• ARTICLES

    Outlook 2017: Destination Outlook

    Cover Story | February/March 2017

    What will the new year bring for Asia-Pacific’s business event players? How will Asian markets approach business event plans? What key trends will impact business travel and events? TTGmice reporters get you
    the answers

    Outlook-Global

    Destination-outlook
    Most destinations in Asia-Pacific are upbeat about inbound business events this year, although different challenges are keeping players on their toes

    CHINA

    China’s inbound business events players are upbeat about 2017, saying China’s One Belt, One Road initiative is spurring new business ventures and driving demand.

    Other factors such as China’s easing of visa requirements, launch of new international flights and increased air capacity to existing key routes are other reasons for the bullish outlook.

    Joy Liao, sales director, Inbound and MICE Center, Century Holiday International Travel Group in China, said: “Although competition is intensifying, we are expecting (more) event attendees and to set a new record in 2017.”

    Liao named India as a source market that will shine in 2017 and expects stronger demand for technical visits. Domestic business will remain strong too, with most demand coming out of Shanghai.

    Julien Delerue, founder and general manager of online procurement platform 1000meetings, is optimistic too, saying 2017 is “a year of recovery, having faced weakness from the US and Europe – which either cancelled or postponed events in China – in 2016”.

    He believes that China’s 2017 business events performance will depend on 2016 financial results. “The instability we are seeing is making it harder to read the market, which was not the case a
    few years ago. Companies are more cautious than ever and are under increasing pressure to be more compliant in procuring goods and services. I see customers demanding more transparency and the rise in the use of technology to control spend and manage events.”

    Destination Asia (China), Kaci McAllister, deputy general manager, who projected two good years in 2017 and 2018, told TTGmice that her company has been seeing strong leads from Australia, the UK and the US, and that “incentive business from the US seems to be coming back”.

    However, McAllister cautioned that “if global economic health weakens (further), incentives and large corporate meetings (will) be cut”.

    She noted: “Longhaul corporate and incentive travel from English-speaking markets tend to decline sharply in years when the global economy is not doing well.”

    Less enthused about the new year is Nicole Wang, director of resource procurement, CTS MICE Service, who said the continued negative reports on China’s air pollution were denting business. She forecasted a flat year forward.

    Singapore-based Ik Chin Travel Service, which organises incentives for Singapore and Indonesian groups using Singapore as a hub, saw business to Xiamen, Zhuhai and Zhongshan, slide about 20 per cent in 2016. Nancy Tan, managing director of the agency, said: “The number of incentives to China are being cut or postponed and it is hard to figure out how 2017 will be. We will have to wait and see what airline support we will be getting.” – Caroline Boey

    Mongkok-at-nightHONG KONG

    Hong Kong’s established reputation as an efficient destination for hosting world-class conventions and exhibitions has inspired business confidence among the city’s business events players.

    Hong Kong Tourism Board (HKTB), MICE and cruise, general manager, Kenneth Wong, said: “Hong Kong has been (attracting) world-class conventions and exhibitions as well as professionals from various industries for knowledge exchange, especially in the medical, financial and technology sectors. Riding on the strong momentum, a series of high-profile medical conventions will be staged in the city, reflecting Hong Kong’s role as the ideal hub for hosting similar important events in the region.”

    Wong has predicted “another exciting year for Hong Kong“ in 2017, and revealed HKTB’s plans to upgrade its Hong Kong Rewards! programme to “help delegates get the most out of their visit and attract more (business events) to Hong Kong”.

    He added: “We also look forward to the opening of various new venues and products that cater for different event purposes, such as Kerry Hotel in 1Q2017.”

    Grand Hyatt Hong Kong, director of sales & marketing, Cecilia Lo, expects 2017 to be a year of stability with some growth opportunity.

    “We’ve noticed inbound demand (stabilising) over the last 12 months, with fewer peaks which meant minor downward rate adjustments. This has made the city more affordable for travellers,” she said.

    Hong Kong may also see a rise in association meetings this year, according to International Conference Consultants, director, Katerina Tam. She said China’s One Belt, One Road initiative as well as the 20th anniversary of Hong Kong’s handover to China as a Special Administrative Region could inspire more association meetings to be held in the city.

    The trade believes meetings and conventions will remain the stronger sectors in the business events industry, given the city’s strategic location, sophisticated infrastructure and experienced workforce. Leveraging these strengths, Meetings and Exhibitions Hong Kong, part of HKTB, has been reaching out to meeting and convention planners in new and longhaul markets. Its efforts have drawn strong enquiries, but space availability in Hong Kong remains a challenge.

