Incentive Trends January 2013 CORPORATE INCENTIVE TRENDS A

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

TABLE OF CONTENTS 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 2011 3. 4 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 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 2012 3. 11 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 2012 3. 19 Factors causing a decrease in group incentive travel budgets 3. 20 Steps that will be taken to cut program expenses for group incentive travel Incentive Trends © 2013 Penton Media Inc. Page 2

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, 2013. § 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 e-mailed 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 e-mail 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, 2012. RESPONSE Usable surveys 79 Incentive Trends © 2013 Penton Media Inc. Page 3

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 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 2012. 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 4

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 5

SECTION 3: SURVEY RESPONSES 3. 1 Status of 2012 incentive programs The majority (79%) of the respondents did not cancel any of their incentive programs. Did your company cancel any of its 2012 incentive programs? 79% No 9% Both merchandise and travel 13% Yes, canceled travel 0% Yes, canceled merchandise 0% 20% 40% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 6 60% 80%

3. 2 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 2011 -2012 sales revenues… Decrease; 17% Increase; 46% Stay the same; 37% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 7

3. 3 Comparison of 2012 incentive budget compared 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. How did your 2012 incentive budget compare to 2011? 4% Increased significantly (more than 25%) 9% Increased moderately (11% to 25%) 20% Increased slightly (6% to 10%) 42% About the same (5% to -5%) 17% Decreased slightly (-6% to -10%) 5% Decreased moderately (-11% to -25%) 3% Decreased significantly (more than -25%) 0% 10% 20% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 8 30% 40% 50%

3. 4 Reasons for reduction of 2012 incentive budgets The majority of respondents saw their budgets reduced due to the economy (79%) and weak sales(53%). Your 2012 budget was reduced, what were the reasons? 79% The economy 53% Weak sales 37% External market perception Weak business case to senior management 16% Media perception 16% 11% Perceptions of internal employees Other 5% 0% 20% 40% 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. Incentive Trends © 2013 Penton Media Inc. Page 9 60% 80%

3. 5 Top steps taken to cut expenses from group incentive travel budgets 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. If your 2012 group incentive travel budget was reduced, what steps did you take to cut program expenses? (Top ten responses) 31% None 26% Had fewer management attend 22% Cut the number of on-site gifts Used second-tier cities/ avoided “glamour” destination 19% Had fewer qualifiers attend 19% Did not use five-star properties 19% Cut sponsored activities (spa, golf, tours, etc. ) 19% 17% Booked shoulder or off-season Shortened the length of the trip 16% Cut spouses/guests 16% 0% 10% 20% 30% Base: Respondents who are in-house planners of corporate incentive programs , multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 10 40%

3. 6 Size of party and person cost for 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 person. What was the size of your 2012 major group travel incentive program? What was the per-person expenditure for your 2012 major group travel incentive program? 11% Over 500 people 7% 300 to 499 people 250 to 299 people 4% 200 to 249 people 7% 10% 22% $1, 000 to $1, 999 20% 19% Less than $1, 000 33% Under 50 people 0% 28% $2, 000 to $2, 999 16% 50 to 99 people 11% $3, 000 to $3, 999 13% 100 to 149 people 4% $4, 000 to $4, 999 9% 150 to 199 people 16% $5, 000 or more 30% 40% 0% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 11 10% 20% 30% 40%

3. 7 Causes of change to 2012 incentives 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. Did you have to make changes to your 2012 incentives as a result of. . . ? 41% Reduced budgets 39% N/A 19% Pressure from top executives in the company Perceptions of internal employees 14% Market pressure 14% Concerns about potential media scrutiny 10% Competitor pressure 10% 8% Federal legislation State legislation 0% Local legislation 0% 0% 10% 20% 30% Base: Respondents who are in-house planners of corporate incentive programs , multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 12 40%

3. 8 Primary challenges caused by changes to 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%). What were the primary challenges these changes created for you as you implemented your 2012 programs? 67% Staying within my budget Selecting the destination 32% Negotiating with suppliers 32% 29% Generating excitement 22% Promoting the program 6% Enrolling dealers/distributors/brokers/resellers 2% Other 0% 10% 20% 30% 40% 50% 60% Base: Respondents who are in-house planners of corporate incentive programs , multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 13 70%

