“Vacation inflation” is ratcheting up airfares and hotel costs for leisure travel, business travel, and corporate events. With pent-up demand, higher fuel costs, and labor shortages, the meeting cost per attendee is a whopping 25% higher than it was in 2019, according to the 2023 Global Business Travel Forecast, released this month by travel management company CWT and the Global Business Travel Association.
If you read no further, remember the adage that meeting, motivation, and marketing are not costs – but investments. Properly designed, each investment will deliver an ROI.
For Q4 and 2023 planning, these bright ideas will save a few Dollars, Euros, or Pounds and maximize your company investments in people and pipelines.
MEETINGS
Hotel Contracting Savings
The most significant savings opportunity is at the very beginning – picking the hotel and destination. By using eRFP tools, dozens of hotels in multiple markets can bid on a meeting to locate the best bargains. The Brightspot Strategic Sourcing team is staffed with CMPs (certified meeting professionals) who average 20 years of experience, and we offer complimentary site research and hotel contracting. These sourcing pros leverage industry relationships, buying power, and utilize best practices in hotel contracting to unlock cost savings. These methods also shorten the total cycle time to contract and shield clients from persistent follow-ups by hotel sales reps. Like fitting in a puzzle piece, placing your meeting in the right hole on a hotel schedule will bring extra savings.
Second-Tier Cities
Hot spots are top-of-mind but be warned they are jammed-packed with revenge travelers. Second-tier cities can offer huge savings and still have excellent airport access. Instead of 1st-tier Austin and Miami, consider San Antonio or Tampa. Nashville has soared in popularity (and cost), so look at Charlotte, Indianapolis, or Louisville. Try San Jose rather than San Fran.
Be Flexible
It is truer now than ever that flexibility will produce big savings. Planning ahead is important in a sellers’ market. More lead time yields discounts. If lead time is short and hotel occupancy is high, then hotel revenue managers know that the remaining rooms can be sold to last-minute corporate bookings at full rate. Hotels function like airlines. Advance bookings for hotels are cheaper. Another tip is to be flexible with the meeting “pattern,” meaning the days of the week. Tuesday to Thursday might be preferred, but Sunday to Wednesday or Wednesday to Friday could fill an open spot at lower rates.
Talk to the Chef
Novices pick meal options off the catering menu, but meeting planning pros build custom menus in collaboration with the chef. To save costs effectively, ask what other groups are eating that week to consolidate purchases and preparation. Hotels like these questions because they can help them effectively utilize labor when hotels are short-staffed. Also, you should consider local, seasonal ingredients, which can improve food dishes and reduce delivery costs when fuel is high.
Public Trade Show to Private Roadshow
Tradeshows are expensive, exhibit booths are costly, and attendee travel can be restricted by company policy or jam-packed calendars. While companies still feel obligated to appear at the #1 show in their industry, some companies are shifting strategies to reallocate second-tier show budgets to private roadshows that bring the content, demos, and experts to the prospects’ locale. Roadshows can be structured as demand generation events, sales blitzes, product launches, lunch-and-learns, or customer hospitality experiences. Benefits include creative gatherings, unique venues, cultural draws, one-stop planning, and cost savings from less travel and smaller venues. Plus, it’s nice to have high-quality, less-rushed conversations with a customer away from competitors’ ears and pitches. To learn more about roadshows, check out 5 Roadshow Tips for Success.
Pre-Plan with Quick Estimates
To assist with advance planning and budget estimates, take advantage of this meeting cost calculator to make what-if calculations. Input locations, hotel rankings, number of days, meals, and more to get a grasp of how the cost is affected.
INCENTIVE TRAVEL
Save 16% in Mexico
Meetings and conferences in Mexico enjoy a waiver of the 16% VAT (value-added tax). While legally, the 16% discount applies only to meetings, savvy planners can recategorize their incentive trips with minor tweaks to their event name and agenda without forcing top-selling winners to sit in a ballroom for 8 hours. The 2022 IRF Destination Preferences Study reported that Mexico remains one of the most booked destinations overall and that participant appeal had risen too.