    Monica Lee-Müller, managing director of Hong Kong Convention and Exhibition Centre (Management), told TTGmice 2017 will be another great year for the venue, as the majority of its exhibitions are repeats. New shows will debut at the Centre too, such as Cloud Expo Asia on May 24 and 25.

    What Hong Kong needs to watch for are attrition of event attendance as corporate travel budgets tighten in reaction to the global economic situation and other macro factors, Lee-Müller warned. – Prudence Lui

    Hong-Kong-success

    INDIA

    Indian PCOs, hoteliers and convention centres expect 2017 to be an eventful year for inbound business, with the Indian economy looking up and interest from overseas companies to do business in the country growing.

    Some industry stakeholders expect that meetings and conferences will lead the growth for inbound business events.

    K B Kachru, chairman emeritus and principal advisor for Carlson Rezidor Hotel Group, South Asia, said: “The meeting sector will continue to grow for India. We will also see more international congresses moving into India. The country continues to develop and grow its second- and third-tier cities – a good complement as meeting planners are exploring new destinations to host their events to deliver fresh experiences.”

    For Novotel Hyderabad Convention Centre & Hyderabad International Convention Centre, events in the IT, medical sciences, aerosciences, defence, agriculture, financial and engineering industries are expected to thrive.

    The venue’s director of sales and marketing, Gorav Arora, added that North America would be his strongest source market, with 20% to 25% of business hailing from the region.

    Industry veterans believe that support from the government and high-level industry associations has helped to boost India’s appeal in the business events scene.

    “The government sector is putting a lot of business events into the country and this will continue to surge owing to the Made-in-India initiatives,” opined Amit Saroj, director, Attitude Events.

    “Efforts of industry bodies like SITE India and India Convention Promotion Bureau (ICPB) are paying off too,” said Rajeev Kohli, joint managing director of Creative Travel, whose company is seeing good demand for incentives and meetings from markets including the US and Western Europe. – Rohit Kaul

    India-Successful

    INDONESIA

    An air of optimism is surrounding Indonesian business event players this year, even as the global economic situation remains uncertain and government meetings are few.

    Susilowani Daud, PACTO Convex president director, told TTGmice that bookings and leads gained by her company are painting a positive picture of the future. Among PACTO Convex’s forward bookings is a harbour-related conference which will be attended by some 1,500 national and international delegates as well as a number of medical and government events with 500 to 1,000 delegates expected.

    However, she is “cautiously optimistic” and added that “as long as there is no travel warning (against Indonesia), everything will be all right”.

    Ketut Jaman, president director of Melali MICE Bali, reports a positive outlook too. Leads from incentives are coming in for Melali MICE Bali, and he expects Bali to welcome even more international incentive gatherings this year. But with the bulk of the national budget being channelled into infrastructure development across the country, meetings spend in the government sector will likely shrink along with the number of meetings held locally, opined Jaman.

    He has also predicted that association meetings will be affected by weaker participation, as delegates who often have to pay for their own attendance lose spending power in the face of global economic woes. On the bright side, meeting producers in Europe and the US will turn their delegate boosting efforts to the healthier Asia-Pacific region, resulting in a spike in seminars and product launches in countries here, including Indonesia.

    For Yasinta Hartawan, general manager operations at Bali Nusa Dua Convention Centre, corporate meetings will be dominated by domestic clients, and business will rise 10 per cent on 2016.

    Wisnu Budi Sulaeman, CEO, Puntama Convex, urged his peers in Indonesia to take advantage of the hundreds of trade associations in the country that have international affiliations, to court more association meetings. – Mimi Hudoyo

    JAPAN

    Picture by Ikunl/shutterstock

    Picture by Ikunl/shutterstock

    Business event arrivals in Japan has grown alongside leisure arrivals in 2016, prompting the country’s inbound business event players to predict yet another successful year in 2017.

    According to Etsuko Kawasaki, executive director of the Japan Convention Bureau (JCB), Japan welcomed more than 20 million leisure visitors before the end of October 2016. “It is the biggest figure ever, and the business event industry is following that trend,” she said.

    A number of major events taking place in Japan will likely give business event
    arrivals a boost, she added, such as the World Congress of Neurology, scheduled to take place over six days in September in Kyoto and with 7,000 delegates expected.

    “We have not set a 2017 target for business event visitors,” Kawasaki said. “Our aim is to remain in first place in the Asia-Pacific region and to win more major events. In particular, we want to promote incentive programmes in Japan, especially from other Asian markets.”

