Twice is nice: Mega-events bring billions to the MICE business

The scale of just two meetings, incentives, conferences and exhibitions (MICE) events in Thailand in 2012 is daunting. To fly in all the delegates for Rotary International’s gathering in Bangkok and Amway China’s convention in Phuket would have taken more than two-thirds of every Airbus A380 airplane in service in the world, each configured to carry the maximum 850 passengers.

Approximately 35,000 Rotarians from more than 160 countries attended the 2012 Rotary International Convention in May at the Impact Exhibition and Convention Centre located in Muang Thong Thani, the country’s biggest convention site. The month-long Amway event, from mid-April to mid-May, attracted 16,000 people and was held in Phuket.

ROTARY: Pornthip Hirunkate, the vice-president of marketing at the Tourism Council of Thailand, told OBG, “Planning and preparing for a bid for the Rotary International event started around eight years ago.” She said the government had donated BT100m ($3.19m) towards paying for some for the functions. Bangkok beat Sydney and Kuala Lumpur, the two other cities under consideration to host the event.

Pensuda Priaram, the chairman of the Thailand Convention and Exhibition Bureau (TCEB), said that the bureau had been working closely with Rotary clubs in Thailand since 2004 in order to promote the country’s bid. The direct income for the convention centre as well as the hotels of an event of this size was only one aspect of the financial benefit. According to Pensuda, the majority of the delegates were expected to spend around two to three times as much as an average tourist.

ON THE UP: Free-spending habits was also a characterisation of the Amway visitors. According to TCEB’s acting president, Thongchai Sridama, the number of Chinese MICE tourists to Thailand had been growing at an average of 15-20% a year to the extent that the total was second only to India. Easing of restrictions on travelling outside China meant there has been a “quantum leap” in the numbers, accompanied by a taste for luxury. “Their spending is up to 30% higher than other MICE visitors,” he added. Initial estimates were that the delegates would generate over BT2.5bn ($79.75m) in revenue.

According to Martin Liu, the vice-president of Amway Greater China Region, the firm itself had allocated a budget of over BT1bn ($31.9m) for the event. Yet further evidence of the economic importance of Chinese arrivals came from Paul Kanjanapas, the managing director of Impact Exhibition Management. “The Chinese have been holding more and more exhibitions in Thailand and they don’t spend any less money than Europeans or Americans,” he said. To cater for the rise in interest, Impact has trebled its number of Mandarin speaking staff to six.

The overall number of Chinese tourists is expected to hit 2m in 2012, which has helped rescue what otherwise could have been a gloomy year for the country. Economic woes in Europe and the US, combined with severe flood damage in parts of Bangkok, and central and northern Thailand in the final quarter of 2011, threatened to wreak havoc with the tourism industry, including MICE bookings. However, visitors from East Asia continued to pour in.

The floods delayed the implementation of a three-year BT3bn ($95.7m) expansion project at the Impact Centre for a few months, although business bounced back quickly. At the time the floods struck, Impact was organising two or three trade shows a year. Now this number has risen to eight, helped not least by the opening of an on-site 381-room hotel. “The hotel was an essential addition because not having one on site was one of the concerns being expressed by event organisers,” Paul told OBG.

SLIPPAGE: However, the overall picture for 2012 is that the MICE business will not equal the figures that were registered the previous year. According to a survey of the 2011 market carried out by TCEB, there were 840,054 MICE travellers at 6803 events, which brought in a total revenue of BT70.6bn ($2.25bn). Revised post-flood and EU austerity-era estimates set the 2012 total at around 750,000, with revenues of approximately BT60bn ($1.91bn), although not all voices are pessimistic, especially when it comes to domestic events. “If the fourth quarter of 2012 runs well, the target for both event attendance and revenue will be higher than 2011,” said Chiruit Isarangkun Na Ayutthaya, the director of TCEB MICE. The bureau has won bids to host eight events between 2012 and 2014, and total revenues are estimated to be in excess of BT900m ($28.71m). These events cover medicine, pharmaceuticals, veterinary science, electrical and electronics goods, with the number of participants ranging from 200 to 3000. Bids are currently in process for a further 20 exhibitions or conventions.

WORLD EXPO 2020: The prize catch will be if Thailand succeeds in landing World Expo 2020, a project Akapol Sorasuchart had been working on before standing down as president of TCEB and that was transferred to the Ministry of Foreign Affairs to lead at the start of 2012. Although Akapol did not give specific reasons for his resignation, local press reports said he quit due to political interference. The candidate sites are Ayutthaya in Thailand, Izmir in Turkey, Yekaterinburg in Russia, Sao Pãolo in Brazil and Dubai in the United Arab Emirates. The winner for the seven-month exhibition will be announced in June 2013. Visitor expectations are put around 30m-35m.

In an interview with OBG before his resignation, Akapol predicted that MICE visitor numbers would rise 75% by 2016. “Up to five years ago, Thailand was a very prominent contender as a centre of MICE in Asia, especially in South-east Asia, but we have had internal problems since then,” he said. “Still the potential is there.” Since all the venues of international standard in Thailand for conventions and exhibitions are built by the private sector, he said that the way to develop the MICE market was by working with the private sector.

“By bidding for an event like World Expo 2020 you can demonstrate Thailand’s readiness in many ways,” Akapol added. “ASEAN+3, which includes ASEAN, Korea, Japan and China, is nearly a quarter of the world’s GDP. If you talk about ASEAN+6, adding India, Australia and New Zealand, that is half the world population in this region.” His idea was for the TCEB to drive Thailand as the main regional MICE centre.

Given the experience of Chinese visitors, the focus would be to aim for “luxury MICE”. Akapol said, “If you count heads, you get heads. If you count value and money, then we will get the money – you have to get the heads with money.”

Expenditure for meetings and incentives currently averages some BT60,000 ($1914) per head per stay. For conventions this figure increases to BT80, 000-90,000 ($2552-2871) and still higher for exhibitions, when it goes up to BT120,000 ($3828). The segment’s overall goal should be to see the average per head per stay for the MICE industry rise to BT90, 000-100,000 ($2871-3190), Akapol said.

ASEAN: Akapol’s acting successor at the TCEB, Thongchai Sridama, echoes these sentiments. “Visitors from India, China, Singapore, Japan and Malaysia are the top five among Asian MICE visitors,” he said. In 2011 Asian MICE tourists numbered 396,235 – 47% of the total – contributing BT28.5bn ($909.15m) to the economy with an average spend of BT93,600 ($2985.84) per event per head.

The tourism sector could also benefit from the formation of the ASEAN Economic Community in 2015 as well as the opening-up of Myanmar next door. Since Myanmar currently has neither the facilities nor the experience of organising large MICE events, Thailand could be an obvious choice to fill the gap.