All-Inclusives Save & Avoid Surprises
All-Inclusive resorts are thriving in 2022 and looking strong for 2023. CEOs love that their president club trip winners never need to open their wallets. Meeting planners like that their budget has zero surprises. And CFOs smile, knowing that all-inclusive resorts offer the lowest net costs because the resort gives volume discounts. See Brightspot’s review of Top All-Inclusive Resorts for Incentive Travel and Meetings.
Add a Free Day
An industry competitor surveyed all their incentive attendees on the most popular trip activity. A logical guess would be possibly the spa, golf, catamaran sailing, or zip-lining. However, the #1 choice was a day-at-leisure to enjoy the resort. The 2022 IRF Destination Preferences Study confirmed that “ample time to relax” was the most important quality of an incentive trip by 89% of respondents. And the best news? Budget impact = zero!
Lower Tax Costs
This savings requires a thinking cap or calling your friendly CPA. The fair market value of incentive trips is taxable to winners. At an average trip investment of $6,000 per person, or $12,000 per couple, many companies mistakenly report the entire $12,000 investment as taxable income, but Brightspot advises that a 30% discount is reasonable. See our Tax Rules for Incentive Programs. For a single winner, the tax savings could be $1,260 ($12,000 x 30% discount x 35% tax rate). If the company has 100 winners, the total savings on “tax gross-ups” to winners would be $126,500!
CHANNEL INCENTIVES & SALES CONTESTS
Save with Software
Accenture’s study on overspending in channel incentives shows that internally managed programs will often overspend by 5-10% due to three causes: complexity, decentralization, and data errors. A robust sales incentive software platform will avoid these pitfalls and often pay for itself by eliminating overspending and dramatically improving the lives of those managing incentive programs. If a program has over 100 participants or an award budget is greater than $25,000, Brightspot recommends searching for an incentive technology solution.
Incentives are Self-Funding
The simplest justifications are the best. Incentive programs pay for themselves, because awards occur only when sales are made. “Self-liquidating” is the technical term, and of course, effective program design of contest rules is critical to achieving this ROI. Find out more by reading ROI Evidence for Channel Incentive Programs.
Reset Strategy
The Covid pause broke the handcuffs of past precedence, so executives should seize this window of opportunity to reset incentive strategies. Cost savings can be achieved by opting not to repeat prior decisions. Refocusing reps on new products and markets that achieve higher margins is a better plan than squeezing down costs. Many companies realize new selling efforts require added learnings or certifications. Enablement is always a hot topic, especially in channel partner organizations. With reps struggling to map the steps to a complex sale, behavioral incentives are increasing in popularity. When education is incentivized, the employees and the company win.
Recognize to Retain
Bright CEOs understand The Great Resignation (or Great Reshuffle) is the biggest threat to their business, sales, customer service, excellence, and just about everything else. The enormous cost is not the incentive rewards but the cost of turnover! Now is the time to double efforts on employee recognition, invest more in culture, strengthen personal relationships, increase training and professional development opportunities, and add more fun to the workday.
Gift Card Catalog
A shocking fact is that 69% of businesses purchase gift cards at retail. Sure, it’s easy, but there are many hidden costs. For instance, wasted time is a soft cost when a mid-level manager drives to multiple stores to buy all the desired cards. Also, there are additional fees for activation and mail delivery. Weak internal controls and shipping costs add more risks and expenses. Using a gift card catalog adds efficiency, net cost savings, and branding opportunities.
At Brightspot, we strive to match your individual need with the perfect meeting, incentive travel program, or channel incentive program. Our teams do the research and background work so you can sit back and focus on the high-level decisions. Drop us a line if you want to avoid wasted time, labor, and repeated processes! Brightspot can be your helping hand every step of the way.