    Key markets at present are South Korea and Taiwan, although JCB is aiming to score more groups from China and South-east Asia in the coming year.

    Longhaul markets are more of a challenge, Kawasaki admitted, purely because of the distance involved, but the bureau believes that increasing numbers of holidaymakers will spread the word about Japan as an ideal destination for business events.

    Okinawa is keen to raise its profile on the world stage for business events, according to Sayaka Mori, spokesperson for the Okinawa Convention Centre. “We are very positive about 2017, in part because the prefecture this year surpassed Hawaii in terms of the total number of tourist arrivals. We welcomed over nine million visitors,” she told TTGmice.

    “We also have a strong pipeline of new hotels with event facilities coming up, including in central Naha, the north of the main island and on some of the outlying islands,” she said.

    Hotel operators are also optimistic as Japan heads into 2017, with Masafumi Katou spokesperson for the Grand Prince Hotel Takanawa, saying the strong demand has led to a shortage of large venues for up to 2,000 people in Tokyo. – Julian Ryall

    Japan-Success

    MACAU

    Macau’s business events industry has performed well in 2017, according to Macao Trade and Investment Promotion Institute (IPIM) which is aiming to secure even more ICCA-approved association meetings this year.

    Already in the destination’s bag for 2017 are a number of large-scale, high-profile meetings such as the 13th China Expo Forum for International Co-operation, held for the first time in Macau from January 12 to 14; the International Cartilage Repair Society World Congress in April; and the 39th Asia Pacific Dental Congress in May.

    Sands China, vice president, sales and destination marketing, Ruth Boston, expects a good year ahead, noting that business on the books looks much stronger this year compared to 2016. She said: “Both incentives and meetings are estimated to be strong; all signs are pointing that way so far. Macau is still a preferred destination due to the variety of product offerings.”

    For Sands China, key source markets in North Asia have continued to post growth, while additional growth in the US and Australia are expected.

    Also positive about the new year is Timothy Tan, director of sales for Sheraton Grand Macao Hotel, Cotai Central and The St. Regis Macao, Cotai Central, who is encouraged by a stronger business performance in 2016.

    Tan said: “As long as Asia-Pacific remains stable, inbound business events will continue to grow. IT and direct sales companies will continue to shine in 2017, as they need to hold their customer events every year and require locations like ours that can cater for large numbers of delegates all under one roof. The banking and finance sectors are still soft but the rest of the sectors are doing well.”

    MCI Macau Office, director of business development and events, Olinto Oliveira, believes the market will begin to rebound in 2017 after subpar performances in 2015 and 2016.

    Oliveira identified India as a source market that will deliver strong results for Macau’s business events industry in 2017.

    “While European markets won’t contribute to massive business numbers, they should grow a little as Macau gains global awareness and more clients turn to it as a fresh destination for well-travelled delegates,” he said.

    Oliveira expects Asia-Pacific’s economic health to be on the upswing this year, which will bode well for business events.

    “A healthy economy tends to mean more spending on events, particularly incentives and other major public events where ROI may be more about brand presence or rewarding high performers,” he said. – Prudence Lui

    Macau-Success

    MALAYSIA

    KL-Malaysia

    Picture by ESB Professional/shutterstock

     Despite the uncertainties in global and regional markets, Malaysian business event players are optimistic about their core markets in 2017, based on forward bookings and enquiries received end of 2016.

    They claimed the weakened ringgit, which had depreciated by seven per cent within the span of a month in November 2016 after the US presidential election results were announced, has helped to secure new businesses.

    Arokia Das, senior manager at Luxury Tours Malaysia, told TTGmice in December that confirmed incentive groups from India and Indonesia for 1Q2017 was at least 20 per cent better than the corresponding period in 2016. He said many organisers had locked in the rates early as they thought the ringgit was at its lowest.

    Nanda Kumar, managing director at Hidden Asia Travel & Tours, said there was an 18 per cent rise in confirmed forward bookings from India, Sri Lanka and Indonesia for 1Q2017, and credited the wins to the destination’s affordability. He added: “There are also a lot of sightseeing options that we can recommend to our clients who like to combine Kuala Lumpur with Penang or Langkawi.”

