Incentive Travel Market Research, 2031
The global incentive travel market size was valued at $42 billion in 2021, and is projected to reach $216.8 billion by 2031, growing at a CAGR of 12.1% from 2022 to 2031.
The incentive travel market size is segmented into Industry Type, End User and Source.
Incentive travel is a management tool for rewarding and motivating sales representatives, dealers, distributors, production workers, support staff, and in some cases, customers. The company rewards sales representatives, who reach sales targets by sending them on trips. Usually, incentive trip comes with hotel stays, tour packages, and planned activities, such as dinners, parties, and games. Incentive travel does not have any business-related activity. Political climate across globe, safety and security of tourist, currency fluctuation of destination country, and budget of company are some factors that negatively impact the Incentive Travel Market Share.
Incentive travel is a significant part of the global tourism industry that constitutes an exponential share in the tourism industry. According to the United Nations World Tourism Organization (UNWTO), 100% of the global destinations-imposed restrictions on travel after WHO declared the outbreak of COVID-19 a pandemic. The UNWTO recorded around 1.5 billion international tourist arrival in 2019 and it dropped by 74% to 381 million in 2020. The year 2020 witnessed loss of 1 billion international tourist arrivals and a loss of around $1.3 trillion in tourism exports. According to UNWTO, the global tourism industry suffered 11 times more loss due to the outbreak of COVID-19 in comparison to the global economic crisis in 2009. The outbreak of the COVID-19 pandemic posed a severe threat to the global incentive travel market. It is anticipated that the demand for the incentive travel tourism may not be fully recovered even after everything gets normal in the post-COVID-19 situation. Incentive-based travel is considered very effective owing to benefits it has to offer to employee and organizations. However, this poses a severe threat of COVID-19 transmission among the population. Therefore, it is unclear about when it will be safer to travel in the foreseeable future. After analyzing the aforementioned points, it can be clearly stated that the COVID-19 pandemic has drastically harmed the global incentive travel market as well as the GDP of all the countries known for hosting tourist across the globe.
The hectic lifestyle of employees working in various industries surges the demand for incentive travel. Employees travel to relive themselves from stress and take some time off from their busy life style. In addition, the demand for incentive travel is increasing owing to the change in organizations prospective towards travel-based incentives, which is expected to boost the market growth. The organization's culture is the glue that holds together all of its constituent groupings. Staff, department heads, and leaders must all be aligned with the organization's values, mission, and vision; this is part of the organization's culture. A trip incentive is a wonderful technique to reignite the organization's culture. The incentive travel is considered as an investment by the corporates as it results in increase in overall productivity of the employee, leading to effective achievement of the company’s goals. It helps both, employers and employees in a positive manner. Also, the upcoming startups culture across the globe has made it very difficult to retain top performing employees, thus incentive travel are expected to be implemented in various industries to retain top performers.
Incentive travel helps to promote team performance, as a company's ability to achieve its goals depends on the collaboration of its employees. By requiring staff to go on a vacation together, they will get to know each other better and interact outside of the workplace. This is also an opportunity to establish team-building exercises. These exercises are designed to foster certain team abilities, such as team cohesiveness, team problem-solving, and healthy competition.
These are some of the important factors driving the incentive travel market. In addition, incentive travel is used as an end-of-season reward for a team, which is considered a good opportunity to turn it into more of a staff retreat, where people who have spent the year working together can spend time getting to know one another better, thereby strengthening bonds for an even stronger performance the following year. Moreover, all these team building exercises conducted by companies in form of travels incentive boost the incentive travel market. The organization's culture is the glue that holds together all of its constituent groupings. Staff, department heads, and leaders must all be aligned with the organization's values, mission, and vision as all of them are a part of organization's culture. A trip incentive is a wonderful technique to reignite the organization's culture thus by creating an event with the object of reinforcing organization's values and motivating employee. Public and private travel & tourism investment is necessary to support the ongoing growth of the incentive industry. Resulting from greater demand for tourist travel and in view of the industry’s potential economic benefits, many destinations globally have invested heavily in infrastructure development. However, countries, such as India, China, Saudi Arabia, the UAE, and others, have witnessed a strong economic growth and notable development in incentive travel over the years. Thus, these countries focus on infrastructural development of roads, airports, and better hotels to cater to the demand from corporate and government travelers.
There has been a fast reduction in employment around the globe due to firms attempting to minimize costs in response to a decline in company's revenue. In addition, technological advancement has impacted the employment rate as minimum employees are required to perform a task. Also, higher minimum wages across the developed nations such as U.S., Canada, UK, and others have lowered the employment rate. The COVID-19 outbreak and subsequent economic repercussions caused substantial suffering. During the initial months of the economic downturn, tens of millions of people lost their employment. Although the labor market began to recover after a few months, unemployment remained elevated in 2020. During the pandemic, millions of people were unemployed and struggled to afford basic food and housing. According to the U.S. Bureau of Labor Statistics, nonfarm payroll employment rose by 372,000 in June, and the unemployment rate remained at 3.6% in 2022. Thus, such factors are expected to hamper the market growth during the forecast period. With respect to Europe, although the financial market reaction to the result of UK referendum appears to have been largely contained, the increase in economic, political, and institutional uncertainty and the expected reduction in trade and financial flows between UK and the rest of the European Union over the medium term are expected to have negative macroeconomic consequences, especially in UK.
Providing staff with something to anticipate and much-needed time away from the workplace will make a much stronger impact towards increasing corporate morale. If travel incentives are awarded based on sales targets, it may even promote friendly rivalry in the company. In addition, these elements help to improve organizational culture and drive the expansion of the Incentive Travel Industry.
