A piece of the corporate travel segment incentivizes employees to perform their best and incentivizes hotel companies to deliver on the rewards.

Incentive travel, which companies use to reward employees for achieving sales milestones or other goals, is on the rise. As more meetings and sales calls are held via videoconferencing and the number of business trips declines, an incentive trip begins to look more appealing than a cash bonus to some employees.

“You can throw bonuses at employees and all kinds of extras, but travel is the most powerful motivator,” said Janel Carnero, a luxury travel adviser with the Embark Collective.

Previously, Carnero was a regional manager for a hotel management company operating several brands and also worked as an executive with a shipping company where she always used incentive travel for her employees.

Pamela Ezeta, who works in global group sales at The Leading Hotels of the World, said 2023 was “a phenomenal year for incentive travel.” She added her company generates a lot of business in the incentive travel market.

With a greater number of workers in remote positions, there's a need for deeper connection through travel, Ezeta said. Employees see incentive trips not just as an opportunity to be rewarded, but “an opportunity to connect at a human level with their fellow incentive trip winners and leadership.”

Incentive travel is “an awarded luxury” to a company’s top performers, said Catherine Demont, events director at The Londoner in London, a member of Preferred Hotels & Resorts. It is particularly popular with large U.S.-based corporations. The key factor with these travel programs is “demonstrating truly memorable, money-can’t-buy experiences to the lucky winners.”

According to a report published last year by Allied Market Research, the global incentive travel market garnered $42 billion in 2021 and is estimated to generate $216.8 billion by 2031 with a compound annual growth rate of 12.1% from 2022 to 2031. The 2023 Incentive Travel Index from the Incentive Research Foundation reported that 53% of senior leaders consider incentive travel a “need to have,” 48% call it an “essential strategic differentiator,” and only 13% see it an area to trim or cut. The largest expense expected in 2024 for incentive travel programs is for hotels, according to IRF, which should represent 25% of total budget allocation. Airfare will comprise 22%, followed by food and beverage spending at 18% and activities at 13%.

The IRF research showed that incentives are a strong differentiator in recruiting and retaining employees. Retaining talented employees was a primary reason behind incentive travel’s strategic importance, according to 90% of respondents in the 2023 Incentive Travel Index.

Throughout the hotel industry, there's plenty of demand for incentive travel, said Kristen Lindgren, vice president of sales and marketing operations at Sage Hospitality Group, a management company specializing in lifestyle hotels. Most of Sage’s incentive business books through consortia and wholesale partners, she said, and those segments were up 12% year over year in March, and up 21% year over year in February. Companies that may have scaled back or even eliminated incentive trips are bringing them back and those employees are geared up to travel.

Incentive travel at Four Seasons Hotels and Resorts is experiencing robust demand globally, said Anne Mansfield, senior vice president of sales. She added an increasing number of programs being considered in the Asia-Pacific and Europe, Middle East, and Africa regions. In recent years, incentive travel has seen a greater focus on ultra-personalized experiences, wellness, sustainability and immersive experiences.

Hilton has seen incentive travel demand come “roaring back” over the last few years, said Gerilyn Horan, vice president of group sales and strategic accounts. In the first half of 2023, group bookings at Hilton's all-inclusive resorts increased by double digits year over year, led by Hilton La Romana, an all-inclusive family resort in the Dominican Republic.

Hotel operators frequently work with incentive specialists to ensure they are maximizing the segment’s potential.

Sage Hospitality works directly with travel management companies, wholesalers and travel advisory consortias — the entities that tend to book these groups. Lindgren said they specialize in building out their entire incentive program, “and we want it to make it easy for them to do business with us.”

Hilton drives incentive travel by partnering closely with agencies dedicated to procuring and creating memorable trips for their customers and with corporate customers to understand their specific needs, Horan said. The company also participates in industry organizations that focus on incentive business and have leadership roles on several incentive-focused boards.

But hotels also create their own incentive teams. Demont said The Londoner has a generous package designed to incentivize group travelers. The hotel also benefits from a location in the heart of the city, “perfect for people who want to explore central London.”

