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Companies Mold Travel Perks Into Journeys of Growth

The nonprofit Incentive Research Foundation estimates that U.S. businesses spend $22.5 billion annually on incentive travel perks, geared to rewarding worker performance and discouraging those top employees from flirting with career prospects at other companies.

Patrick Burkhardt

Leaders of San Diego-based Luxpitality, which recently relocated its headquarters from Scottsdale, Ariz., to East Village, contend that those travel-based goodies must increasingly be geared to social and work-culture priorities — not just a need to temporarily get away from the office — if those perks are to result in actual worker loyalty.

Patrick Burkhardt, Luxpitality’s co-founder and chief idea person, said that’s especially true of millennials and other younger workers known to job-hop more frequently than their older peers, and more apt to choose employers whose priorities line up with their own definitions of social responsibility and quality of life.

Established in San Diego in 2015, the company has 20 offices worldwide, covering more than 40 territories. It partners with four- and five-star independent hotels and small brands, along with their in-bound traveling corporate customers, to customize travel options that align with corporate goals.

‘Different Kind of Experience’

Burkhardt said the business model generally goes beyond setting up corporate travelers with tourist-oriented visits, or with traditional “retreats” and other team-building activities long used by businesses.

“The new-age company and the millennial-age worker are looking for a different kind of experience,” Burkhardt said.

As a case in point, Burkhardt said his company recently worked with L’Auberge Del Mar, which was in the process of welcoming a delegation of executives from the United Kingdom, employed by a health care-related company and in town to attend an industry conference.

Instead of setting up trips to popular local tourist spots, Luxpitality worked with the hotel to put the visitors in touch with a local charity that assembles children’s bicycles for distribution to families in need. When the workers were not at their conference, they were putting together bikes and helping deliver them to their young recipients.

Burkhardt said that kind of experience matches up with the workers’ own instincts toward social good, and their employer enjoys a halo effect for setting them up with that kind of experience. While the results are mostly anecdotal at this point, the theory is that this type of incentive travel will help boost worker retention and recruitment over the long haul.

While the privately held company does not report revenue, Luxpitality said it worked during 2016 to create “customized group trip experiences” for 30 companies worldwide. Burkhardt said the client roster is growing, with the firm working year-to-date with more than 60 companies so far in 2017.

Luxpitality has five full-time workers — all of them among its founders — and works with about 50 contracted sales personnel on the ground in its various global service areas.

In its 2017 trends study issued earlier this year, the Virginia-based Incentive Research Foundation noted that the portion of U.S. businesses using noncash rewards for workers rose from 26 percent in 1996 to 84 percent in 2016.

Much of this stems from a shift to a service-focused economy and rising evidence that employee engagement translates into better revenue performance and higher company stock prices.

Inclination to Give

Crystal Sargent

Nearly 40 percent of U.S. businesses now use incentive travel in some manner to reward and recognize top-performing employees, with per-person budgets for such programs typically ranging from $3,000 to $4,000.

The challenge for employers, researchers said, will include crafting “next level” experiences that translate into emotional connection with employees, including tapping into their inclination toward social responsibility and charitable giving.

Crystal Sargent, founder and CEO of San Diego-based business consulting firm Invested Advisors, said a 2016 trip to France prompted her to form a new division, known as Invested Traveler, geared to helping clients plan more meaningful, experience-oriented travel incentive programs.

For one corporate client, her firm matched up a worker who was nearing retirement with a behind-the-scenes tour of the Eiffel Tower in Paris, where she could learn the ins and outs of operating a popular tourist site — security, communication and other personnel management matters.

Other clients, in industries such as medical devices and real estate, are seeking travel experiences that help workers get to know countries where the company is looking to expand its footprint.

“There are industries that tend to have issues with recruiting or have high sales goals, so the companies have expressed interest in finding ways to improve their retention,” Sargent said.

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