With rising inflationary pressures, incentive planners will increasingly need to unleash their creative powers for impactful events.

This article was originally found on M&C / Asia.

The creative use of budgets was explored at a recent discussion hosted by the Incentive Research Foundation (IRF), focusing on what lies ahead for the incentive travel industry.

"Incentive travel budgets are growing but prices are also rising at a faster pace," said Rudy Garza, VP, operations, at Brightspot Incentives & Events and chair of the 2024 IRF Research Committee.

"Programme budget increases are not keeping pace with inflation. If companies do not increase their budgets accordingly, they will be forced to make some tough decisions about how to reduce costs including making their trips smaller or shorter, by reducing the number of attendees, or the length of trips."

Andy Schwarz, VP, content & communications at the IRF, highlighted how those on restricted budgets are looking to do more with what they have, and dealing with the challenges of managing the ongoing tension between planners and suppliers, particularly when it comes to hotel and DMC staffing levels and service levels.

"Simply put, it's hard to justify high and inflationary pricing with our clients when service levels have declined," said Garza. "The need for transparency and clear communication between planners and suppliers has never been more important."

The panel also highlighted how this tension has been compounded by the fact that incentives are often booked up to two or three years prior to the event, with prices set at the same time, resulting in very little to no leeway to meet costs that have risen over the last two years.

"We really need to understand one another and where we're coming from, it's not as simple as a planner just coming back and asking for more money," said Susan Adams, VP, engagement strategy and corporate services at Next Level Performance and chair, 2024 IRF Board of Trustees. "We need to be sure that on the ground our vendor partners understand that we need to find a creative solution that works for both sides."

Adams gave an example based around menu planning for an upcoming event, where the cost of the menu has gone up significantly since the programme was booked and the price set two years ago. "We need to work with the chef and the convention services team to find the right menu, to work at the right price for the hotel's revenue needs, but also to work for our client's budget which is not going to change," she said.