Incentive travel is set to grow at a breakneck pace of 19.7 pc CAGR
As tourism across borders races ahead to its pre-pandemic levels, most destinations, from Thailand to Turkey, are seeking to renew a key segment of their target markets – the incentive travel. Many destinations have lined up impressive and very competitive list of offers to get the incentive travel back to their countries and as rapidly as possible.
A new report by global market analysis firm Future Markets Insights emphasises just how important this market is not just for them, but the entire global tourism industry per se. The report says that incentive travel accounts for 5.5 pc of the overall tourism industry around the world.
The report says that the global incentive tourism market is estimated at USD 109 billion in 2022 and is by far one of the fastest growing segments of tourism in the world. It is set to grow at a breakneck pace of 19.7 pc CAGR and is expected to grow almost eight-fold by 2032 to reach USD 879.3 billion by the year 2032.
Future Market Insights says that incentive travel is essentially a conscious effort by the companies to keep the deserving employees motivated by providing them different incentives and many other factors are expected to drive the demand for global incentive tourism.
‘‘Incentive tourism programmes have been used by companies as a noncash reward to their employees and external partners for achieving key business objectives. It is one of the major contributors of the MICE (Meetings, Incentives, Conferences, and Events) sector,’’ says the report FMI.
Incentive tourism emphasises on fun, food, and other entertainment activities. The major players are companies offering incentive tourism programmes as noncash compensation. Such investments being made by the companies for their employees are expected to surge the demand for global incentive tourism.
‘‘Running a successful business involves a lot of variables, and keeping the team spirit high is one of them. Setting enterprise goals, individual goals, and target anniversaries go hand-in-hand with keeping the team motivated and consistent for success. Global incentive travel offers a great way to thank the employees for what they do, and celebrate their success together,’’ adds the report by FMI.
Incentive tourism is perfect for corporate groups, distributor meetings, board-level events, or individual prizes. It can be used for any reason and can be scaled to fit both large and small groups when needed. Several cruise line companies offer a wide range of exciting itineraries all over the world that are ideal options for companies wanting to offer a high-value, luxurious award to the deserving employees or partners like distributors. This is anticipated to increase the demand for global incentive tourism, says FMI.
Key drivers of incentive travel
The report identifies key reasons that would keep the growth of the sector at a spectacular pace that it is projected to grow by. FMI says one of the main factors is creating motivation for employees. “Incentive tourism is a healthy and positive concept that motivates employees to perform even better. Corporations are spending more on the welfare of their employees,’’ it says.
Incentive travel also means rejuvenation for the employees as many a time incentive travel includes wellness travel, implying that the travellers will experience physical and mental rejuvenation by the end of the tour and this has increased the popularity of the incentive tourism sector, says the FMI report.
That may be the reason that increasingly incentive travel involves some of the physical and mental activities like exercises, yoga, rock climbing, swimming, and so on, to give the employees a growing sense of respect towards the organisation that is striving for its employees’ good health. All these are expected to increase the demand for global incentive tourism, adds the FMI.
The report goes on to say that incentive travel is one of the finest ways for the companies to achieve their targets. ‘‘Companies are looking for ways to expand their businesses within legal boundaries, so that they can serve for the welfare of the society at large. To achieve profits, the employee performance is the most effective cog in the wheel. There can hardly be a better way than to organise company-sponsored trips for the deserving employees,’’ says the report.
FMI says that in view of the high-cost barriers attached to incentive travel it is not affordable for most small and medium size companies and only large companies have the budgets for such travel.
In terms of travellers in the incentive travel segment, the highest share of the market belongs to employees in the age group of 26-35 has the highest chunk of market share. FMI says that the people in the age group of 26-35 are more likely to travel as they generally get attracted to new locations and are ready to travel and explore places. Additionally, they are willing to explore adventure-based activities like scuba diving, water rafting or kayaking.
In terms of destinations that benefit from incentive travel, FMI says that North America is the largest market in the global incentive tourism market. The continent is meant for offering everything that travel lovers seek. From majestic forests, to heaving fields, and bright metropolises, the region has got everything to offer for the best performing employees. This coupled with the beaches, the cuisine, and the high plain deserts ensures the fact that tourists get to experience this amazing location to their fullest.
Another hot favourite is Europe, says FMI, with its perfect combination of sunshine, scenery, architecture, and beaches. ‘‘Europe is believed to be one the most popular tourist destinations. Well developed infrastructure, and compact geography makes travelling easy as well as memorable in Europe. The region is especially meant for its history, heritage, and distinct culture. Moreover, presence of some of the most famous landmarks across the region makes Europe a hot favourite,’’ says FMI report.
Next on the list is Asia Pacific which is attractive as it is home to some of the oldest cultures, Asia Pacific is believed to be one of the most preferred tourist destinations, says the report, adding that one of its key attractions is its glorious architecture.