Travel enables the best performers to network with other best performers and the upper management team. This is the only time during the year where the best performers in the firm are gathered in one location. From the corporate viewpoint, this event gives management a chance to acquire insight into how top performers really meet established goals and develop a synergy to stretch beyond the three-day event to maximize performance for the rest of the organization.
One of the most significant benefits of the incentive travel program is "the networking opportunities with peers and executives, and being able to be among the most successful individuals in the business and the people that are driving the vision." Networking offers managers the opportunity to acquire ideas and best practices that may be used to boost overall business performance. This is a vital aspect of the entire incentive travel program owing to the useful insights that are supplied. Businesses are evolving to stay up with the requirements of their clientele and to respond to the constraints imposed. Managers that take advantage of this chance to listen to and elicit input from their top performers are more likely to make the required adjustments to enhance the functioning of the firm.
The Incentive Travel Market Share is segmented on the basis of industries, end user, source, and region. On the basis of industries, the market is classified into -healthcare, banking & finance, manufacturing, IT, retail, hospitality, and others. By end user, the market is segmented into individuals, corporate institutions, and others. By source, the market is segmented into domestic and international. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The healthcare segment dominates the global travel incentive, owing to population across the globe, resulting in a greater demand for healthcare services. Thereby, resulting in increase in the demand for incentive travels for employees in this sector. Employees working in the healthcare industry are often in need of recognition, support, and appreciation. A career in healthcare is very rewarding but it is also very exhausting and the employee deserves a special break or reward every once in a while. Thus, such factors are taken into consideration by various companies, which have led to the Incentive Travel Market Growth.
The corporate institutions segment was the highest revenue contributor to the market, owing to employees prefer travel incentive over other incentives like cash, gift, and extra day off. In addition, employers also promote travel incentives in corporates owing to its numerous benefits for the organization. For instance, incentive travel programs are a motivational tool to enhance productivity or achieve business, healthy competition, cost-effective and increases dedication & loyalty toward organization.
The domestic segment was the highest revenue contributor to the market, owing to restricted budgets and a significant number of travelling personnel, corporations prefer to offer domestic travel to their best employees. In addition, domestic trip time is shorter than international travel duration, which is another factor promoting the Incentive Travel Market Demand.
Europe was the highest revenue contributor, owing to increasing employment rate in the region coupled with the beautiful and attracting destinations which are best for the incentive travelers to spend their leisure time along with their families and also suitable for the corporate events to take place are the key drivers for the market growth in the region. In addition, Europe has been a popular destination for international incentive travel, thus contributing towards the Incentive Travel Market Growth.
Major players operating in the Incentive Travel Industry are Maritz, BI Worldwide, Ltd., ITA Group, Inc., One10, LLC, Meetings and Incentives Worldwide, Inc. (M&IW), Creative Group, Inc., ACCESS Destination Service, 360 Destination Group, CSI DMC, Carlson Wagonlit Travel, IBTM, BCD Group, Cievents, ATPI Ltd, Conference Care Ltd, the Freeman Company, the Interpublic Group of Companies, Inc. Expedia Group, Booking Holdings, CWT, Travel Leaders Group, Direct Travel, Fareportal, Frosch, Omega World Travel, Travel Edge, ATG, and Adelman Travel.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, Incentive Travel Market Trends, estimations, and dynamics of the incentive travel market analysis from 2021 to 2031 to identify the prevailing incentive travel market opportunities.
- The market research is offered along with information related to Incentive Travel Market Forecast, key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the incentive travel market segmentation assists to determine the prevailing Incentive Travel Market Opportunity.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global incentive travel market trends, key players, market segments, application areas, and Incentive Travel Market Forecast.
Incentive Travel Market Report Highlights
Market Size By 2031
USD 216.8 billion
CAGR of 12.1%
2021 - 2031
By Industry Type
By End User
Key Market Players
Adelman Travel, Omega World Travel, CONFERENCE CARE LTD., CSI DMC, BCD GROUP, BI WORLDWIDE, CIEVENTS, Fareportal, THE INTERPUBLIC GROUP OF COMPANIES, INC., THE FREEMAN COMPANY, ATG, Travel Edge, Expedia Group, ATPI LTD., Frosch, MEETINGS and INCENTIVES WORLDWIDE, INC., ONE10, LLC, Booking Holdings, CREATIVE GROUP, INC., 360 destination group, Direct Travel, CWT, Travel Leaders Group, CARLSON WAGONLIT TRAVEL, MARITZ, IBTM, ITA GROUP, ACCESS DESTINATION SERVICES
The incentive travel market garners high revenues in the travel industry. Organization rewards their top employee or top performing team within organization by providing them travel perks such as incentive travel/rips. Usually, incentive trip comes with hotel stays, tour packages, and planned activities, such as dinners, parties, and games.
Hotel and transportation industries are directly involved in the incentive travel market. These industries may benefit from incentive travel business by offering their services and facilities to the employee during their travel. Hotels are the main suppliers of incentive travel and are the main beneficiaries as well. Incentive travelers spend over 65% of their money on hotels for rooms and hotel dining while 15% is spent on other restaurants outside the hotel. Around 10% is spent on shopping and another 10% on local transportation. The Indian IT industry in the past has been dealing with an all-time high attrition rate that is averaging around 25%. To lower the attrition rate and provide employee with additional perks, companies are offering them incentive travel. Thus, such trends are expected to drive the market globally.