CORPORATE INCENTIVE TRENDS A SURVEY & ANALYSIS Page 1 January 2013 Incentive Trends

© 2013 Penton Media Inc. Page 2 1 Introduction & Methodology 2 Key Findings 3 Survey Responses 3.1 Status of 2012 incentive programs 3.2 Comparison of 2012 sales revenue 3.3 Comparison of 2012 incentive budget compared to Reasons for reduction of 2012 incentive budgets 3.5 Top steps taken to cut expenses from group incentive travel budgets 3.6 Size of party and per person cost for 2012 major group travel incentive program 3.7 Causes of change to 2012 incentives 3.8 Primary challenges caused by changes to 2012 incentives 3.9 Portion of incentive trip spent in meetings 3.10 Purposes to use a virtual event in Form a CSR event took as part of incentive trip 3.12 Use of gamification on online incentive sites 3.13 Needing to prove ROI on incentive programs 3.14 Incorporating wellness into incentive trips 3.15 Use of social media to promote program to attendees 3.16 Status of 2013 incentive programs 3.17 Expectation of 2013 sales revenue 3.18 Change in incentive budget for 2013 compared to Factors causing a decrease in group incentive travel budgets 3.20 Steps that will be taken to cut program expenses for group incentive travel TABLE OF CONTENTS

Incentive Trends © 2013 Penton Media Inc. Page 3 SECTION 1: INTRODUCTION & METHODOLOGY OVERVIEW  Investigation conducted exclusively for Corporate Meetings & Incentives and The Incentive Research Foundation.  Methodology, data collection and analysis by Penton Research, the research arm of Penton Media, parent company of Corporate Meetings & Incentives.  Data collected December 13, 2012 through January 4,  Methodology conforms to accepted marketing research methods, practices and procedures. OBJECTIVES  Examine key trends in the corporate incentive market.  Obtain key demographics. METHODOLOGY  On December 13, 2012, Penton Media ed invitations to participate in an on-line survey to subscribers of Corporate Meetings & Incentive. Also, IRF deployed this survey to their membership. RESPONSE MOTIVATION  To encourage prompt response and increase the response rate overall, the following marketing research techniques were used: - A drawing was held for four $50 Visa gift cards. - Live links were included on the invitations to route respondents directly to the online survey. - The invitations and survey were branded with the Corporate Meetings & Incentives name and logo, in an effort to capitalize on subscriber affinity for Corporate Meetings & Incentives. - A follow-up invitation was sent to non-respondents on December 18, RESPONSE Usable surveys 79

Incentive Trends © 2013 Penton Media Inc. Page 4 SECTION 2: KEY FINDINGS Tell us about your 2012 incentive programs… The majority (79%) of the respondents did not cancel any of their incentive programs. Nearly half of the respondents (46%) saw sales revenue increase while only 17% saw their sales revenue decrease. One-third of respondents saw an increase to their 2012 incentive budgets while only one-fourth saw a decrease to their incentive budget. Overall the budgets we virtually unchanged with an increase of only 1.3% over their 2011 incentive budget. The majority of respondents saw their budgets reduced due to the economy (79%) and weak sales(53%). Nearly one-third (31%) of respondents did nothing to cut their program expenses. One-fourth of respondents had fewer members of management attend the event. 159 (estimated average) people were included in the 2012 major group travel incentive program with and average cost of $2,500 per person. The leading factor to cause a change to 2012 incentives was the reduction of budgets (41%). Nearly as many respondents (39%) did not have to change their 2012 incentives. Two-thirds of respondents found the primary challenge they faced was staying within their budget. The need to stay within budget has an influence on the next two most popular challenges selecting the destination (32%) and negotiating with suppliers (32%). Over half of respondents had attendees spending less than 40% of the incentive trip in meetings. The average percentage of incentive trip time spent in meetings is 36%. The changing face of meetings and incentives… Nearly two-thirds of respondents did not utilize a virtual event in When a virtual event is used, it is most likely used for informational meetings rather than incentive meetings. Two-thirds of respondents did not include a CSR event as part of their 2012 incentive trip. Just over 10% of respondents are using gamification on their online incentive sites. Nearly one-third of respondents (31%) are being asked to prove ROI for their incentive programs. Three out of ten respondents have incorporated wellness into their incentive trips. Nearly 40% of respondents use social media to promote their program to attendees. The majority of respondents using social media are using Facebook (60%) or Twitter (53%).

Incentive Trends © 2013 Penton Media Inc. Page 5 Looking ahead to 2013… 11% of respondents have already canceled some of their 2013 incentive programs. 90% of respondents expect their sales revenue to match 2012 or exceed it. Respondents 2013 incentive budget remains virtually unchanged from their 2012 budget, increasing by 2.4%. The economy (68%) is the major factor considered to cause a decrease in the budget for group incentive travel. The second factor weaker sales (29%) would be affected by the economy. One out of five respondents will take no steps to cut their expenses for group incentive travel. Actions that are planned are a combination of steps rather than just one step.

Incentive Trends © 2013 Penton Media Inc. Page 6 SECTION 3: 3.1 Status of 2012 incentive programs SURVEY RESPONSES The majority (79%) of the respondents did not cancel any of their incentive programs. Base: Respondents who are in-house planners of corporate incentive programs (n=79). Did your company cancel any of its 2012 incentive programs?

Incentive Trends © 2013 Penton Media Inc. Page Comparison of 2012 sales revenue Nearly half of the respondents (46%) saw sales revenue increase while only 17% saw their sales revenue decrease. Did your sales revenues… Base: Respondents who are in-house planners of corporate incentive programs (n=79).

