11 Incentive Trends for 11’

1)     CAUTIOUS OPTIMISM –  4 out of 10 IRF participants say the economy has had a slightly positive impact on their ability to plan and implement non-cash incentive programs (incentive travel/merchandise rewards programs).

2)     THE NEW ‘NORMAL’  - businesses are settling into lower levels of activity, i.e. less financial leverage, expanded role for government, new levels of transparency for investment vehicles and less US consumption.

3)     GOING, GOING, GONE… GLOBAL – performance improvement and travel incentive companies must now think globally in terms of complete business opportunities.  For instance, Google searches for “employee engagement” were 10 times higher in India than in the US, 5 times higher in Singapore and 4 times higher in South Africa.

4)     INCREASING GOV’S INVOLVEMENT – All aspects of the incentive industry face greater government influence.  Travel pressures, the Card Accountability, Responsibility and Disclosure Act and other similar initiatives have an increasingly constraining effect on businesses.

5)     EXTRAVAGANCE VS. NECESSITY – 33% of IRF participants saw a switch from international to domestic travel and a reduction in the length of trips.  Americans are redefining “necessity.”

6)     EXPERIENCE OVER PRODUCT – over 40% say they expect individual travel will increase as a result in the change in preference to experiences over products.  Experience has always played a valuable role in incentive travel, but now travel rewards must become more present in employee recognition programs and other merchandise incentives.

7)     NON-CASH RECOGNITION ON THE RISE – less than 40% of companies worldwide will increase their variable pay for employees.  There is now a strong interest in the use of non-financial motivators.

8)     CHANGING SOCIAL INFLUENCERS – trends show a reprioritization of what is important to individuals, an increased focus on health and wellness and the environment are valued to most consumers.  Incorporating elements of health and sustainability into programs will be crucial for the future.

9)     COMMUNICATION = SOCIAL MEDIA – with 400 million people on Facebook by the end of 2009 and 86% of companies using social media; the world has evolved into a place where consumers trust what their social networks are saying, not companies.  Integrating incentive technologies into one cohesive strategy will be key for successful incentive programs.

10)     IT’S A VIRTUAL WORLD – over the next 10-15 years, virtual meetings could replace up to 70% of internal travel (to/from organization’s facilities) and 10% of external travel (trips to visit customers).  Potentially reducing corporate travel spending by 21%.

11)     GAMES HAVE NEW MEANING – the growth of computer games using token economies (points) will be explored for application to employee and channel motivation programs.  Multiple organizations have already added games to their incentive programs; it will only be a short time before gaming in employee and channel rewards programs will be mainstream.

FUSION Performance Marketing always looks at what trends will be effecting the future of the incentive industry and capitalizes on new opportunities to grow your business based on these trends.

Reference: “Driving Our Future: The Top 11 Incentive Trends for 2011.” Incentive Research Foundation.  February 2011. http://theirf.org/research/content/6031533/driving-our-future-the-top-11-incentive-trends-for-2011/

International Programs: A Guide to Value-Added Taxes

With meeting and incentive travel being a core competency at FUSION, it is important to have an understanding of the “ins and outs” of value-added tax (VAT)– the surcharge levied on various goods and services in more than 140 countries.  With no universal standards for VAT, it is important to utilize a company with the knowledge and resources to cost-effectively manage an international meetings and incentive programs.

Below is a list of information to clarify some of these complicated VAT rules.

1)     Each country has its own VAT rate and its own set of rules – different countries have different rates for meeting components as well as which event-related goods and services are eligible for rebates (typically, this includes hotels, food and beverage, venue rental and audiovisual rentals) and certain types of meetings warrant a refund (an incentive vs. a sales meeting).

2)     Having the right resources – meeting and incentive planners have endless resources to local convention & visitor bureaus, national tourism offices and destination management companies, which will have current VAT rates and regulations for their destination.

3)     Determine if U.S. firms realize rebates – the first thing to look at for VAT rebates is whether the destination offers any rebates to a U.S. firm.  Most European destinations do, but not all (including Italy and Spain), and almost every country outside Europe does not allow U.S. firms to recover the tax (including the Caribbean, Central and South America, China, India and Singapore).

4)     Don’t rely on historical rates or nearby countries – there are vast differences in VAT rates from country to country.   France’s VAT on hotel rooms is 5.5%, while the United Kingdom charges a whopping 20%!  Both countries offer rebates, but the upfront payment is much steeper for the U.K.

