The biggest debate in incentive travel today is no longer where to go, but whether the destination feels stable enough to commit to.
By Janice Alyosius
A few years ago, incentive travel conversations usually began with destinations, gala venues, and experience ideas. Today, the initial questions are very different. Can flight costs remain stable for the next three months? Is the airline route reliable? What happens if geopolitical tensions escalate suddenly? Will hotels offer flexibility if plans change midway?
That shift in conversation is now visible across the MICE industry. Corporate incentive travel is still moving ahead, but planners are approaching every programme with far more caution than before. Rising fuel surcharges, fluctuating forex rates, airline disruptions, and operational uncertainty are forcing companies to recalculate budgets almost constantly. In many cases, the destination itself is no longer the first priority — stability, connectivity, and flexibility are.
What makes the current situation more complex is that demand for incentive travel has not slowed. Companies still see value in rewarding employees, strengthening internal culture, and retaining talent through shared experiences. But the way those programmes are being designed has changed significantly. Long-haul itineraries are being shortened, destinations are being reconsidered, and contingency planning is becoming just as important as the experience itself.
Balancing Cost & Care
Across the industry, corporates are trying to strike a balance between maintaining employee engagement and keeping travel costs under control. Shenaz Kanorwalla, Associate Director and Head – Business Travel and Events, Cipla, said the company has consciously slowed movement timelines instead of cutting back entirely. “While overall incentive travel budgets have not been revised, we have taken a prudent approach by deferring internal team incentive programmes to the second half of the year (H2). This allows us to balance cost pressures without compromising the overall incentive strategy. Due to ongoing operational and connectivity challenges, several stakeholder group movements have also been deferred to Q2 of FY27, allowing for greater stability and improved travel experience,” she said.
The conversation around value is also changing. John Dennis L, Travel & Facility Manager, Sea6 Energy, said incentive travel today is less about extravagant spending and more about creating practical yet memorable experiences. “Incentive travel is still around, but it’s being redefined. The focus is now on ‘memorable, cost-conscious experiences’ that inspire workers without going over budget, rather than ‘big-ticket exotic trips’. Incentive travel plans are also becoming more complex, combining local excursions for larger groups with selective high-profile destinations when budgets permit,”he explained.
Ajay Bhatt, Corporate Expert, said rising airfares have forced companies to fundamentally rethink programme design. “Rising airfares are pushing corporates to rethink incentive travel. There’s a clear shift from long-haul, high-spend programmes to shorter, high-impact experiences that deliver value without diluting intent. Today, corporates are far more cautious and are evaluating programmes through the lens of pricing, geopolitical confidence, and operational certainty,” he said.
A Region Reconsidered
Even as Southeast Asia and other value-driven destinations gain traction, the Middle East continues to remain part of the conversation for many corporates. Industry stakeholders say the region has not been ruled out permanently, but companies are now waiting for greater geopolitical stability, softer pricing, and more predictable operating conditions before committing large groups again.
Kanorwalla said the company remains open to reconsidering the region if conditions improve. “We remain open to reconsidering destinations such as the Middle East should geopolitical situation and pricing stabilise. Currently, we have not re-routed incentive groups, as European destinations have already been committed. Any future re-routing decisions will be evaluated based on cost, connectivity, and overall delegate experience,” she said.
Dennis believes the Middle East will continue to hold value, but perhaps in a different format than before. “Incentive travel plans are growing more complex, combining local excursions for larger groups with sporadic, high-profile locations like the Middle East when funds permit. Fuel price stability would undoubtedly pave the way once more, but the lessons learnt about sustainability, adaptability, and resilience are unlikely to be forgotten. Redefining when and how the Middle East fits into the incentive travel mix is more important than permanently leaving the region,” he said.
Bhatt added that corporates are now looking at the region through a far more cautious lens than before. If stability returns, destinations like the Middle East will come back into consideration, butthe decision will be driven by a combination of pricing and geopolitical confidence. Today, corporates are far more cautious — risk perception, travel advisories, and overall regional stability are playing an equally important role alongside cost. So, the shift is not permanent, but the lens has clearly changed from preferred destination to safe, stable, andvalue-backed choice,” he explained.