Incentive Trends © 2013 Penton Media Inc. Page Comparison of 2012 incentive budget compared to 2011 Base: Respondents who are in-house planners of corporate incentive programs (n=79). How did your 2012 incentive budget compare to 2011? One-third of respondents saw an increase to their 2012 incentive budgets while only one-fourth saw a decrease to their incentive budget. Overall the budgets we virtually unchanged with an increase of only 1.3% over their 2011 incentive budget.

Incentive Trends © 2013 Penton Media Inc. Page Reasons for reduction of 2012 incentive budgets Base: Respondents who had a reduction to their 2012 budget, multiple answers permitted (n=19). Due to small sample size, this data should be used for directional purposes only. Your 2012 budget was reduced, what were the reasons? The majority of respondents saw their budgets reduced due to the economy (79%) and weak sales(53%).

Incentive Trends © 2013 Penton Media Inc. Page Top steps taken to cut expenses from group incentive travel budgets Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). If your 2012 group incentive travel budget was reduced, what steps did you take to cut program expenses? (Top ten responses) Nearly one-third (31%) of respondents did nothing to cut their program expenses. One-fourth of respondents had fewer members of management attend the event.

Incentive Trends © 2013 Penton Media Inc. Page Size of party and per person cost for 2012 major group travel incentive program Base: Respondents who are in-house planners of corporate incentive programs (n=79). What was the size of your 2012 major group travel incentive program? 159 (estimated average) people were included in the 2012 major group travel incentive program with and average cost of $2,500 per person. What was the per-person expenditure for your 2012 major group travel incentive program?

Incentive Trends © 2013 Penton Media Inc. Page Causes of change to 2012 incentives Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Did you have to make changes to your 2012 incentives as a result of...? The leading factor to cause a change to 2012 incentives was the reduction of budgets (41%). Nearly as many respondents (39%) did not have to change their 2012 incentives.

Incentive Trends © 2013 Penton Media Inc. Page Primary challenges caused by changes to 2012 incentives Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). What were the primary challenges these changes created for you as you implemented your 2012 programs? Two-thirds of respondents found the primary challenge they faced was staying within their budget. The need to stay within budget has an influence on the next two most popular challenges selecting the destination (32%) and negotiating with suppliers (32%).

Incentive Trends © 2013 Penton Media Inc. Page Portion of incentive trip spent in meetings Base: Respondents who are in-house planners of corporate incentive programs (n=79). What percentage of your 2012 incentive trip was spent in meetings (during the day)? Over half of respondents had attendees spending less than 40% of the incentive trip in meetings. The average percentage of incentive trip time spent in meetings is 36%.

Incentive Trends © 2013 Penton Media Inc. Page Purposes to use a virtual event in 2012 Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). For which of the following purpose(s) did you use virtual events in 2012? Nearly two-thirds of respondents did not utilize a virtual event in When a virtual event is used, it is most likely used for informational meetings rather than incentive meetings.

Incentive Trends © 2013 Penton Media Inc. Page Form a CSR event took as part of incentive trip Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). In 2012, if you offered a CSR event as part of your incentive trip, what form did it take? Two-thirds of respondents did not include a CSR event as part of their 2012 incentive trip.

Incentive Trends © 2013 Penton Media Inc. Page Use of gamification on online incentive sites Base: Respondents who are in-house planners of corporate incentive programs (n=79). Have you added gamification to your online incentive site? Just over 10% of respondents are using gamification on their online incentive sites.

Incentive Trends © 2013 Penton Media Inc. Page Needing to prove ROI on incentive programs Base: Respondents who are in-house planners of corporate incentive programs (n=79). Are you being asked to prove the ROI of your incentive program? Nearly one-third of respondents (31%) are being asked to prove ROI for their incentive programs.

Incentive Trends © 2013 Penton Media Inc. Page Incorporating wellness into incentive trips Base: Respondents who are in-house planners of corporate incentive programs (n=79). Do you incorporate wellness into your incentive trips? Three out of ten respondents have incorporated wellness into their incentive trips.

Incentive Trends © 2013 Penton Media Inc. Page Use of social media to promote program to attendees Base: Respondents who are in-house planners of corporate incentive programs (n=79). Do you use social media to promote your program to attendees? Nearly 40% of respondents use social media to promote their program to attendees. The majority of respondents using social media are using Facebook (60%) or Twitter (53%). Which medium do you use to promote your program? Base: Respondents using social media to promote programs, multiple answers permitted (n=30).

Incentive Trends © 2013 Penton Media Inc. Page Status of 2013 incentive programs Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Has your company canceled any of your 2013 incentive programs? 11% of respondents have already canceled some of their 2013 incentive programs.

Incentive Trends © 2013 Penton Media Inc. Page Expectation of 2013 sales revenue Base: Respondents who are in-house planners of corporate incentive programs (n=79). Compared to 2012, do you expect your 2013 sales revenues to...? 90% of respondents expect their sales revenue to match 2012 or exceed it.

Incentive Trends © 2013 Penton Media Inc. Page Change in incentive budget for 2013 compared to 2012 Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). How will your 2013 incentive budget compare to 2012? Respondents 2013 incentive budget remains virtually unchanged from their 2012 budget, increasing by 2.4%.

Incentive Trends © 2013 Penton Media Inc. Page Factors causing a decrease in group incentive travel budgets Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Your 2013 group incentive travel budget will be reduced, will that be a result of...? The economy (68%) is the major factor considered to cause a decrease in the budget for group incentive travel. The second factor weaker sales (29%) would be affected by the economy.

Incentive Trends © 2013 Penton Media Inc. Page Steps that will be taken to cut program expenses for group incentive travel Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). If your 2013 group incentive travel budget will be reduced, what steps will you take to cut program expenses? (Top seven responses) One out of five respondents will take no steps to cut their expenses for group incentive travel. Actions that are planned are a combination of steps rather than just one step.