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The modern tourist industry is one of the largest, highly profitable, and most dynamically developing branches of the world economy. Tourism, as a service sector, is a significant tool for the redistribution of national income within the country, which has numerous effects on the development of many sectors of the economy. In the modern world, tourism has many varieties and forms that are affected by the growing mobility of society. An important role is played by the organized traveling with a business purpose, and especially by the encouragements of traveling. Incentive travel is one of the components of business tourism. At the moment, one of the fastest growing economic sectors in many countries is business tourism, which provides foreign exchange and job creation, the emerging of new travel destinations, as well as the development of the economy, science, education, culture, and health. Thus, incentive tourism has a significant role in the international economy development.
History of the Incentive Tour Emerging
Business tourism originated in ancient times, when people traveled in order to trade. Business purposes for travel are meetings and conferences, trade fairs and fairs, as well as incentive travel, all of which are recognized as the most effective means for doing business. Business travel helps entering new markets and exchanging opinions and new ideas between colleagues and customers.
British scientists John Swarbrooke and Susan Horner illustrated the main stages of business travel emerging in the history. The reason for the first business trips was the need to trade products of personal production and agriculture by making the deals with the representatives of the neighboring settlements (Horner & Swarbrooke, 2015). Later, such trade practice has grown into an international level. In the Middle Ages, business activity was supported by constantly held fairs (Horner & Swarbrooke, 2015). The Silk Road has also played a significant role in the development of business tourism because due to it, new goods and knowledge began to enter Europe. Silk Road was the initiator of the construction and the development of infrastructure for travelers.
The industrial revolution provoked a new stage in the development of business tourism. The growth in the volume of production of goods, the development of the transport network, and the colonial orientation of the development of the leading countries only contributed to the development of the direction of business travel. In the late 19th and early 20th centuries, the influence of the United States on the development of business tourism was growing when political parties and large organizations began to practice large congresses (Horner & Swarbrooke, 2015). In the cities that hosted these congresses, organizations began to appear — the prototypes of modern congress bureaus. In 1910, the first incentive travel for the procedure of rewarding was held (Horner & Swarbrooke, 2015). The National Cash Register Company of Danton in the United States decided to reward their agents and dealers with a free trip to New York for outstanding work results (Horner & Swarbrooke, 2015). Later, incentive tourism would become an overall practice in the whole world.
The next stage in the development of business tourism was the second half of the 20th century, when demand and supply in the tourism market reached a certain degree of harmony. On the side of demand, the reasons for the stable emerging of the incentive travel are the active development of the economy, the formation of international free trade organizations, and the emergence of new industries (Horner & Swarbrooke, 2015). From the supply side, there are high-speed means of transportation, such as airplane and train, construction of specialized sites for business events, and the emergence of firms that started to organize business trips (Horner & Swarbrooke, 2015). During this period, incentive tourism began to make a new twist in the development, and finally, consolidated its place in the sphere of business tourism, which has significant impact on the development of the growing economy of the world.
The Role of Incentive Tourism in the International Economic Development
In the conditions of transition of the economy to modern innovative management principles in the tourism industry, qualitative restructuring and diversification of business is taking place. The spheres of tourism services have expanded, a trend has emerged in synergetic functions, influencing the objects and subjects of tourism and the representatives of other business structures, so currently, the task is to expand and strengthen the national market tourist services. In this regard, the development of business tourism as a socio-economic tool for innovative development of the economy is becoming especially topical. The influence of business tourism and incentive travel on the economy of cities, regions, and countries is manifested through a significant increase in the national income provided by the holding of MEEC-events.
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Incentive travel started to attract attention in the independent sphere of business tourism relatively recently, but it has already managed to prove in practice that this incentive measure is much more effective than, for example, cash bonuses. Money for excellent work is taken for granted, material compensation is not enough to stimulate professionals to new achievements (Fenich, 2014). Nevertheless, a well-organized fascinating journey not only gives an unforgettable impression, but also pays off many times in the future, being a powerful and long-term incentive to achieve more. Incentive trips, organized for partners and clients, allow transferring relations with them to a new level, building confidence, and establishing plans for long-term cooperation.
The dynamic of the development of incentive direction shows that more and more managers become aware of the importance of incentive tours for creating and maintaining loyalty to the company. The benefits of incentive travel are most often expressed in significant increases in sales, in the growth of adherence of employees to the rules of their company, in improving the relationships with the personnel, which has such consequence as a significant increase in the company’s revenues (Fenich, 2014). Therefore, with the stable development of companies, the international economy also experiences dynamic growth.
Incentive tourism plays an important role in the development of the national economy — it facilitates its integration into the world’s economic market. Modern business is impossible without active exchange of information, mastering of new technologies, participation in international congresses, seminars, exhibitions, and without the improvement of professional skills at all levels of business education (Fenich, 2014). All this is included in the sphere of business tourism. With the help of this branch of tourism, new innovative ideas are flowing into the economy, new markets are being won, and innovative products are being developed.
A distinctive feature of the incentive programs is that they are developed exclusively — individually for a specific customer. These tours suggest high-quality accommodation and service on route. The share of incentives in the business tourism sector is only 8%, and then there are such countries as Spain and France, where incentive tourists occupy no more than 5-7% (Andersen, Blevins, Galloway, Hayes & Nemerever, 2017). The income is much higher because of the incentive tourists due to the higher price of incentive programs as compared to the price of conventional tours.
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The geography of incentive tourism has not changed since then. The United States is still the main “supplier” of premium tourists. They account for 60% of trips to Europe through the incentives (Andersen et al., 2017). The United States is a primary location for American planners, as for the programs in 2017 year, 82% of planners are choosing US destinations (Andersen et al., 2017). The popularity of incentive tours in the US is also supported by the outstripping growth of US companies’ spending on incentive tourism in comparison with the costs of material incentives for workers (Andersen et al., 2017). The duration of the incentive tours increases. The preferred destinations for incentive tours from the United States are Mexico, Great Britain, Asia, and the Pacific (Andersen et al., 2017). With the expansion of the market of incentive tourism, there are firms specializing in the organization of incentive trips now. They provide qualified assistance in the development of special incentive programs for the workforce.
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Under the agreement with the administration of the company, the tourist company plans and organizes incentive tours. The effectiveness of this system of encouragement, to a degree, depends on the well-chosen travel route. The trip should be attractive for workers and correspond to their age, health status, religious beliefs, and personal interests. Therefore, the travel agency often precedes its work by monitoring potential customers. The most famous tourist firms that organize incentive trips in the United States are the E.F. MacDonald Travel Company, and Maritz Travel Company. Experts point out that incentive tourism is destined for a promising future. In the 21st century, it will become the main form of encouraging workers in the leading sectors of the world economy. Business tourism has characteristics of a systemic positive influence on the social and economic development of the destination, being a source of additional revenues for the economy of the region, which in turn improves the quality of life of the inhabitants of local communities.
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Business tourism has become one of the most significant forces with dynamic and stable development in the economy. To support culture, economics, education, and medicine, it is necessary to involve the destination in participating in international significant events. It imposes a substantial imprint on international relations, strengthens the image of the region or city abroad, and leads to the integration of this aspect and the region into the international space. Based on the foregoing, it can be argued that business tourism has a strong influence on the stable development of the international economy.