Incentive Trip Budget Advice
Based on industry research, a wise budget for an incentive travel program is $6,000 per person for 4-5 nights in North America. For specific details, a $6,000 budget would include the following:
- 4 to 5 nights (for many years, the norm was 6 days and 5 nights, but recently some have shortened it to 4 nights; see budget factors below)
- a North American destination in the Caribbean, Mexico, Canada, or the US48
- an “incentive quality” 4-star or 5-star resort
- coach airfare for 2 (the winner and their spouse or guest)
- 2 hosted activities or excursions, such as spa, golf, ziplining, ATVs, catamaran sailing, or other local experiences
- all meals, including a welcome reception and award dinner
- collateral (promotional website, name badges, luggage tags, pre-trip mailers, and on-site signage)
- incentive travel planning services
Popular Incentive Trip Upgrades
- If the incentive group travels farther to Hawaii or Europe, add $1,000 per person for higher airfares.
- If the incentive trip upgrades to a high-end 5-star resort, enhances attendee gifts, or adds more ”wow” elements, then increase the budget by another $500 – $2,000 per person.
Incentive Travel Cost Benchmarks
The most recent, high-quality research reported an average cost of an incentive travel program was $5,193 per person (according to the inaugural IRF/SITE/FICP Incentive Travel Index). This joint study from the Incentive Research Foundation (IRF), Society for Incentive Travel Excellence (SITE), and Financial & Insurance Conference Professionals (FICP) was the most extensive survey of the incentive travel market. The large survey size provided reliable benchmarks for 2018 and 2019. Then, the COVID years of 2020 and 2021 confused the numbers. And, “vacation inflation” in 2022 increased airfares by 30%, hotels by 20%, and food by 10%. Therefore, Brightspot recommends $6,000 per person for 2023 and 2024 incentive trips.
The comprehensive study disclosed different figures based on their deep-dive analysis of vertical industries and trip types.
- The overall average incentive travel program was $6,040 per person across all industries and types of travel (air/resort, cruise lines, all-inclusive resorts, etc.).
- The joint study revealed that corporate buyers had a higher average of $8,151, which was inflated by the high number of financial & insurance respondents who generally have high-end broker trips.
- The best benchmark cost average is $5,193 per person for those trips managed by incentive travel agencies because (a) agency-managed trips represent a broader cross-section of industries, destinations, and trip qualities; (b) agencies recommend best practices to increase overall engagement and satisfaction; and (c) the data demonstrates that partnering with an incentive travel agency reduces costs. Here is a suggestion of when to hire an incentive travel company.
Industry-Specific Incentive Trip Budgets
In two “signature studies” on Top Performing Companies, the IRF research reported the best-of-the-best sales organizations invested in their top achievers as follows.
- Financial Services Firms spent $6,673 per person (see reference deck, slide 67)
- Technology companies spent $6,833 per person
The average cost of $5,193 is likely pulled lower by shorter-duration trips within the Continental US48. For example, 3 nights to Las Vegas for a call center incentive trip or a top performer trip for retail store managers. Alternatively, the financial services industry (including insurance companies and financial advisory firms) is known for top-tier trips to recognize their top producers. Technology companies, which had the highest average cost, are often global organizations with travelers arriving from Asia, Europe, and North America, which increases airfare costs. Thus, Brightspot believes the average cost of $5,193 was the best middle-of-the-road budget.
Incentive trips vary widely based on CEO preference, destinations, trip inclusions, number of nights, and overall quality. Here are the major cost drivers and quick comments.
- Destination – Most US companies rotate between Mexico, the Caribbean, and Hawaii, whereas global companies often rotate Europe, the Caribbean, Hawaii, and occasionally Asia or Oceania. See the top incentive travel destination list to start bucket-list daydreaming.
- All-Inclusive Resorts – For first-time programs, all-inclusive resorts in Mexico are the best value. Cancun, Riviera Maya, and Puerto Vallarta are wonderful starting points that stretch your dollar and leave room to raise the bar next year. Punta Mita and Los Cabos are more upscale and still offer excellent values.
- Duration – For years, a 5-night trip was the norm, but in this fast-paced world, many companies are shortening their club trip to 4 nights to reduce costs and get the top sales reps back in the field selling more quickly.
- Hotel star rating – Most companies say they want a 5-star resort, but many opt for 4.5 stars or even a high-quality 4-star hotel in a fabulous destination. What’s most important is to ensure the hotel has a “group mindset” (rather than focused on leisure vacationers or honeymooners) and that the destination has a robust infrastructure to support groups.
- Meals – Most trips include all meals, except some customer and partner trips will give attendees more free time without structured events or hosted meals.
- Activities – Typically, every other day includes a company-hosted off-site excursion, such as golf, spa, catamaran, zipline, or ATVs. The “day at leisure” to enjoy the resort has risen in popularity to allow attendees to decompress and help the trip budget too. In fact, recent studies have ranked ample downtime to relax as the #1 requested activity!
- Gifts – In recent years, the traditional room drop of smaller gifts has been replaced by a high-quality gifting experience upon arrival, such as Maui Jim sunglasses, Bose electronics, personalized Nike shoes, or Tommy Bahama shopping experiences.
- Originating Cities – The home location of winners is the new surprise for many global sales organizations, when larger quantities of winners are flying from other continents at higher airfares.
- Unique Experiences – Finally, many companies and incentive agencies are creatively offering unique, localized experiences in each destination that leisure travelers might not be able to do on their own.
Get More Money
The common takeaway from every new IRF and SITE study is this recurring trend – “get more budget.” In the last three annual studies, companies increased per-person spending by approximately +5%. In 2022, “vacation inflation” surged after Covid lockdowns produced revenge travel with rapid rises in demand for incentive group travel and an even more significant jump in consumer travel. Travel inflation has risen to 30% for airfares, 20% for hotels, and 10% for dining.
Creating challenges for incentive planners, recent studies reported that planners feel their travel costs are increasing faster than budgets – placing them in a difficult position when it’s harder and harder to find bargains in a strong market for hoteliers.
Suggestion – Stomp into the CFO’s office with these studies rolled in your hand, pound a fist on the desk, and yell, “our club trip needs 20% more budget!”
Incentive Travel Budget Estimator
The Brightspot website has one of the coolest trip estimating tools. This interactive pricing calculator lets a user pick a destination, the number of nights, hotel star rating, included meals, number of activities, and the value of room gifts. Voila! A little website magic occurs, and an estimated budget per person is calculated. Load your winner count, and the handy tool outputs your grand investment total. Theorycraft your next incentive trip to your heart’s content!
Cost of Agency Help
If your incentive travel group is larger than 40 people (20 qualifiers and 20 guests), an incentive travel company can save money, add creativity, avoid common mistakes, free up the internal management, and add impeccable service.
Most companies wonder if hiring an incentive travel company is more expensive, but they discover it’s a “zero net cost.” They learn that the agency fees of 15%-20% are offset by savings from lower rates on hotels; local partnerships with discounts on transportation, activities, and dining; and avoiding hidden costs ahead of time.
Learn more about the cost of hiring an incentive travel company.