Southeast Asia Surges
As corporates become more cautious, Southeast Asia has emerged as one of the biggest beneficiaries of the shift. Countries like Thailand, Vietnam, Malaysia, and Sri Lanka are increasingly being viewed as practical alternatives because they combine affordability, shorter travel times, and easier access.
Nihaluddin, Sr Vice President & Business Head – MICE & OBT, Trail Blazer Tours India, said the shift has already become visible in company proposals and bookings. “For us as a company, we had exactly 33–35 per cent shift of various proposals from the Middle East to the SE segment, like Thailand, Malaysia, Singapore, and Vietnam. Thailand and Vietnam are the big gainers. Even though the night stays are reduced, the cost is still getting higher by nearly 20 per cent due to forex fluctuations and airlines revising fuel surcharge with or without prior notice,” he said.
Long-haul destinations are becoming increasingly difficult to sustain within earlier budget structures. “The fuel surcharge for long-haul destinations such as Australia, New Zealand, Bali, Japan, and Korea has impacted the length of stay for various clients. The budgets remain the same for clients, but what we were planning one year in advance has totally rattled because airfare revisions are happening constantly. Airlines are also adding riders that fuel surcharge may increase again at the time of final ticketing,” Nihaluddin explained.
Sea6 Energy is also actively rerouting groups towards alternate destinations such as Latin America including Colombia and Costa Rica, and Asian destinations, including Sri Lanka, Vietnam, and Bali, emerging as viable alternatives. These areas are perfect substitutes in the present cost-sensitive economy because they combine accessibility, affordability, and genuine experiences,” said Dennis.
Ahmad Maaz, Managing Director, Royal Tour & Travel India, said destination preferences are now being driven by operational ease as much as by experience. “We are seeing strong traction for regions such as Southeast Asia including Thailand and Malaysia, the Middle East, including Oman, and emerging destinations like Azerbaijan and Georgia. These offer a strong balance of cost efficiency, visa ease, and quality infrastructure. Planning cycles have also become longer, with corporates seeking early confirmations to lock in better pricing and avoid volatility,” he said.
Airfare Woes in Europe
While Southeast Asia gains momentum, Europe is beginning to feel the pressure of rising operational costs and airfare unpredictability. Nihaluddin pointed out that European itineraries have become increasingly difficult to plan because airfare structures have changed dramatically over the last year. “Europe is losing away as the Middle Eastern carriers like Emirates and Etihad always had a fare check as compared to the European carriers. Even today Middle Eastern carriers are offering around `60,000 for India to Switzerland return, while European carriers for the same route are nearly `90,000. The budgets remain the same for clients and what we were planning one year in advance has totally rattled,” he said.
The situation has become more complicated because of operational challenges linked to flight routes and airspace restrictions. “The biggest impact is because Air India and IndiGo Airlines in the last two years launched approximately 40-plus destinations, but due to the Pakistan airspace being closed for them they can’t fly direct to some important destinations in Europe, especially ex-Delhi. Since there is a shift of businesses from Europe to Australia and other alternatives, fares have doubled because demand is more and supply is less,” Nihaluddin added.
Bhatt said corporates are now prioritising destinations that minimise unpredictability. “There is a clear preference for direct routes, buffer-led itineraries and destinations with reliable infrastructure to avoid last-minute disruptions and ensure smooth group movement. Risk perception, travel advisories and overall regional stability are now playing an equally important role alongside cost. The lens has clearly shifted from preferred destination to safe, stable, and value-backed choice,” he said.
Safety takes centre stage
One of the biggest changes in corporate incentive travel is the growing importance of safety, insurance, and crisis management. What was once treated as a backend operational detail has now become central to planning discussions.