    Scoring well with markets beyond Asia is Saini Vermeulen, executive director, Within Earth Holidays, whose company is making inroads in Eastern Europe with confirmed bookings for 2Q2017. “There is less competition from Malaysian DMCs in this market. The corporate clients we get like culture and adventure, which is why we like to combine Kuala Lumpur with East Malaysia. They usually choose four- or five-star properties and like to combine at least two regional countries,” he explained. – S Puvaneswary

    The Philippines

    Business events in the Philippines are expected to see yet another good year in 2017, buoyed by the guaranteed hosting of the third Madrid Fusion Manila, ASEAN Summit, International Food Exhibition Philippines, UNWTO’s 6th International Conference on Tourism Statistics, and many more.

    All sector of business events – meetings, incentives, conventions and exhibitions – are showing strength, especially regional meetings and incentives which are the ones “that bring the bodies,” said Maricon Ebron, deputy COO for marketing and promotions sector, International Promotions Department of the Tourism Promotions Board.

    Vince S Reyes, managing director, ED IMC Firm Corp., pointed out that most of the inbound business events are from the region.

    While interest in the Philippines as a destination already exists and the number of events is expected to climb on the back of the ASEAN integration, Reyes noted that security and infrastructure concerns will continue to influence clients’ decisions.

    Illustrating the sensitivity of security concerns to business event clients, an event organiser told TTGmice that a French group cancelled its event last August due to the spate of extrajudicial killings that has become a part of Philippine president Rodrigo Duterte’s war against illegal drugs. Another planner said a Canadian group also cancelled its event after the Davao bombings last September.

    To address the country’s insufficient infrastructure, the government beginning this year will undertake the biggest infrastructure programme in Philippine history by allotting 800 billion pesos (US$16 billion) in partnership with the private sector.

    Also to have a positive bearing on the business events industry is the recent initiative of the Department of Tourism and the Philippine Association of Convention/Exhibition Organizers and Suppliers, Inc. (PACEOS) to develop a roadmap to raise the industry’s competitiveness. Tourism undersecretary for development planning Benito Bengzon Jr said the roadmap will have three parts: industry issues and challenges; short, medium and long-term strategies to meet these challenges; and recommendations on strengthening the linkages among industry stakeholders. – Rosa Ocampo

    Philippines

    SINGAPORE

    An uncertain economy ahead is making business event specialists in Singapore cautious about business in the coming year.

    Judy Lum, general manager, Diethelm Travel Singapore, warned that corporate spending would be “more careful” and “big ticket items like holding overseas events” would be trimmed.

    “My concerns lie especially with markets with weaker currencies like the UK, and (those undergoing political changes like) the US,” Lum added.

    Likewise Linda Low, manager of strategic partnership and product marketing, Pacific World Singapore, said she is “cautiously optimistic” about 2017 in view of the economic uncertainties around the world.

    According to Low, the number of business leads have stagnated, inbound business events from Australia is “still slow”, and the demand from the US and France has seen no changes.

    Low also noted rising competition for business events around the region, which does not bode well for “expensive” Singapore.

    While acknowledging the impending economic headwinds, Aloysius Arlando, CEO of SingEx Holdings, said: “The business events industry is a robust one and has proven its worth in many similar economic challenges before, so we are confident of our resilience in riding out the current wave.”

    Arlando shared that one of their strategies to combat the gloomy outlook is to calibrate their event outcomes with cautious sentiments by industry players and their cash flow management. Hence he said SingEx has adopted a flexible approach both in terms of financial payment schemes as well as in taking on a proactive partnership role with event organisers to reduce costs and increase value.

    He said: “The overall pipeline for business events for our venue remains strong in 2017, fuelled in part by bright spots especially in the IT corporate meetings and medical segments.”

    To tackle rising competition, Melissa Ow, deputy chief executive, Singapore Tourism Board, said work is being done to increase the mindshare of Singapore as a top business events destination.

    Ow said: “We are running different campaigns to highlight various aspects of Singapore to industry stakeholders and business travellers. For example, we recently collaborated with CNN, Bloomberg, and other online platforms to establish Singapore as a premier business events hub anchored on thought leadership and business opportunities, and will continue to explore further collaborations to inspire business travellers to extend their stay or return to Singapore for leisure visits.” – Paige Lee Pei Qi

     SOUTH KOREA

    There are concerns among South Korean business event stakeholders over political disputes between Seoul and Beijing impacting inbound Chinese groups, but the industry says it is working hard to build on its recent successes.

    In 2015, for example, the UIA ranked South Korea first in Asia and second in the world for the number of international congress it hosted. And in 2016, 21,000 overseas participants took part in the Rotary International Seoul Convention.

    “We expect our main incentive market, China, to decline in 2017 due to political issues,” said Kim Kap-soo, executive director, MICE Bureau of the Korea Tourism Organisation (KTO). “But KTO is planning a variety of projects in China and we will continue to carry out marketing initiatives in distant source markets such as India, Russia and the US.”