Four Seasons has access to experiences that are exclusive to the brand, which means that in-house teams are experts at crafting both on- and off-property experiences, drawing from their deep connections in the local community to ensure groups uncover each destination in unique and authentic ways, Mansfield said.

As with other segments post-pandemic, incentives have seen new approaches based on changing customer behavior — specifically wellness, connection with colleagues and locals, and a heightened emphasis on experiences.

Jodi Fernandez, director of sales for Wellbeing Collective at Hyatt Hotels Corp., said when planners host meetings or events at one of Hyatt’s Wellbeing Collective properties, a salesperson may suggest more free time be built into the agenda so it’s a little less structured. Even when there are coordinated group activities, providing choice or alternative activities allows for personal exploration.

Hyatt views this shift as “well-being incentive travel,” Fernandez said, where self-care has become a priority to empower guests and colleagues to feel rewarded with rest, well-being and discovery.

To truly inspire participants, Four Seasons has seen a reevaluation of incentive travel programming to foster a deeper sense of belonging and personalization to reenergize and connect team members, Mansfield said. Guests participating in incentive travel don't just want a financial incentive or a fun program anymore.

“They want to be rewarded with something truly extraordinary, something they wouldn't have access to otherwise,” Mansfield said. “We’ve seen that flexibility is key as the desire for less structured itineraries and more downtime can afford more meaningful face-to-face interactions between colleagues in an era of reduced office time.”

The ability to take over an entire Four Seasons property through an exclusive booking or buyout is one way planners are maximizing incentive travel experiences, Mansfield said. She added that transforming a property into your very own “is an incredible way to create community and foster greater connection during these programs.”

As the demand for in-person meetings, events and incentives continues to rise, it is increasingly important to keep attendees engaged to make the most out of their time spent together, Horan said. In response to the global interest in incentive business, Hilton launched the Hilton Incentive Collaborative, which “directly addresses curated offers with purpose and experiences that bring the local culture into events,” she said. This program offers preset incentive event experiences that customers can select from when planning to meet the needs of their group and elevate their program.

Given food and beverage is an integral part of well-being, Horan said planners are also rethinking how incentive event menus are put together; there's definitely an increased interest in options that promote health and creativity. Specifically, planners have shown a heightened focus on dishes with locally sourced ingredients, as well as vegan, vegetarian and gluten-free options to cater to guests’ dietary needs.

Fernandez said Hyatt “likes to encourage guests to connect with new cultures and communities, relish the arts, open their bodies and minds to restorative experiences, and take unique adventures to explore and reconnect with nature around them.” This might include an olive oil tasting at La Zambra Resort in Andalucia, Spain, or Miraval Berkshires’ “Forge A Fire” activity, where teams can bond over an ancient fire-building practice, she said.

“Guests love feeling rewarded by learning a new life skill, and it’s these different types of unique and local experiences that are powerful drivers for incentive travel,” Fernandez said.

Incentives “are 100% about experiences,” Carnero said. While the hotel might be important, immersive dinner experiences or cooking classes add the kind of excitement that motivates people. Carnero said she works with one hotel that offers an all-terrain-vehicle tour and a make-your-own cocktail event.

While certain destination may seem like naturals for incentive, Lindgren said there is really no place that's off-limits. For example, a car company based in Germany might decide to go to Charlotte, North Carolina, because the city has a connection with NASCAR. Every destination has the potential for incentive business, she said.

A recent trend is travelers creating itineraries surrounding marquee global events such as the Grand Prix, concerts and this summer, the Paris 2024 Olympics, Mansfield said. Four Seasons is also seeing travelers lean into “set-jetting,” using the filming location of their favorite television shows and movies to influence their next vacation spot.

The potential is huge, Carnero said. Even employees who don’t win a trip might book it because they’ve heard about it from their colleagues. And sometimes hotels will donate stays to generate interest and familiarity among a company’s employees.

Carnero said that while she works with upscale and luxury properties, in her experience a three-star hotel might successfully offer a dinner or a spa day as an incentive.

“I know this market is going continue to grow, and I’m seeing large companies more and more partner with hotel brands for incentives,” Carnero said. “Now, it’s up to the hotels to be open to it.”

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