Some Asian incentive buyers at AIME are reporting a change in client product preferences shaped by cautious business sentiments.
A corporate travel manager with the Asian office of a global electronics firm, told TTGmice e-Weekly that business travel budget has been cut, with top level instructions given to replace trips with video conferencing wherever possible. In terms of event spend, teambuilding programmes are halted this year while an incentive trip due to take place last year was postponed indefinitely.
Sakura season in Tokyo's Ueno Park, Japan
The manager, who had requested anonymity, added that downgrading travel class for savings wasn’t even an option, as the company had ceased use of business class for senior executives travelling on longhaul flights three years ago.
“Our Asia-Pacific units are actually performing well, but when US markets are shaky, head office gets nervous and overall budget cuts are implemented. Our Asian office will continue to fight for event budget this year to get some activities going for our colleagues,” she added.
Agreeing that international businesses are watching their spend out of anxiety is Teresa Huang, vice manager for outbound travel with SETtour Taiwan. She said: “In theory, companies should invest more in incentives to motivate better performance during tough times. But in reality, bosses are afraid to spend when they cannot foresee money coming in.”
Huang added that “the only companies maintaining their incentive activities and spend these days are those dealing in direct marketing and insurance”.
“I’m sending a 2,500-pax insurance company incentive to Vancouver this year, and possibly Melbourne in 2018. But we are seeing budget cuts in other industries. Our MNC automobile clients in Taiwan, for instance, have stopped large incentive programmes for a thousand plus people, preferring instead to have one small-scale longhaul trip for the highest achievers, and a midscale one of around 500 pax to nearby destinations for the next lower category of top performers,” she said, adding that Macau is favoured for its lower hotel rates and plenty of activities.
“If the client does head to Europe or the US, three- or four-star hotels will be used instead,” shared Huang.
For Monas Tjahjono, managing director of Monas Tours & Travel, based in Surabaya, Indonesia, reward trips to Japan, South Korea and Australia are favoured and still achievable even with their “tighter budgets”.
“What we do is to tie the incentive trip with an interesting season or festival in the destination, such as sakura season in Japan or the Tulip Festival in the Netherlands, so that the programme is enhanced without having the client to spend more money on theming,” said Tjahjono.