Corporate incentive and special events programs are under intense scrutiny as companies scour their spreadsheets for cost-cutting measures and seek ways to ensure a return on entertainment dollars.
The programs, which reward performers or employees for a job well done or are given to boost morale, consequently are morphing into a new type of event that encourages teambuilding and networking while conforming to stringent requirements.
The result isn’t quite all work and no play, but the fun may take place closer to home and have a business component.
“Today it’s about bonding and teambuilding, along with a meeting along with incentive (activities),” said Pirjo Niemi, senior vice president of operations at Newport Beach-based Ambassadors International Inc., which specializes in incentive travel.
On average, domestic incentive trips last three to four days, while international trips last five to seven days.
A focus on corporate ethics and intense scrutiny by stockholders of public companies make the corporate market fidgety about such frivolity.
“Incentives are supposed to be about synergy, having top (performers) together with access to senior management and everyone exchanging ideas,” said Sandy Amorde, president of San Juan Capistrano-based Amorde Incentive Marketing.
Amorde, who counts Corinthian Colleges Inc. and a group of financial estate planners among her clients, said that premise is going by the wayside as companies pare down programs or eliminate them after combining with other companies.
Budget is King
Now, everything is about budget and the bottom line, sending planners back to the drawing boards to meet the new requirements.
“There are no blank checks,” said Barbara Sloate, president of Whirlaround Destination Management in Costa Mesa.
U.S.-based companies are more likely to increase their budgets than companies based outside the U.S. next year, according to a recent survey by the Society of Incentive Travel Executives. Some incentive planners say their clients have no qualms about canceling a program if the company performance isn’t strong.
“(Executives) are very aware of the perception of wasteful spending,” said Kathryn Jurgensen, president of Premier Meetings in Irvine.
Jurgensen, who works exclusively with high-end executive programs, said her clients want to demonstrate that they adhere to the budget and that there is a compelling value to the high-level meeting or incentive at a high-end resort.
“They’re living under a microscope now,” she said. “There’s a duty of care to have the programs because they’re important to the company and morale, but they have to do it wisely.”
In Orange County, even an employee dinner for 150 can cost $25,000 to $50,000, including the bar. On a broader scale, about 30% of international incentive programs carry a $3,000 per person average price tag, according to the SITE survey. Those costs become a particular concern if the company isn’t performing up to expectations.
Planners say typical cost cutting might come from trimming the number of participants, shortening trips or cutting back on food and beverage events.
Incentive specialists like Amorde, Ambassadors or JNR Inc. in Irvine help them control costs.
“We try to maximize value through multiyear contracts,” said Maria Dales, vice president of creative services for JNR, which typically stages events for large companies.
JNR offers three budget levels to every client so they can see the difference in levels of service, food or entertainment and choose the one that best suits their needs, Dales said.
Through its entertainment division, JNR recently staged a concert by former Righteous Brother Bill Medley for 700 people from Beckman Coulter Inc. in Fullerton that met the company’s budgeting requirements.
Community Service Elements
Public companies in particular are concerned about the image they project to stockholders when they host a teambuilding sailing regatta in Newport Beach or a retreat at Montage Resort & Spa.
One resulting trend is the addition of a philanthropic component that conveys a sense of social responsibility alongside the event.
Incentive and event companies universally say that giving back to the community is an integral part of today’s incentive travel. Typical activities might include beach clean-ups, building projects for groups like Habitat for Humanity, silent auctions for a local charity or work with local youth groups.
But no one wants to be Bob Cratchit all the time. Incentives do go on,many of them with elaborate (yet cost-effective) and entertaining themes staged by OC-based companies.
“It can’t be all books and classrooms,” JNR’s Dales said. “The networking is important.”
Today, networking increasingly includes a wider choice of activities.
On a recent trip to San Antonio with one OC client, Amorde offered a choice of cave walking and rock climbing, a tour to the mission, or a city tour with river rafting. She also finds cooking classes or wine instruction get high marks.
