Doing business the world over Places to go, people to meet
Much like reits, MPF and other acronyms that have penetrated our collective consciousness in recent years, MICE is here to stay.
It stands for meetings, incentives, conventions and exhibitions - a growing segment of the global tourism market with a focus on the business traveller.
While Singapore, Hong Kong and Thailand have dominated the MICE segment in Asia over the years, China is gaining on those mature markets as more executives travel north to experience a dynamic economy that the World Bank forecasts will expand 9.6 per cent this year and 8.7 per cent in 2008.
Moreover, MICE travellers are the highest-spending travellers per capita among different market segments, and these elite and moneyed visitors can become excellent ambassadors for spreading the message about the quality of hotels, airlines, restaurants and a destination's other attractions when they return home.
The Pearl River Delta aside, for decades the Peace Hotel, Shanghai's grand old lady on The Bund, was the key nexus of business dealings between the mainland, suppliers and far flung markets. Now the choice of MICE venues in the mainland provides endless variety, such has been the explosive growth in the sector in recent years. The China National Statistic Bureau in 2005 put the average annual expenditure on MICE travel at more than US$4.2billion in the country and growing at a yearly rate of 20 per cent. An American Express survey forecast China would attract more than 137million business travellers, 8.6 per cent of the global business tourism market, by 2020.
China attracted 5.54million foreign business travellers last year, according to Ministry of Public Security statistics. One hotelier said while the numbers might still be a long way off what had been forecast, the growth potential for MICE was clearly there.
Akram Touma, general manager of Le Royal Meridien Shanghai, called MICE 'the future' and something that should be embraced by local governments and tourism boards. He described the MICE sector as the 'bread and butter' of Shanghai hotels and said about 25 per cent of his property's revenue was from business travel.
'It is a lucrative piece of business, because with people who travel on business you tie in an accommodation, meals and meeting package,' Mr Touma said. 'It is not like the leisure traveller who might stay here and not consume anything else. For a conference attendee, you are guaranteed much higher revenue than with the other segments of guests.'
Le Royal Meridien, which opened in December just off Shanghai's famed People's Square, is just one example of how the MICE sector has influenced the construction of new hotels in recent years.
The 770-room property features 'breakout rooms' that are required by corporate functions outside the giant conference halls for follow-up events, brainstorming and displays.
Mr Touma, who was previously general manager at the Westin Macau for five years, said it was no coincidence that the Venetian Macau Resort Hotel complex, due to open in the autumn, would have huge convention and exhibition facilities.
The mega project's owner, US billionaire Sheldon Adelson, initially made his fortune in trade shows and joined the world's rich lists in 1995 when he sold his flagship Comdex (computer dealer exhibition) show and 16 other computer-related shows to Japan's Softbank for US$864million. He then turned Las Vegas on its head in 1999 when he opened the Venetian Resort-Hotel-Casino, again with massive convention facilities, to huge success. With the world's biggest casino and more than 100,000 square metres of exhibition space planned for the Venetian Macau, it is increasingly destinations such as Macau and Shanghai, Beijing and Guangzhou - the big three on the mainland - that are attempting to lure away MICE business that Hong Kong has enjoyed for so long.
Smaller centres are also entering the fray as a host of facilities can be found in Sanya on the tropical island of Hainan, while Chengdu, China's gateway to the west, has built the 5billion yuan New Century International Convention and Exhibition Centre.
Shenzhen boasts its namesake convention and exhibition centre, while secondary cities such as Nanjing, Suzhou, Tianjin and Jilin, among others, are also chasing the MICE yuan. It is the attraction of visiting new destinations which contributes to the 'incentive' portion of MICE. Travellers to historic places in China have the benefit of being able to combine business with sightseeing. If a firm is launching a new product, typically it would reward its best China distributors by flying them to a location to enjoy the perks of staying there while being hosted at a great event.
Lake Malaren Golf Resort, in Shanghai's northern Baoshan District, the country's steelmaking capital, is one such destination. John Tung, assistant operations manager at the facility that houses an opulent 274-room hotel, five large conference halls, an auditorium and a 36-hole golf course, said the resort had hosted large events for companies such as Philips, Samsung and Audi.
'People like to come here because it's quiet and peaceful, yet close enough to the city centre,' said Mr Tung, a Californian. 'We really want this type of business because convention and meeting guests stay two to five days at the hotel, eat three meals a day and then want to play golf as part of their business day. The golf part is fun for some while, for others, there is a lot business being discussed during a round.'
Graeme Barnett, exhibitions director for Reed Exhibitions' CIBTM (China incentive business travel and meetings exhibition), aims to persuade Chinese business travellers to have meetings in foreign destinations.
The three-year-old CIBTM is being staged in Beijing on July 3-5 and is divided into inbound and outbound travel. Mr Barnett said the prospect of more Chinese travelling to the growing number of countries granted approved destination status (ADS) was huge for the meetings sector.
ADS makes its easier for Chinese nationals to get visas and travel abroad to approved destinations. In 2005, 31million mainlanders travelled abroad while the UN World Tourism Organisation forecast 100million by 2020.
'The more countries that get ADS the better it will be for meetings leaving China. It is mainly a leisure [for outbound Chinese] facility right now, but the meetings market is definitely growing,' Mr Barnett said.
Mr Touma said all hotels in the Starwood chain, of which Le Royal Meridien Shanghai is a part, now had a service to arrange an exhibition or a convention with a call to one central person. Previously, a meeting planner had to deal with many people across accommodation, food and beverage departments, and even use outside contractors to arrange events.
'We understand what a meeting planner is going through in arranging events. It is a huge task, very stressful and a lot of responsibility,' Mr Touma said.