IRF Study Finds Incentive Industry’s Economic Expectations Mixed
Incentive industry businesses ended 2016 somewhat optimistic about the economy and its impact on the industry. The data comes from the Incentive Research Foundation (IRF) and its 2017 Outlook Study, an analysis of how incentive, rewards and recognition programs are being designed and budgeted for 2017. The study also introduced the IRF’s Net Optimism Score, a simplified metric to track the economic outlook for the incentives industry.
The IRF funds and promotes research to advance the science and enhance the awareness and application of motivation and incentives in business and industry. For its most recent Outlook Study, conducted in the fall of 2016, nearly 250 industry representatives including suppliers, corporate end users, and incentive house representatives gave their feedback on the outlook for U.S. incentive travel and reward programs in 2017.
“The IRF has tracked the vitality and variability in the incentive, rewards and recognition market for almost 10 years,” says IRF President Melissa Van Dyke. “The IRF 2017 Outlook Study not only provides up-to-date industry data, it also puts this year’s findings in a historical and cyclical context, so we can deliver a big-picture view of the industry.”
The IRF’s Net Optimism Score is the percentage of people providing a positive rating, subtracted from the percent giving a negative rating. A higher positive score indicates optimism in the industry. The IRF’s analysis found that the Net Optimism Score within the incentive travel industry tracks closely with overall U.S. economic performance, often acting as a leading indicator.
The fall 2016 Net Optimism Score of 26 percent, reflecting the industry’s moderate confidence in the economy and how it would affect the industry, is down from the recent trend surpassing 50 percent that began in fall 2013 but ahead of the extreme lows seen in 2009 and 2011. And while budgets are increasing for incentive travel programs, most of those surveyed said that costs are increasing more than budgets. Incentive merchandise and gift card programs are expected to continue enjoying positive benefits from the economy, but the degree of optimism has diminished over the past year.