Most people vividly recall where they were when the 9/11 terrorist attacks occurred. When Vicki Cahill recalls that day, she also thinks about a group of people she wasn’t with – top Verizon Communications salespeople who were left stranded in Palm Springs, Calif., where they had been enjoying an all-expenses paid retreat. “Our biggest challenge was, ‘How do we get these folks home?’” says Cahill, director of recognition, incentives & communications for Verizon, the largest provider of wireline and wireless communications in the United States.

BI, the Minneapolis-based performance improvement company that puts together Verizon’s incentive travel programs, assembled a convoy of motor coaches that transported participants to their various destinations. “BI’s crisis management  training took hold,” says Cahill. “They were in constant contact with the drivers and set up a special phone number at BI for family members to find out what was going on.”

Despite experiencing firsthand the day the world stopped traveling, Cahill says it didn’t deter the company from running another incentive travel trip a mere two months later. “We thought about canceling the trip, but we really wanted to continue to travel to help rebuild the country and get  back to normal.”

Much to the travel industry’s dismay, a majority of companies and individuals didn’t share that pugnacious attitude. Trips were canceled in bunches and the industry took a hard hit, losing an estimated $36 billion in revenue during that first year, according to the Travel Industry Association of America.

By the time the trepidation of travel dissipated, an economic slump had settled in, forcing companies to continue to reduce travel budgets, including spending on incentive travel.

Through it all, says Cahill, Verizon wanted to get back to business as usual, but the economy and geopolitical tensions did constrain the company’s programs. “We rescaled for budget reasons, and we did have plans to do a program in London in April 2002 that we cancelled. We just were not comfortable with international travel after 9/11. We took them to Hawaii’s Big Island instead.”

Cahill is confident the company’s top performers will be traveling internationally again, but says it may take a few years. “I have considered international travel since then, but we haven’t booked it. We’re looking at more politically neutral destinations now.”

With assistance from BI, Cahill plans several short-term spurts and more traditional long-term incentive travel campaigns for Verizon’s multiple sales channels each year. She recently surveyed past and potential program participants to find out what destinations will motivate them the most going forward. While the company structures some trips around Verizon-sponsored events like an Elton John concert in New York, Cahill is always looking for more diverse locales. “We ask top performers and middle performers what destinations they’d like so we can get a pulse on what will motivate them and drive behavior. We’re definitely doing our homework and checking with our audience.”

Hawaii, the Caribbean and Mexico remain at the top the list. Europe remains a second-tier choice while some regain their comfort level with overseas travel, Cahill says.

“We’re helping the U.S. economy. There are some great destinations here,” she says. “We’ve done a Mall of America spurt in December and people are thrilled. [Editor’s note: Who would have thought Minneapolis in December could be motivating?!] I’m big on having themes. We did a Field of Dreams program in Florida where winners met professional baseball players. It’s all about keeping it exciting.”

Cahill says many of the company’s travel choices have to do with demographics. “For an East Coast group in the winter, we’re going to take them to sun and sand,” she says. “But we like to mix it up. We took one group to the Atlantis resort in Paradise Island in the Bahamas that is like a playground, then took the same group to Montreal the next year, and they loved being in a city destination.”

Promising Numbers

Verizon is indicative of incentive travel users throughout the country. Incentive planners, who have bumped through a three-year lull, say the incentive travel industry is making a comeback.

Travel industry analysts report significant increases in hotel bookings from even one year ago, specifically in luxury hotels that are dependent on business travel and group events. PricewaterhouseCoopers is raising its forecast of hotel rates and occupancy to the highest growth level since 1984.

As companies outside the travel industry also look to rebound, they realize that experiential incentives are an effective means of grabbing their sales team’s attention and motivating en masse (see story).

“Undoubtedly, incentive travel programs are on the up tick,” says Mark Bondy, president of VIKTOR Incentives & Meetings in Traverse City, Mich., and a member of the board of directors for the Society of Incentive and Travel Executives (SITE). “We have sensible clients who realize the benefit and impact incentives have on their business. After 9/11 and again after the war in Iraq began we had a small percentage that hesitated, but most called and said, ‘We’re still going aren’t we?’”

Lately, Bondy says, his clients are staying closer to home because of the weak dollar abroad as much as the tense geopolitical environment. “Some program budgets have been devastated by the exchange rates. We’re changing that and working with the budget a little bit, but our clients are ready to go back to traveling again. Things are getting back to normal – normal being newly defined.”

Joe Riley, senior vice president of Eastern Bank in Lynn, Mass., says while competing financial institutions have scaled back their incentive offerings from trips to Hawaii to weekends in Washington, D.C., his company has held tight on the quality of awards it offers. As he sees it, they can’t afford not to stick with what brought them success in the first place.

“Our people are elite producers. They are responsible for the development of new business, and our incentives are an important component of building a successful sales organization,” Riley says. “Our salespeople are responsible for managing portfolios and expanding the customer base. I can give them a $5,000 bonus, but if I send them to Los Cabos for five days, they’ll tell you one year from now what they did on that trip."

Dick Kisker, executive vice president of Premier Incentives in Marblehead, Mass., puts Eastern Bank’s programs together. Producing incremental sales is a standard objective of incentive travel programs, Kisker says, but sales staff retention is of equal concern lately. “You foster that by incentive programs. If a salesperson comes in with a book of business, that’s great, but if they leave with a book of business, that’s disastrous, not to mention the cost and time it takes to train someone and get them acclimated.”

Customer loyalty also is critical. “We work with building materials companies that sell to contractors. As long as they’re treated properly and they get recognized, they’re not going to go to Loews or Home Depot to save a penny on a piece of plywood.”

Kisker is optimistic about incentive travel’s continued rebound, but admits that it won’t happen overnight. “Was there a valley? No question. But we’re only beginning to see that reverse. The companies that are giving us the go-ahead to run a program will operate it in the first year. Fulfillment doesn’t come until the second year.”

That has 2005 shaping up to be a busy year for Kisker and the rest of the incentive travel industry.

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