How to Crack the Incentive Travel Market

Selling incentive travel business differs from other types of travel, but for corporate or leisure agents who are willing to learn the ropes, this is a profitable niche, with potentially high returns.

“Historically it’s been the highest spend per person of any type of group travel,” said Bruce Tepper, vice president of Joselyn, Tepper & Associates, a travel industry consulting and training firm.

“This is also a business that has never been driven by commission. Agents, not the suppliers, set the margins. It’s lucrative.”

Incentives also may appeal to agents looking for a new challenge. “It’s something new and different and makes you learn new things and new ways of doing things,” Tepper said.

Staffing is step one
The first step after deciding to pursue incentive business is being willing to dedicate staff  to the effort, whether it’s existing staff who will be trained or new hires dedicated to incentives.

Once that decision is made, agents need to get training.

Now may be a good time to do that. SITE, the Society of Incentive Travel Executives, plans to launch a new Certified Incentive Specialist program by the end of the year. The two-day program will be designed for incentive travel newcomers and will not require membership in SITE nor any minimum experience.

Incentive travel sellers need to understand companies and their motivational goals, whether that’s inspiring staff to sell more or moving customers to buy more products and services.

Court current clients
Once agents understand how incentives work, they should start seeking incentive business from existing clients. A primarily leisure agency might mine its client base for executives or company owners. Agents who are country club members can also use that as a good source of potential clients.

Incentive travel is a natural for corporate travel agents. “Use your own client base to identify possible leads and then find out about their employee rewards program,” said Tim Smith, president of GlobalPoint Travel Solutions, a $70 million agency in San Diego, which does about 3% of its business in meetings and conventions.

“It's much easier to sell a program to an individual or company with whom you have an existing relationship as opposed to chasing a vaporous potential customer. Love the one you're with and you'll expand your influence,” Smith said.

Identifying prospective clients
Those who want to go after new clients won’t find it hard to find prospects.

“An industry in everyone’s backyard that uses incentives quite often is car dealers,” said Tepper. “Even a small dealer has 20 or 30 salespeople.

“Look for distributors of anything, like Coca Cola and Pepsi bottlers. You don’t have to be in New York, Chicago or Los Angeles to start,” Tepper said.

New supplier contacts
Working with incentive groups requires both a new mindset and new set of contacts.

“You’ll be dealing with an entirely different network of suppliers,” Tepper added. “Even with the airlines and hotel companies you’ll be dealing with different people.

“And, you’ve got to come into this thinking forget commission. We do everything from net. What pricing we use will determine what we sell for.”

Potential partnerships
Agents seeking incentive business also have to decide on their agency’s level of involvement. They can designate a dedicated team to designing, managing and implementing incentive programs or seek help from meeting and incentive planners.

Operating the incentive business directly is, of course, more lucrative. It also means agents can not only take over the incentive business of clients with existing programs but can seek out companies that have never had an incentive program.

Another way to get involved in the business is to team up with a meeting planner or meeting and incentive house. “It might be the perfect thing to do. There are thousands of one- or two-person meeting planning firms that might want to pair up with an agent.” said Tepper.

Another option is to partner with a company like Oyster Bay, N.Y.-based Acclaim Meetings, which works with agents on negotiations, bookings, commission collection and technology. (Editor’s note: Owned by American Marketing Group, Acclaim Meetings is a sister company to Travel Market Report.)

Understanding the business is crucial
Either way, the key to success is understanding  incentive programs and how they operate, according to Anne Marie Moebes, executive vice president of Acclaim Meetings.

“An agent first needs to understand why the company is offering the incentive; what their goals are and why the employee is motivated to win the incentive,” she said.

“If you understand what’s in it for all parties, the agent can make an educated decision on what to offer as the travel product,” she said.

“It must meet the budget and requirements of the sponsoring company but at the same time entice the winner/employee and their spouse or guest if they are part of the program. Many times the spouse can be the driving influence.”

Vendor relationships
As in all areas of travel, developing relationships is crucial not just for clients but for vendors. “You need to work very closely with vendors. Use preferred vendors so you know they will go all out,” said Wendy Burk, CEO of La Jolla, Calif.-based Cadence Travel.

“Use those you have a longtime relationship with, because in the end it’s all about relationships,” Burk added. “The danger of handling corporate, leisure and meetings is the domino effect. If you screw up one you’ll screw up all three.”

Advice for smaller agencies
Although larger agencies with dedicated incentive travel staff may be more likely to handle incentive programs without outside help, even smaller agencies can go it on their own.      

Carol Horner created the Virginia Beach, Va.-based Horner Incentive Group in the mid-1900s after several years as an agent and agency owner. She and her husband still own a travel agency but were advised early on to create a different name and identity for the incentive business.

“That’s what we did and thank goodness, because we changed our agency’s name three times. With my incentive business the name stayed the same from the beginning,” she said.

All-inclusives for incentives
As a smaller agency with annual sales of $8 million, Horner finds it easier to use all-inclusives in her programs. She used to create cruise incentives but now prefers programs featuring Mexican and Caribbean all-inclusives.

“You have more flexibility with land-based programs. You can do more team-building activities,” she said “A cruise is too restricting for some people in terms of the dining. The VIP feels obligated to be with the employees every night. And it’s much more lucrative to do an all-inclusive than a cruise.”

Make it unforgettable
The job of an incentive planner is to create unforgettable experiences for participants.

“The single most important thing is the wow factor – the wow factor when it comes to the venue, the entertainment, the graphic design and the theme to thank their customers or top employees,” said Cadence Travel’s Burk.

“It can even be ordinary London or Paris, but it will be something they can’t buy off the shelf. Every aspect will be unique.”