5)     Know the difficulty for security rebates – some countries (Australia, Japan and South Korea) offer limited rebates on very specific types of meetings, but require complex documentation.

6)     VAT in Mexico and Canada – Mexico stopped levying VAT in 2005 and instead waives that amount, rather than charging the tax and rebating it, but pure incentive programs do not count in this policy.  Canadian VAT – known as goods and services tax (GST) –rebates are difficult for U.S. events to qualify for.  Canada has a provincial sales tax of 7-8% in addition to its GST, which can be reclaimed in certain provinces (including Quebec).

7)     Types of events affecting VAT rebates – the type of event can affect whether your firm is eligible for a rebate.  For example, Ireland will rebate most costs for trade shows or sales meetings, but not for incentive programs.  Countries that do allow incentive program refunds include Denmark, Finland, France, Germany, Iceland, Malta, Monaco, Netherlands, Norway and the U.K.

8)     Collect the proper paperwork – it’s extremely important to keep all receipts, invoices and documentation for the event and to obtain the required filing forms.  Ideally, you want VAT listed as a separate line-item on all invoices.  All charges and paperwork should be filed under the same name to ease the process.

9)     Deadlines are critical – U.S. businesses must submit their VAT recovery application within six months after the year ends, with some exceptions (the U.K. operates on a fiscal year-July to July).

Reference: Grimaldi, Lisa A.  “A Guide to Value-Added Taxes.”  Meetings & Conventions, November 1, 2011.  www.meetings-conventions.com.

25 Golden Rules of Travel (Part 2 of 2)

13.  Discover the Most Flight Choices – ITASoftware.com provides the most comprehensive and least biased fare / route options.  If your schedule is flexible, punch in a month-long travel window and the length of the trip and the search engine will tell you when to fly!

14.  Sign Up for Airfare Alerts – Sites like AirfareWatchdog.com find unadvertised low fares and FareCompare.com alerts you when a fare drops by a certain amount.

15.  Get Seat Alerts – Sites like ExpertFlyer.com allow you to punch in the flight you’re on and the seat type or rows you want, and you’ll be alerted by email if any seats become available for just $5 a month.

16.  Relax in a Better Seat – Don’t select a seat without typing the airline and flight number into SeatGuru.com / SeatExpert.com and checking the stats on the best seat location.

17.  Connect with a Hotel’s GM – Often the General Manager will reply to critiques of his property on TripAdvisor.  Send a note that you are looking forward to staying at the hotel on X date –hopefully he / she will do something extra for you during your stay.

18.  Keep Your Miles from Expiring – Take the hassle out of monitoring each loyalty program you belong to and use a site like AwardWallet.com to make sure you don’t let your miles expire.  Award Wallet shows you each of your mileage accounts at a glance, including expiration dates.

19.  Find the Best Room for Your Buck – At luxury properties, rates vary substantially according to occupancy.  Call and ask the manager when, during your travel window, the hotel will be emptiest and thus have the lowest rate.

20.  Score a Better Room – Ask and you shall receive… and if you don’t ask for a great room, you’ll get what’s left over after everybody else’s requests have been filled.

21.  Befriend the Concierge – Most concierges at top hotels benefit from the extra business (even when you’re not staying at the hotel!!) and can arrange for cars and drivers, procure hard-to-get tickets, provide names of specialty stores, or recommend English-speaking doctors.  They can also write down names and addresses of the places you want to visit.

22.  Book Through “Top Producers” – Travel agents who sends the most travelers to a leading hotel or cruise line will be able to get you the most perks.

23.  Hire an English-Speaking Guide – The right guide can serve as your expediter and fixer, getting you past lines, showing you secret places you’d never find on your own, introducing you to locals and helping you to bargain.

24.  Get the Mileage -Award Seats You Need with No Effort – BookYourAward.com has saved many travelers by showing them how they can use their miles to get where they want, when they want, for fewer miles than they thought possible.

25.  Be Rescued When You’re Stranded by an Airline – Ever been stuck at an airport during a snowstorm?  Check out CrankyConcierge.com  - a service that will do everything possible to get you to a functioning airport and onto a flight.

Reference:  Perrin, Wendy. “The Perrin Report:  Secrets Every Marketer Should Know.”  The Informer, November 2011.