“They don’t want to just lie on the beach and do nothing,” she said.
Incentive companies get their clients from all walks of corporate life, including real estate, technology, financial services, insurance and automotive. Each has its own idea of fun.
Planning companies like Ambassadors, JNR and Whirlaround have set up special programs at the Festival of Arts and Pageant of the Masters or Sawdust Festival in Laguna Beach, the Marconi Automotive Museum in Tustin, [seven-degrees] in Laguna Beach, and the Mission San Juan Capistrano.
They’ve taken groups whale-watching from Newport Beach or Dana Point, to golf courses for tournaments or banquets and to Catalina. They go to Miramar Air Station or the USS Midway in San Diego for military-themed events.
Most often, they end up at the beach.
“The ocean is still a draw, whether they do a beach event or not,” Niemi said.
Teambuilding Tactics
Teambuilding events are particularly popular today and take many forms, though they all strive to achieve both a business and social purpose.
“The Iron Chef concept is a very popular event with groups, as well as sailing regattas and artist-related events where (attendees) paint a canvas based on a given topic,” said Kasey Spies, director of public relations for Montage Resort & Spa. Montage hosts as many as a dozen corporate events each month for Southern California-based companies.
Ambassadors set up a shopping spree at Fashion Island for one automotive client that included special services like a personal shopper along with shopping points worth dollars at the center’s retailers.
Educational programs designed around wine remain a group favorite. Places like the Wine Artist near Irvine Spectrum offer wine tasting and wine bottling combined for a different twist on wine tasting.
Themed special events remain in vogue, though the themes change with the times. Sloate once used a retro Mr. Lucky theme on a Newport yacht. The 1940s-era theme extended to hairstyles, a black and white color scheme, and 1940s-era food like green bean casseroles with onion rings and Jello molds.
For one aviation client, she staged a chili cook-off with a twist: Besides developing a chili recipe, they were asked to come up with a ‘chili chant’ to promote the product.
“Some of them were printable,” Sloate said.
JNR, which has staged events for BMW, Santa Ana-based Ingram Micro Inc., Irvine’s Kia Motors America Inc., Mitsubishi and several divisions of Toshiba, did a James Bond theme for 450 aboard the Entertainer yacht in Newport Harbor for a Toshiba dealer meeting.
The company also once staged a “License to Kill” James Bond-themed event that included a “killer buffet” with Bond-themed titles at each buffet station.
JNR’s entertainment division also produced a “House of Blues with Jim Belushi” on the front lawn of the St. Regis in Dana Point.
Ambassadors’ Nieme believes the variety of options available for incentive groups in Southern California is a real plus at a time when air travel is fraught with delays. Some clients don’t want to spend big bucks on travel to distant resorts when incentive attendees might arrive more stressed than when they left. By staying closer to home, attendees can drive, she said.
“Orange County’s diverse options and consistent weather keep groups coming back,” Nieme said.
“I believe (incentive business) will remain strong in Southern California if there are no disasters.”
Ambassadors Partners With New Publication
Newport Beach-based Ambassadors International Inc. in June joined with Southern California Meetings + Events, a new publication, to help promote Southern California events, venues and programs.
At a June launch in Orange County staged by Ambassadors, the magazine’s staff promised readers “the most current information on trends, hot ideas, and innovations that directly affect the meetings and event community in Southern California.”
“We wanted to ally with and support a publication that focuses on this region,” said Gretchen Stegall, director of corporate marketing for Ambassadors, which arranges incentive travel for its clients.
“Their audience of 20,000 reaches our market,” she said.
The new quarterly publication, produced by Tiger Oak Publications of Minneapolis, also will launch a Northern California edition in early 2008.
CORRECTION:
Barbara Sloate should have been identified as director of sales, DMC services, for Corporate Diversions in Newport Beach.
