Tiger Ready to Leap Again
Challenging times are revealing opportunities for Asian MICE businesses to shine.
By Kelvin King
MICE business is subdued, with real difficulties in some areas, yet there remains a strong feeling of cautious optimism. This is based partly on a willingness to support customers by adding value, introducing innovative marketing and operational strategies and, within reason, adjusting costs to meet changed circumstances.
There is also a widespread understanding that internal structures need to be improved, efficiencies identified and both services and resources (especially human resources) enhanced.
Best practice has become essential, rather than a catchphrase.
Asia, the region of tiger economies, has dealt with a lot of problems in the past 10 to 15 years. A sharp economic downturn is nothing new and avian flu is still vivid in collective memories.
The tiger is somnolent, perhaps, but still on the prowl. Gathering strength despite the jungle’s dark shadows and lingering dangers, he is ready to leap again.
Impact on MICE
Opinions and first-hand experiences are varied on the extent to which the current economic climate has affected MICE operations throughout Asia.
“There is no big impact on incentive events,” said Jerry Liao, director of the Taiwan MICE Project Office. “Associations are hosting meetings according to schedule. However, the number of participants has decreased.”
Liao concedes that international corporate meetings have been downsized and small corporate meetings may be cancelled or replaced by online gatherings.
Still, many MICE operations have been cancelled or postponed, some delayed for more than six months.
The Suntec Singapore International Convention & Exhibition Centre has received some corporate meeting postponements, according to Anjna Nihalani, Suntec director marketing and communications.
“We are seeing some of our corporate clients take a prudent approach to their short-term bookings,” Nihalani said. “They are more thoughtful and cautious in their decision-making, with an increasing emphasis on value for money product offerings, flexibility, creativity and personalized services.”
Despite Vietnam’s inbound tourism numbers declining by some 30 percent, MICE traffic is increasing constantly, Hanoi-based Luxury Travel Co. sales and marketing executive Nguyen Dinh Lap says.
“Upscale organizations, groups of businessmen and luxury travelers are not stopping their MICE activities,” Nguyen said. “In particular, we have seen our sales volume in incentive service increase more than any others.”
The Seoul tourism and convention business has weathered the economic storm reasonably well, reports Maureen O’Crowley, Seoul Tourism Organization’s senior director, international marketing and conventions.
“While some individual exhibitors have either pulled out or downsized their participation level, there has been no outright cancellation of events,” O’Crowley said. “In fact, there has been increased interest in convening conferences to discuss the reasons for the economic downturn and ones on how to improve future business growth.”
The Seoul Convention Bureau, a division of the Seoul Tourism Organization, bid successfully between January and May this year for 10 key events.
What Works, What Doesn’t
Alicia Yao Hong, deputy general manager of the meeting and incentive division of China International Travel Service’s (CITS) creative destination management department and vice president of the SITE China chapter, agrees that the MICE industry in China has been hard-hit.
“Many incentive programs have been cancelled,” she said. “Some companies may still go on with their planned incentive programs but keep to a limited budget or low profile.”
There are, anyway, fewer pure incentive programs than in the past, she points out, with many companies keeping the same budget for marketing and sales but cutting funds for internal events.
The financial crisis has not, however, negatively affected international association meetings the same way, as such events are viewed as even more important now to get members together and help find solutions for a successful future in the industry.
“The need for meetings has become more crucial in the current economic environment—in times of crisis, people want to meet and connect with their colleagues even more,” said Peter Brokenshire, general manager of the Kuala Lumpur Convention Centre (KLCC).
“[KLCC is] experiencing a greater volume of regional business and a shorter lead time for bookings in the conventions segment,” he said.
In the first four months of 2009, the center successfully clinched 17 conferences.
Jimé Essink, president and chief executive of trade show organizer UBM Asia, says that the group’s major events in the first three months of the year weathered the economic storm very well, with good attendance and rebookings.
“China is expected to play a crucial role in the economic recovery because of the size of the domestic market and also the detailed recovery measures being implemented by the government.”
