Economic concerns are causing corporates to approach their future incentive travel plans a little more carefully
Business event planners in Asia are observing an air of caution surrounding clientsâ€™ event plans as concerns mount over an impending global recession, with even shorter lead times, a preference for cheaper destinations and more free-and-easy elements a common occurrence now.
While CWT Meetings and Events, which started 2019 on a strong footing, has yet to see â€śany significant dip in the volume of meetings, events and incentives so farâ€ť, its Singapore director, Petrina Goh, told TTGmice that â€ścompanies have become more cautious with their (events) spendâ€ť.
According to Goh, notable changes to their buying behaviour include offering more free-and-easy time â€“ which relieves the burden of cost â€“ into their incentive programmes, especially when reward trips are bound for pricey longhaul destinations such as Eastern Europe and the Mediterranean.
As well, the trend of short lead time that has plagued the industry for years now, has worsened, observed Goh. As companies struggle to have their budgets confirmed, clients are now giving notice only two months or a few weeks ahead of the event.
Clients on a tighter budget are also favouring nearby destinations. CWT Meetings and Events has recorded â€śa steady increaseâ€ť in programmes to Thailand and Vietnam, while Dynasty Travel Singaporeâ€™s MICE division is seeing South-east Asian destinations gaining in popularity.
Dynasty Travel Singaporeâ€™s spokesperson Alicia Seah revealed that budgets for incentive events going forward are down from an average of S$1,000 (US$734) to S$2,000 per person, to S$800 to $1,500.
Daniel Chua, founder and chief executive of Singapore-based conference management agency, Aonia, predicts that â€śinternal and externalâ€ť business events will shrink in the coming months, and he blames â€śperceptionâ€ť for it.
He explained that when a client reads about an impending global economic downturn and sees his business partners or peers cutting back on expenditure, he will likely mirror the austerity measures even though his business is still thriving.
While buying behaviours for business events will change in tough times, events specialists agree that incentive trips are unlikely to be frozen even during a recession.
â€śIncentive trips are compulsory for sales-driven operations,â€ť stated Chua, but added that budgets for internal incentive trips such as staff teambuilding programmes â€“ as opposed to external ones that motivate and reward sales partners â€“ would be manipulated more in a challenging business environment.
While agreeing that there is a firm need for incentive trips, companies today are also adopting non-travel rewards, such as gift cards, merchandise and points programmes.
Meanwhile, G2 Travel â€“ which marked May with a massive 12,500-pax incentive event in Switzerland and Liechtenstein for Jeunesse Globalâ€™s Chinese top achievers â€“ is maintaining a rosy outlook for its business events segment, with Al Mulenga, director of the Hong Kong office, predicting â€ścomparableâ€ť business in 2020 to this yearâ€™s.
Mulenga said corporate business has not changed since the start of this year, and the company is still seeing emerging interest from Vietnam and Malaysia. Corporate clients in Malaysia, Indonesia and Taiwan are still set on longhaul incentive destinations, specifically the UK, Scandinavia, Italy and also Eastern Europe. Budgets for new events are also being maintained.