China MICE sector grows, but room for improvement
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China’s meetings and events sector is expanding, but the country needs to improve its facilities in future if it is to become a MICE powerhouse, according to a recent survey by Reed Travel Exhibitions.
In its fifth ‘Industry Research for China & Asia Meetings Industry’ report, which surveyed more than 400 MICE buyers and suppliers in June and July 2011, Reed Travel Exhibitions found that inbound international events to China have grown in 2011, indicating a rise in interest in the region. Outbound events have also increased in number, with the most popular destinations for outbound business including Taiwan, Macau, South Korea, Singapore, Thailand and Malaysia. Beyond Asia, North America was the most popular followed by Europe, Middle East and Africa.
When asked to forecast destinations chosen for events over the next year, Beijing, Shanghai and Hong Kong continue to dominate, although in China, Shenzhen, Chengdu and Qingdao are all included for the first time.
Buyers said that the most important influencing factors when placing an event were cost followed by location, quality of accommodation, quality of service and the size of the venue plus time of year.
Those rating satisfaction levels for their events in China however, showed that there is still room for improvement in facilities. Forty-four percent rated destinations used as very good or excellent – a reduction from 60% last year, citing the need for more training and professional skills as an area to be improved.
Fifty percent of respondents expect an increase in event budgets in future and 34% think they will stay the same. Factors influencing events in future show cost pressures and trends in the meetings market globally having an impact on China in future, as buyers try to organise a higher number of events on lower budgets – a trend that is being seen worldwide.
The economic climate and pressure to reduce costs remain the factors most likely to influence events in the next 12 months. Passport and visa issues have become more important as the volume of outbound business has increased. CSR and environmental issues are now influential for over 80% of respondents, a significant shift over previous years.
When assessing the outlook for 2012, the key issues that are predicted to have the most impact on increasing conference and event business in China and Asia are cost, hotels – lack of supply or capacity -, training, understanding of international business needs, infrastructure, airlines and sufficient routes, service and meeting the required standards, supply and capacity for travel, accommodation and venues.
Suppliers cited conferences and meetings as the event types they are most involved with (64%), while incentives were not far behind at 53%. Travel agencies remain in first place as third party MICE organisers, although the growth of the professional conference organiser (PCO) has risen considerably from sixth last year to second in 2011. While pharmaceutical and medical clients dominated the sector once again, the financial services/banking sector rose from sixth position in last year’s research to second place.
Suppliers matched the buyer’s responses in predicting the outbound areas of most interest to their Chinese clients, with Asia still dominating, Europe in second place and Australasia third. Similarly, the factors influencing suppliers’ choice of where to hold events reflects closely the buyers concerns, including cost, location, capacity and quality of facilities plus service levels.
Future business growth is predicted to come from China with 56% mentioning Beijing, 45% Shanghai, 34% Hong Kong and 27% Taiwan, but additional areas of interest are shown as North and West China, the Bohai-rim region, the Pearl River Delta and the Yangtze River Delta. Seventy percent of supplier respondents are targeting corporate organisations for business in future, 34% third party organisers/agencies and 29% not-for-profit organisations and associations.
Similarly for buyers, the most influencing trends for events in the next 12 months will be the economic situation, although environmental/green issues have increased in importance with 58% of suppliers citing CSR and environmental issues as extremely or somewhat influential on their events.
Critically the research showed caution for the year ahead compared to the 2010 survey, reflective of the economic situation worldwide. Fifty-two percent still predict an increase in the volume of events, yet only 27% suggest an increase in budgets for events. Thirty-four percent will be increasing their marketing and promotional budgets, and 32% show that they will increase their selection of long-haul destinations.
The key factors influencing MICE growth in China and Asia are a better understanding of the needs of international business visitors, training and professional qualifications for employees, service, infrastructure development, costs and budgets, improving visa procedures and formalities, safety and security.
“This year’s CIBTM event is clearly following the growth trends for the MICE sector in the region with over 300 exhibitors a 21% growth in event space over 2010 and more than 300 hosted buyers (25% increase over 2010). Our research also highlights the need for professional training and education to keep up with the pace of growth and CIBTM is now considered to be the annual event that focuses on development of this resource for all those involved in the industry.
“Professional training and accreditation has become an important focus in the Chinese meetings industry – this is shown in the thirst for knowledge, learning, accreditation such as CMP and MPI Global training, both of which are establishing themselves at CIBTM and in Beijing,” said Jeffrey Xu, CIBTM Project Manager.
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