And the economic crisis has impacted companies deeper than their surface business. For instance, Mirtha Sari Nugroho of the Jakarta Convention Center says their budget has been negatively affected.
“When we established the budget for 2009, we predicted the number of events would decrease and revenue would be down by approximately 15 percent, compared to 2008.”
Event size and expenditure is also down.
Doing Things Differently?
In the current climate, most MICE operators throughout Asia—from PCOs and incentive houses to DMCs and facilities—are doing things differently to drive new business and deliver on services.
Suntec Singapore is working to add value wherever possible.
“Both client and venue will need to be creative with fewer resources,” Nihalani said. “And we pride ourselves on being flexible, creative and listening to all of our clients, internal and external. We continue to deliver a value-added product and service, while recognizing possible financial constraints that our clients might be facing.”
Added value has also cropped up as one of Essink’s tactics, with a significant investment in services such as advertising and matchmaking programs. Additionally, the company is communicating more frequently with exhibitors to understand their needs, boosting its sales network, encouraging exhibitors to become more active in pre-show promotion and recently introduced VIP buyer initiatives.
Brokenshire says the KLCC is highlighting added value by focusing on the client experience, with product offerings that incorporate customized value propositions tailored to clients’ needs.
An example of this is a promotional campaign which offers clients a choice of incentives, including a loyalty and rewards program and free or discounted event amenities.
Furthermore, companies are attempting to attract business with discount rates, free set-up and breakdown and charging only for exhibition space actually used. This represents some of the more standard promotions on offer.
The Seoul Convention Bureau’s O’Crowley reports seeing a paradigm shift this year with the need to increase promotional efforts to provide services and support for all manner of meeting and event.
In response to this shift, companies are also expanding their sales efforts to garner more business and valuable attention in the industry.
The Bureau of Foreign Trade launched the Taiwan MICE Advancement Program in January to boost industry development. According to Jerry Liao, the bureau has invested more than US$20 million to upgrade Taiwan’s global competitiveness.
Likewise, in November, the Hong Kong Tourism Board saw structured growth with the launch of the Meetings Exhibition Hong Kong division, a significant expansion in MICE teams in the Hong Kong office and in a number of important and emerging MICE markers.
With much of the region ramping up sales efforts and visibility while offering standard client incentives, some Asian industry professionals are expanding the scope of services and products they provide.
Sarawak is focusing on the increasingly popular corporate social responsibility field, leveraging its unique CSR content to help companies justify planned expenditures on travel and meetings, according to Jill Henry of the Sarawak Convention Bureau in Malaysia. She suggests transforming a gala night into a charity-linked event to help counter negative perspectives on event spending.
Others, such as Agility Fairs & Events, which has pan-Asian interests, are taking a multi-faceted approach to staying fiscally sound.
“On the one hand, we’re streamlining areas of excess,” said Nat Wong, Agility president. “On the other hand, we’ve expanded into new sectors like events and fine arts logistics.”
Identify and Overcome
Outside the economic climate, Asia’s MICE industry professionals have a wide-ranging perception of what may be the biggest challenges in the next 12 months.
“Global trade and businesses are currently evolving and many centers of gravity are going to shift,” Wong said.
For example, he cites the cloning of trade shows and events by some event owners who want to create a bigger footprint for their intellectual properties.
“This brings about dilution in some areas and new competition in others,” Wong said.
Throughout Asia, health concerns immediately follow the economy as the greatest modern threats.
Seoul’s O’Crowley says the swine flu is causing businesses and governments to consider the best ways to handle widespread illnesses and how to be better prepared for and manage future health issues as they relate to travel.
Of more direct concern, as the economy stabilizes and rebounds, businesses will need to be aware of and recognize the changes (if any) to their operations and the way in which organizations utilize meetings and incentives.
Sweat equity or human capital has been clearly recognized as a powerful asset for recovery in Asia—a driver to push the market past the current challenges.
“[That is] one of the key opportunities to develop, we believe,” Nihalani said. “We are in the people business. As such, we believe that people are our greatest assets and we need to continuously invest in our employees via training and other methods to continually improve our service standards and add value to our customers.”
