Trends in Asia's Incentive Sector
David Sand is the president of the Society of Incentive Travel Executives (SITE), a global organisation of professionals in the incentive travel industry set up 40 years ago. Based in the United States, SITE has nearly 2,000 members in 90 countries and regions. With the growing importance of China as a source market and destination for incentive travel, SITE held its annual conference in Beijing in September last year. In this interview with Keith Chan, Sand shares his views on the status of incentive travel, and its trends in Asia, particularly in China.
Incentive is probably the least understood part of MICE. How would you describe incentive travel and its importance to the travel industry?
Incentive travel is the reward for individuals as part of a professionally structured reward programme for extra performance. It is paid for by a corporate client and is structured in such a way that the experience is extra special to match the extra performance delivered by the winners.
This is a very important segment in destinations tourism statistics for a number of reasons - these visitors usually return with family and friends on a second more regular visit; they usually spend up to three times what regular visitors spend as they don't have the travel bill to worry about; they spend their money on all the extras, such as shopping, art, local crafts and restaurants, which is great for the local economy and job creation; and these guests get to experience the best of the destination and become fantastic ambassadors. This is also a multibillion-dollar annual marketplace that is growing as developing economies understand the power of using structured incentive schemes to drive company performance.
How does the development of incentive travel in Asia compare with the United States and Europe? Are there any differences?
Incentive travel has two realms we need to frame the conversation in. There are incentive travellers coming into Asia from all over the world, and there are incentive travellers going out.
Inbound incentive travel is different in Asia because of the unique experiences that can be had in the destination. These unique qualities are great differentiators, and companies wanting to attract incentive travellers to Asia will use these differences to encourage companies to bring their top people to your destination.
Other destination differentiators that are essential are the service levels of the local destination management companies, hotels, venues and facilities. If these are poor, the destination will suffer.
The second part of this market is the outbound incentive business from Asia to the world. This is in a maturing phase, a very high growth phase and one that the regional and world's destinations are counting on for boosting their tourism economy.
The challenge I have observed is that in China, incentive travel is a relatively new concept and there are not that many incentive companies at the same level as in Europe and the US. In some cities, these types of businesses don't even exist. This is not to say incentives are not being organised, but corporates are doing it themselves and using local travel agents to book trips to a destination for a group of winners.
This is how the industry starts, and as the requirements from corporate clients become more sophisticated, so specialisation companies will emerge to meet the needs.
SITE held its international conference in Beijing last September. Why did the association choose Beijing? What's your impression of the city as an incentive destination?
SITE is one of the first associations in the MICE environment that has worked together with the authorities to establish a chapter in China. We saw this as a strategic imperative that SITE grows in China and that it makes a valuable contribution to elevating and partnering with China for its tremendous inbound and outbound incentive travel potential.
The conference choice of Beijing demonstrates the commitment SITE has made as well as the fact that the bid by the city to host the conference was world-class and tremendously well-supported by the city and all the key stakeholders.
My impression of Beijing is that the city is a great destination for incentives, and the quality of professional DMC's that have specialised in receiving incentive groups to the city are of a very impressive level. The hotels, facilities and venues the city offers are staggering in variety, location and uniqueness.
What do you think the Beijing city government can do to improve its attractiveness as an incentive destination? And what about the environment, given the city's pollution problem?
The pollution issue is certainly a black cloud that hangs over and dulls the perception of the city. No one wants to arrive in a city and not be able to see blue sky and breathe easy on the streets. I think the city is painfully aware of this and I hope there will be serious action taken to resolve this in the following years. I have experienced blue-sky Beijing more often than not, but when the pollution sweeps in it is rather unpleasant.
Apart from Beijing, do you see other Chinese cities having particularly strong potential for developing incentive travel?
Unfortunately my travel has been limited to Shanghai, Beijing, Xi'an and Hong Kong, but I hear from colleagues who have travelled more widely that there are many other destinations in China that will easily compete for regional and international incentive travellers once the local tourism authorities understand how to market and up-skill their supply chain to be ready for this demanding incentive client base.