Posh trips for jobs well-done are fading away

— -- For nearly 30 years, independent insurance agency owner Bob McAfee of Massillon, Ohio, earned free vacations for himself and his wife by hitting sales goals set by his larger underwriters.

The trips were used to reward his agency's top salesmen, and improve his business. He views the all-expense-paid vacations to Switzerland, Mexico, England and Hawaii as a key motivator and part of compensation.

"It was really great for my salespeople," who earn around $75,000 to $125,000 a year, McAfee says. "They really did try to write the necessary new business to qualify for these trips."

They're reacting to media coverage of extravagant incentive trips and other gatherings, and outrage expressed by members of Congress. Rep. Elijah Cummings, D-Md., has been a vocal critic of bailed-out companies spending money on lavish gatherings at a time of rising joblessness and home foreclosures.

"Some of this stuff is just common sense," he says. "You can't have one hand out begging for money and the next thing you do is go on some junket, when the people whose money you're using are losing their homes."

The problem is that all types of corporate gatherings are being labeled "junkets," and companies are cutting back to avoid getting a bad rap, travel leaders say. The mood is even affecting hotel bookings for the Kentucky Derby, which often attracts corporations and their clients, says Karen Williams of the Louisville Convention and Visitors Bureau.

Incentive trips, meetings and events account for 15% of all travel spending, which creates 2.4 million jobs, $240 billion in spending and $39 billion in tax revenue, according to the U.S. Travel Association. Incentive trips — generally, upscale vacations given to high achievers who met certain goals — alone generate about $13 billion a year, according to the Incentive Research Foundation. Motivational meetings and special events generate $64 billion a year.

Paul Hebert, whose firm i2i helps companies devise motivational strategies, expects incentive travel programs will return around 2011, once scrutiny subsides, but, "The days of having Celine Dion singing at your final night banquet may be over."

The deeper impact will affect the larger category of executive brainstorming meetings and other retreats that are often held at luxury hotels, he says.

Trips have said thanks to many

Since the days of the traveling salesman, companies have rewarded top performers with extras to recognize their hard work and thank spouses who put up with their long hours.

The trips aren't just for six-figure salespeople, says Brenda Anderson, CEO of Site (formerly the Society of Incentive & Travel Executives).