3. 9 Portion of incentive trip spent in meetings 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%. What percentage of your 2012 incentive trip was spent in meetings (during the day)? 11% 80 -100% 8% 60 -79% 18% 40 -59% 26% 20 -39% 37% 1 -19% 0% 10% 20% 30% 40% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 14 50% 60% 70%

3. 10 Purposes to use a virtual event in 2012 Nearly two-thirds of respondents did not utilize a virtual event in 2012. When a virtual event is used, it is most likely used for informational meetings rather than incentive meetings. For which of the following purpose(s) did you use virtual events in 2012? 64% We did not use virtual meetings To augment all or part of an informational meeting 17% To replace all or part of an informational meeting 18% 9% To augment all or part of an incentive meeting 1% To replace all or part of an incentive meeting 0% 10% 20% 30% 40% 50% 60% Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 15 70%

3. 11 Form a CSR event took as part of incentive trip Two-thirds of respondents did not include a CSR event as part of their 2012 incentive trip. In 2012, if you offered a CSR event as part of your incentive trip, what form did it take? 67% We did not include any CSR activities Teambuilding event that gave back/left behind something for the local community 20% Teambuilding event that enriched lives of those outside the local meeting community 9% Other 7% Don’t know 5% 0% 10% 20% 30% 40% 50% 60% Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 16 70%

3. 12 Use of gamification on online incentive sites Just over 10% of respondents are using gamification on their online incentive sites. Have you added gamification to your online incentive site? Yes; 12% No; 88% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 17

3. 13 Needing to prove ROI on incentive programs Nearly one-third of respondents (31%) are being asked to prove ROI for their incentive programs. Are you being asked to prove the ROI of your incentive program? Yes; 31% No; 69% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 18

3. 14 Incorporating wellness into incentive trips Three out of ten respondents have incorporated wellness into their incentive trips. Do you incorporate wellness into your incentive trips? Yes; 30% No; 70% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 19

3. 15 Use of social media to promote 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%). Do you use social media to promote your program to attendees? Which medium do you use to promote your program? 60% Facebook 53% Twitter Yes; 39% 43% Linked. In group No; 61% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 20 Pinterest 3% Other 23% 0% 10% 20% 30% 40% 50% 60% 70% Base: Respondents using social media to promote programs, multiple answers permitted (n=30).

3. 16 Status of 2013 incentive programs 11% of respondents have already canceled some of their 2013 incentive programs. Has your company canceled any of your 2013 incentive programs? 89% No Yes, travel 7% Yes, merchandise 7% 0% 20% 40% 60% 80% Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 21 100%

3. 17 Expectation of 2013 sales revenue 90% of respondents expect their sales revenue to match 2012 or exceed it. Compared to 2012, do you expect your 2013 sales revenues to. . . ? Decrease; 11% Stay the same; 31% Increase; 59% Base: Respondents who are in-house planners of corporate incentive programs (n=79). Incentive Trends © 2013 Penton Media Inc. Page 22

3. 18 Change in incentive budget for 2013 compared to 2012 Respondents 2013 incentive budget remains virtually unchanged from their 2012 budget, increasing by 2. 4%. How will your 2013 incentive budget compare to 2012? 7% Increased significantly (more than 25%) Increased moderately (11% to 25%) 4% 24% Increased slightly (6% to 10%) 51% About the same (5% to -5%) 8% Decreased slightly (-6% to -10%) 5% Decreased moderately (-11% to -25%) 1% Decreased significantly (more than -25%) 0% 20% 40% Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 23 60%

3. 19 Factors causing a decrease in group incentive travel budgets 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. Your 2013 group incentive travel budget will be reduced, will that be a result of. . . ? 68% The economy 29% Weaker sales 16% External market perception 14% Media perception 7% Weak case to senior management 5% Perceptions of internal employees 14% Other 0% 10% 20% 30% 40% 50% 60% Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 24 70%

3. 20 Steps that will be taken to cut program expenses for group incentive travel 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. If your 2013 group incentive travel budget will be reduced, what steps will you take to cut program expenses? (Top seven responses) 29% We will cut the number of on-site gifts We will shorten the length of the trip 25% We will have fewer management attend 25% 22% We will cut sponsored activities (spa, golf, tours, etc. ) We will move from a long-haul destination to a North American-Mexico, U. S. , Canada-or Caribbean destination 21% We will have fewer qualifiers attend 21% None 21% 0% 10% 20% Base: Respondents who are in-house planners of corporate incentive programs, multiple answers permitted (n=79). Incentive Trends © 2013 Penton Media Inc. Page 25 30%