INCENTIVE TRAVEL AS A MOTIVATIONAL TOOL – HOW BUSINESSES AND INDIVIDUALS BENEFIT by Ms. Aniko Takacs Budapest, Hungary
1. Introduction
I have been working at an incoming travel agency in Budapest, Hungary for two years. Before that I was at a Five-Star hotel in the city center for eight years that both handle a lot of incentive and conference groups. In my present position in sales and operations, I have had the opportunity to get to know and fulfill the high demands these kinds of groups have. It has given me an objective picture from both points of view regarding their respective benefits.
Aktiv Tours Budapest is the third largest incoming agency in Hungary. It has been in business 17 years and gets 30% of annual revenue from incentive groups. This experience has helped me to collect all the necessary information for my paper. Aktiv Tours is one of the 10 recommended DMC’s by the Hungarian Convention Bureau.
2. Motivation in General
Motivation is a very important part of human resources management. The aim of motivation programs is to create strategies and systems that help companies get the right employees in the right positions, and keep them motivated. Beside these main aims further aims can be: to encourage employees to work through their full scheduled working hours, to maintain and improve their skills, to be flexible in their work, willing to work as a team, willing to work extra hours, if necessary, and try to help the company reach its annual goals.
It is always difficult for the employer to find the right motivational package for each employee that makes the above results close to 100%.
Certainly motivation management does not mean only salary, it means a wider package. This package contains: external and internal motivation, financial and non-financial items.
The motivational system can be an effective package for the individuals only if it is efficient, flexible and designed for the employees, and not too costly for the company.
The main items of a motivational package are:
- Base salary (with possible bonuses)
- Performance pay – like commission, bonus and profit-sharing.
- Other incentives – that can be financial, like food-money, funding pensions, etc., that companies pay on behalf of the individual, and non-financial, like a company car, incentive travel, presents after reaching some pre-set goal, a company telephone, the possibility of promotion, moving to an other country with more responsibilities, etc..
In order to run the motivational system properly within a company it is essential to check the system and make changes yearly in the packages.
3. Business/Incentive Travel
Business travel is a fast-expanding sector of the travel and tourism industry, accounting for between one quarter and one third of travel-related spending in most developed countries. This is in recognition of the crucial part it plays in enhancing the efficiency and effectiveness with which business is conducted throughout the world.
Incentive travel primarily is used in programs to increase sales, purchases, or, in the case of employees, productivity or quality. The official definition by the Society of Incentive & Travel Executives (SITE) says that incentive travel rewards people for specific results in formal incentive programs. Many companies that offer travel, however, use it in loosely structured programs in which employees or customers are singled out to attend a motivational meeting. What distinguishes incentive or motivational travel from traditional travel is the focus on creating an extraordinary experience for the winner, or an experience that builds morale, communicates the corporate message, or fosters improved communications between the company and its employees or its customers. Businesses use incentives to:
- Motivate employees to work toward a common goal;
- Recognize performance;
- Get people to make a purchase they might not otherwise make;
- Reinforce a marketing message.
Non-cash awards such as travel are used to avoid the pricing or compensation issues raised by the use of cash. Individual incentive travel has grown increasingly popular at companies that realize they can inspire a higher level of performance by letting their winners travel independently. This trend represents profitable, easy-to-handle business for travel companies with the right approach.
Major players in today's incentive travel and motivational meetings business include airlines, cruise lines, hotels, destination management companies, adventure travel suppliers, corporate-events consultants, restaurants, and attractions. The incentive travel and motivational meetings businesses often can account for as much as 30-50 percent of a supplier's group business.
4. How Businesses Benefit
Companies have the motivation program as a tool to move employees out from under their daily work routine and away from careless behavior. If the company management has already decided on an amount that can be spent for the employees, the right motivational package, including a nice incentive trip, can offer the following benefits:
- Loyalty for the company will increase
- Employees get to know other destinations and may consider working for the company elsewhere
- Working teams can be together and the working relationships can be strengthened
- After working hard to earn the trip people feel ready to work hard for future goals
- Though the trip is a cost to the company, there are offsetting tax benefits
- It creates good PR for the company; the employees will tell everybody about the generosity of their company for providing the trip.
5. How Individuals Benefit
All employees like travel. They like getting to know new cultures, they are proud to reach destinations that they would have never visited in their private life. They feel that the fruit of their all-year work is ready-to-eat. They will be open-minded for the future; they learn to embrace new ideas and are willing to follow them. They like to be rewarded for their work and maybe promotions can take place during the incentive trip. They will be proud of themselves as they have been selected for such a high level trip and they will tell to all relatives/friends that the company has done something for them.
5. Incentive Travel
5.1 A unique destination: Budapest, Hungary
As our study was written in Hungary, one of the best-developed countries of the Central-Easter Europe region, I tried to collect those facts that would be persuading points to an incentive-organizer in a company why she/he should choose our country.