Other companies are specifically taking advantage of the slowdown to focus on internal training within the company, suppliers and business partners.
Helping meeting organizers identify opportunities for new events in areas where governments are spending to support the economy also has a lot of potential, Jimé Essink says. So does looking for a good partner for strategic alliances, especially in the emerging powerhouses of China and India.
“The most important thing is to be prepared for the up-turn,” Essink said.
Alicia Yao Hong says her organization believes meeting professionals should work more closely than ever before with industry associations, to gain support of governments, tourism bureaus and CVBs.
“We need to unite and speak as one voice, to interact with other industry associations, because our business supports other industries in their incentive and corporate events,” Hong said.
Strengthening business right now will go far to prepare companies as coming out of the recovery there will be an even greater focus on the educational and ROI value of business tourism. One+
KELVIN KING is a business and MICE journalist based in Auckland, New Zealand.
New Life for the AACVB
The Asian Association of Convention and Visitor Bureaus, a quiet performer in recent years, has been revitalized.
Its fresh strategy includes an emphasis on training, bids for regional conferences (especially those that can be rotated among member countries), a joint databank and the sharing of best practice strategies. Joint branding, advertising and marketing is also planned.
“We aim to enhance standards in the convention industry by developing and promoting sound professional practices,” said Suprabha Moleeratanond, the AACVB’s chairperson, who is from the Thailand Convention and Exhibition Bureau.
A successful MICE sector doesn’t just happen, she points out.
“Sought-after MICE destinations work hard to offer value, service, accessibility, cultural variety, safety and a highly rewarding experience for all participants.”
Shining Stars: What’s New in Asia’s Growing MICE Industry
• Starwood Hotels & Resorts is constructing no fewer than 60 hotels in China, scheduled to open within the next five years, a trend seen across the spectrum with international hotel chains operating there.
• The Sheraton Beijing Dongcheng Hotel, located on the city’s north third ring road, close to the 2008 Olympic Stadium and Tiananmen Square, opens in December 2010 with 470 guest rooms and more than 35,000 square feet of event space.
• Last year, 33 world-class Beijing museums began offering free admission, including the Great Wall Museum of China and the Cao Xueqin Memorial, located within the Beijing Botanical Gardens.
• The China Incentive, Business Travel & Meetings Exhibition, the leading international MICE industry event in China, is taking place Sept. 8-10 at the China National Convention Centre in Beijing, a venue built specifically for the 2008 Summer Olympic Games.
• Earlier this year, the Hong Kong Convention and Exhibition Centre completed a US$180 million expansion, bringing the center’s available event space to nearly 1 million square feet.
• The St. Regis brand is seeing impressive growth in the region. The St. Regis Jakarta (Indonesia) opens in 2011 with more than 55,000 square feet of meeting space. And the St. Regis Kuala Lumpur will come online in the city’s Sentral Precinct, minutes from the National Museum, in 2014 with 25,000 square feet of meeting space.
• The Grand Hyatt Seoul recently completed a US$50 million renovation on its guest rooms, The Terrace café and J.J. Mahoney’s, a multifaceted entertainment venue. Marc Handl, the hotel’s executive assistant manager of marketing, is confident that such an impressive investment in the midst of the global economic downturn will result in a competitive advantage, according to the JoongAng Daily. He says with locals traveling shorter distances for business and vacation, the hotel has realized a 10 percent growth in occupancy over last year.
• The Republic of Korea’s Ministry of Culture, Sports and Tourism, in conjunction with the Korea Tourism Organization, is establishing an extensive walking tour in the Demilitarized Zone. This is part of a larger plan to develop the area’s tourism offerings and includes a proposed name change to the more pleasant-sounding “Peace and Life Zone.” Tours will include museum visits, an underground exploration of the invasion tunnels dug by North Korea and an ecological tour of the areas mountain’s and valleys. A pilot tour took place last month—there’s no word yet on when all components will be open to the public.
• The Singapore Tourism Board revealed designs for its planned cruise terminal in March. The terminal, capable of accommodating the world’s largest ships, will be a significant step in developing Singapore as a major cruise hub and will be completed by the end of 2011.