ineffective. Instead, offering a sea-based event is an excellent solution to provide motivation and engagement, while providing greater cost-savings and value to the company.
So while the jury is still out on what the future holds for the US economy, for businesses, several factors will not change; the need to attract and retain top performers, the need to provide new ways to engage key audiences and clients, and importantly, a cost-efficient way to conduct meetings and seminars to large groups of people.
Landry says that while cruise events are perceived by attendees as a lot more costly, it is actually quite the reverse. For anyone organizing a meeting or event aboard a cruise ship, these events offer the option of a la carte or all inclusive, with less out of pocket expenses for attendees – which they will appreciate in tighter economic times.
Says an optimistic Landry: “Regardless of whether bad times are ahead, the financial benefits to holding meetings and events at sea are definitely there.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