Kanorwalla said safety frameworks are now non-negotiable across programme planning. “The safety and well-being of travellers remain a top priority, and it is the corporate’s responsibility to ensure adequate safety assurances, insurance coverage, and robust crisis-management protocols at all times. Any future re-routing decisions will also be evaluated based on cost, connectivity, and overall delegate experience,” she said.
Dennis echoed a similar sentiment and said organisations today are far less willing to take risks around group movement. “In today’s incentive travel planning, safety guarantees, insurance coverage, and crisis management have evolved from ‘nice-to-have’ items to definite non-negotiables. Organisations are far less inclined to take chances when it comes to group travel due to growing geopolitical unpredictability, climatic catastrophes, and health concerns. Incentive travel now involves competent risk management in addition to comfort and rewards,” he said.
For travel companies, the impact of operational uncertainty is already being felt on the ground. Nihaluddin recalled how sudden airline cancellations disrupted planned movements and forced major itinerary revisions. “Two groups cancelled from Almaty and Tbilisi when IndiGo cancelled the flight just before the war. Now all the trips are combined, and they are travelling to Far East destinations like Phuket or Pattaya. The yearly award functions are happening at one place, the volume has increased, but the cost has again increased due to demand and supply, fuel surcharge, and forex fluctuation,” he said.
Maaz said stronger safeguards are now becoming standard practice across programme execution. “We ensure comprehensive travel insurance, work with vetted ground partners, and build contingency plans into itineraries. Real-time monitoring, on-ground support teams, and clear communication protocols are now standard practice. Connectivity continues to remain a critical factor, especially during peak season capacity constraints and pricing volatility,” he explained.
Adaptability Comes First
Alongside safety, flexibility has become one of the strongest deciding factors in corporate travel planning. Corporates today want contracts that can absorb sudden airfare hikes, schedule changes, and geopolitical uncertainty without creating major financial losses.
Bhatt said commercial flexibility is now heavily influencing supplier and destination selection. “This includes better group rates, value-add inclusions, flexible cancellation terms, and support on logistics. Partners who share risk are getting preference. Corporates are increasingly seeking adaptable contracts, flexible travel dates, and alternative destination options as part of a more cautious and strategic planning approach,” he said.
Kanorwalla added that suppliers who can offer transparency and alternatives are better positioned in the current market. “We would welcome early visibility into cost-effective destinations and hotel offerings that can be positioned as viable alternatives. Transparent pricing, value-added inclusions and flexible terms would significantly support our discussions with internal stakeholders. We remain open to reconsidering destinations such as the Middle East should geopolitical situations and pricing stabilise,” she said.
At the same time, suppliers themselves are finding it difficult to absorb unpredictable increases. Nihaluddin said forex movements and fuel surcharges are creating tension around existing commercial agreements. “Some are adjusting to the situation and understanding well, but some are going as per the contract which they have in place. Earlier we used to revise pricing if forex fluctuation crossed 2 per cent, but now some clients are not budging at all. In short, we are losing clients across segments and we cannot add new clients as a whole,” he said.
Rise of Value Travel
Tourism boards are also repositioning themselves to stay relevant in a more value-conscious market. South African Tourism believes destinations now need to compete on overall experience and ease rather than only airfare.
Mitalee Karmarkar, Marketing and Communications Manager (MEISEA), South African Tourism, said Indian corporates are increasingly evaluating complete itinerary value. “South Africa works well because it allows groups to experience wildlife, city life, culture, adventure, and scenic landscapes within a single itinerary, which helps optimise both time and on-ground spend. Indian travellers also typically spend around 10 to 14 days in South Africa, which allows them to truly immerse themselves in the destination and get more value out of the overall journey. Alongside this, initiatives like ETA and TTOS for group travel are making the process far more seamless and predictable,” she said.
She added that tourism boards are also working more closely with corporates and planners to adapt to changing expectations. “We’ve introduced our Corporate Think Tank series in India, where we engage directly with corporate decision-makers, MICE planners, and travel management companies. We are also working with over 40 South African tour operators, destination management companies, and event planning companies through our India roadshows. The focus is on building flexible, value-driven itineraries rather than only price-led incentives,” she said.
