Site selection has always involved a balancing act — weighing attendee experience against budget realities, venue quality against airlift, and destination aspiration against logistics. Today, one variable has muscled its way to the top of that equation: fuel prices.

With the war in Iran and the resulting fallout causing jet fuel and gasoline costs to surge, the ripple effects are being felt from air ticket pricing to ground transportation, fundamentally changing how planners score and shortlist destinations.

The Airfare Effect

Airfare is typically the single largest line item in a corporate group travel program — and it is also the most directly exposed to fuel price volatility. When jet fuel costs climb, airlines pass those increases downstream through higher fares and reduced route flexibility, especially on international corridors.

The impact is not uniform, however. Long-haul routes absorb the greatest pressure, since fuel constitutes a higher proportion of operating costs on extended flights. Industry observers note that transatlantic travel has been hit particularly hard, with reports of sharp declines in passenger volumes on certain routes between the Americas, Europe and North Africa as fares rise and travelers — and planners — recalibrate.

The effects are already showing up in program budgets. The 2025 Incentive Travel Index found that air, hotel and food-and-beverage costs now account for nearly half of total incentive program budgets, with average per-person spend reaching $5,100 globally and hitting $6,000 in North America. Planners report that while budgets are growing, they are barely keeping pace with actual cost inflation. This is a squeeze that forces hard trade-offs at the destination-selection stage.

Closer, Simpler, Smarter

The most direct response to fuel-driven cost pressure is a pivot toward shorter-haul destinations. Planners are tilting toward regional options that offer more predictable, lower-cost airlift — or that attendees can reach by car, eliminating airfare entirely. A city with excellent meeting infrastructure may now lose a bid to a less glamorous, easier-to-reach alternative that protects both attendance numbers and total program spend.

For incentive programs in particular, sourcing is gravitating toward value-driven markets such as Mexico, the Caribbean and select U.S. resort destinations. These locations can more reliably control both airfare exposure and on-the-ground costs. The 2025 Incentive Travel Index confirms the trend: North American buyers report increasing their use of Mexico and the Caribbean, while interest in Hawaii and some domestic U.S. tier-one destinations has declined. Meanwhile, certain European markets — particularly Portugal and Adriatic destinations like Montenegro, Croatia and Slovenia — are gaining traction as value alternatives to pricier Western European capitals.

Airlift as a Non-Negotiable

Direct air access has always mattered to planners, but it has become a sharper filter in the current environment. According to the 2025 Incentive Travel Index, poor air access ranked as the second-biggest disqualifier for a destination — cited by 40% of respondents — trailing only personal safety concerns. In a world where fuel costs make connections and indirect routings significantly more expensive, the availability of nonstop or direct service from a group’s key feeder cities may become a factor that can make or break a destination’s viability for some groups.

Ground transportation is a secondary but meaningful factor. Gas prices vary significantly by region — proximity to oil production and refinery infrastructure keeps costs lower in areas like the Gulf Coast, while the West Coast and Northeast pay distribution premiums. For large events with significant shuttling needs, or incentive programs relying on scenic drives and excursions, the destination’s ground logistics profile is increasingly part of the cost analysis.

Tactical Responses: Timing and Tier

Beyond destination choice itself, planners are adapting their procurement practices. Booking earlier — sometimes 13 to 24 months out for incentive programs — allows groups to lock in air and hotel rates before fuel surcharges work their way into forward pricing. Shoulder-period scheduling is gaining appeal, both for rate advantages and for tighter arrival/departure windows that reduce the number of high-cost flight segments required.

A growing share of planners — nearly half, according to a 2025 Global DMC Partners survey — are also shifting events to second- or third-tier destinations as a cost-management strategy. These markets can offer competitive hotel pricing, strong meeting infrastructure, and often better airlift value than saturated tier-one cities, making them natural beneficiaries of fuel-driven budget pressure.

A Changed Scoring Formula

While fuel prices don’t necessarily eliminate certain destination choices, they do change the weight assigned to each criterion. Sites that once won bids on experience, cachet or hotel quality alone must now win on total trip economics: What is the all-in cost to get attendees there? How many direct flights serve the group’s origin cities? How exposed is the program to fare volatility between booking and travel date?

In the current fuel environment, planners need to begin their site-selection process with an eye to total costs, including how efficiently and affordably their groups can get there. This means that yes, destinations still have to market based on the great experiences they offer, but CVBs and DMOs that want to compete in this environment also need to make the transportation and access case alongside the lifestyle case.