General Attractions, Experience
- Still a fairly undiscovered destination with developed infrastructure
- Famous Hungarian hospitality, friendly people, many speaking English
- Majority of the Five-Star hotels present in the downtown area (mainly along the River Danube)
- Great variety of gala dinner venues, meetings (museums, palaces, stage of the Opera house, thermal baths, Parliament, City Hall etc.) offering excellent catering services and entertainment
- Politically stable and safe country
- Continuous developments throughout the city
- The best value for money in the region
- The only Formula 1 circuit in the region that is available for private functions
Geographical Attractions – Explore
- Central location in Europe, easy access
- Unique landscape (Budapest also called as Pearl of the Danube, often referred to as Paris of Eastern Europe: beautiful panorama, the river Danube dividing the city into a hilly and a flat part.)
- Several days of sightseeing possibilities, creative activities in Budapest • Further great variety of program possibilities in the surroundings of Budapest (within 30 minute transfer time)
Gastronomy – Taste
- The best cuisine of the region; more than the land of Goulash
- 22 historical wine regions offering gold medal winning red and white wines
- “Wine of the kings, king of the wines” --- the perfect combination of geographical conditions and the talent of local winemakers results in the world famous Hungaricum, the Tokaj wine.
Culture – Learn
- Over 1,000 year old living history, gorgeous architecture from past centuries
- Numerous World Heritage Sites
- Rich cultural life (many theatres, two opera houses, festivals, excellent artists)
- Hungarian inventions, expositions (Rubic cube, pen with roller-ball, transformator)
- Still existing Jewish traditions: biggest synagogue in Europe (second largest in the world after New York.)
- Traditional colorful folk art
- Reveal the secrets of communism: Last evidence of communism still exist
Get Music - Feel
- Classical music traditions, more Hungarians represents our country all over the world – Franz Liszt, Bela Bartok, and the famous conductors like Mr. Dohnányi, Mr. Ormándy, Sir Solti
- Lively gypsy music represented by the world famous Rajko and 100-member Gypsy Orchestras but modern music, jazz as well.
Relax – Baths
- Pamper yourself in one of the city’s traditional thermal baths: Budapest has the most thermal baths among the capital cities of the world
5.2 Incentive travel in Hungary – A Developing Sector of Motivation
5.2.1 General Position of the Hungarian Companies
With the arrival of multinational companies, Hungary started the using formal motivation programs. At the moment the major motivational items are related to the cash and rarely to non-cash awards. The most common are:
- A monthly salary (with the usual extensions, like 13th months payment)
- A moving salary – based on a performed work, like commission, bonus, share from the profit
- Other incentives : can be financial, like food-money, a pension fund that the company pays for the individual, and non-financial, like a company car or company telephone
Incentive travel is not really common yet mainly due to taxation reasons. The company needs to pay more VAT after the extra services that are spent for advertising and for the employees. We hope that this will change soon. Until that time incentive travel is usually domestic excursions for employees that last for only one day with activities and meals.
5.2.2 Incentive Groups Organised by Aktiv Tours Budapest
The main point in organizing and handling an incentive group is to get to know the concept of the organiser company, how they would like to motivate their employees, what is the main task of the team building. We need to be able to implement ourselves to an attendees place and find the right way to fulfill the demands of the company and the individual employee as well. The incentive offer, the presentation should reflect to these key points, and this can be a start of a longer success.
After a long meeting/phone discussion we are able to obtain this information from our clients, certainly we need to make some individual researches as well to get as many information as possible from the company. As we are selling Hungary as a destination, we need to find out as well whether they ever had any trips to our country yet in the near past.
Our offers needs to be very attractive, full of pictures, that represents the creativity and those major points as well that were discussed with the client before.
So, actually our task is to get both parties (employee and employers) in line with each other and make an unforgettable event that will be useful for them.
5.2.3 Benefits for the Employees of Aktiv Tours Budapest
We, the Aktiv Tours employees – 12 persons altogether - are getting benefits from our company as well. Besides the “usual” incentives, like food-money, company car for the management level, monthly public transportation card for the others, we are taking part on two incentive trips per year.
- One trip is usually a two-day fam trip within the country combined with leisure and wellness service and inclusive of all meals and accommodations and entertainment.
- The other trip is a “real” incentive trip, that is taking place always somewhere abroad within Europe, usually a long weekend team building, combination of cultural and leisure activities.
6. Summary
Overall we can summarise that our country is rather a receiving destination of the incentive travel market than a sending country. We have already reached the expectations for any organised trips to our country; we are strong in handling our guests on a professional and high level of service, but we – in this I mean the whole legal structure of the country – need to make strong efforts for improving the possibilities for those who are working in the country in terms of employment motivation. So, we are able to maximise the benefits of an incentive travel for the company and for the individuals as well in case we take all the above mentioned patterns into consideration.