    China has long been South Korea’s largest source of incentive travellers, followed today by Vietnam and Thailand.

    To attract more markets, the MICE Bureau will enhance its Conventions and Incentives Support Scheme and introduce a MICE Ambassadors programme. It also sees the 2018 Pyeongchang Winter Olympics as a good opportunity to promote “exciting new business event destinations in South Korea,” Kim said.

    Andrew Moore, director of business development at the Conrad Seoul, is upbeat about the sector in the New Year.

    “Early indicators see us ahead of booking pace and enquiry volume for 1Q2017, and we expect this trend to continue,” he said. “All signs show that Seoul is clearly getting it right – and its star is only continuing to rise.”

    Thanks to Seoul’s reputation as the “Silicon Valley of the East,” telecommunications will continue to be the dominant sector, alongside education, finance and healthcare.

    A recent slowdown in healthcare-related events is only expected to be a blip because “it’s a soaring sector which enormous interest,” Moore said.

    Avril Lee, sales manager for the Lotte Hotel in Seoul, expects a “small-to-medium increase” in meetings in 2017. – Julian Ryall

     Page20

    THAILAND

    The Thailand Convention and Exhibition Bureau (TCEB) has projected continued growth for the kingdom’s business events industry, with targets of 1.11 million business visitors and US$2.9 billion in revenues set for 2017. These are up from 2016’s 1.06 million business visitors and US$2.6 billion in revenue.

    Picture by Merydolla/shutterstock

    Picture by Merydolla/shutterstock

    A TCEB spokesperson told TTGmice that the bureau is “confident” of achieving these targets, as several flagship events have already been confirmed in Thailand, including the 10th International Petroleum Technology Conference (2,500 delegates); the 10th International Convention of Asia Scholars (2,000 delegates); VIV Asia 2017 (30,000 delegates); Bangkok Entertainment Week 2017 (700,000 participants).

    Local business events specialists who spoke to TTGmice are echoing the optimism too.

    Impact Exhibition Management Co, general manager, Loy Joon How, said his venue in Bangkok will welcome several new international shows in 2017, in addition to regular annual events, and he has a positive outlook for the new year. The new wins include INTERMAT, a construction machinery exhibition; SIMA, an agricultural machinery show; and Beyond Beauty, ASEAN’s biggest international beauty exhibition.

    Vitanart Vathanakul, executive director, Royal Cliff Hotels Group and Pattaya Exhibition and Convention Hall (PEACH), also shared that “many groups (are) repeating their events with us in 2017” and that the number of new enquiries will make the new year a “promising” one. Massive incentive groups from Infinitus (China), Nu Skin, Meltwater and Manulife have been confirmed, for instance.

    Vitanart credited the positive performance of his properties to the Thai government’s support. He explained: “The government’s plan to develop infrastructure including the U-tapao-Pattaya-Rayong International Airport and improve road accessibility will greatly help Pattaya’s events business. From our side, the management of Royal Cliff Hotels Group and PEACH have invested heavily in improving our venues and services.” Business going into IMPACT Muang Thong Thani will also get a boost when its second hotel, an ibis brand, opens in March. Loy said the new hotel will raise the venue’s total room inventory to over 900.

    Pornthip Hirunkare, managing director-Thailand, Destination Asia, pointed out a few developments in Thailand that will stand the country in good stead when it competes for international business events – new conference and event spaces within ICONSIAM on the banks of the Chao Phraya River in Bangkok, and Phuket’s new and improved airport. – Karen Yue

    VIETNAM

    Vietnam will shift its focus towards Asia as business events from longhaul markets are predicted to soften in 2017.

    With economic growth expected to be sluggish throughout 2017, coupled with uncertainty following Brexit and the US elections, the country’s tourism industry is bracing itself for a slowdown from Europe and the US.

    Gregg Allan, vice president of operations (ASEAN) at Pan Pacific Hotels Group (PPHG), which operates Pan Pacific Hanoi and Parkroyal Saigon, said: “Corporates are more cautious about spending on large-scale events. Coupled with an uncertain global economic climate, inbound traffic from these markets is likely to be slightly less robust compared to Asia.”

    Noting Asia’s potential, Vietnam’s Ministry of Culture, Sports and Tourism is putting huge efforts into helping the business events industry grow. Vietnam National Administration of Tourism (VNAT), for instance, is intensifying its international promotion of the country’s diversity, gourmet and rich cultural heritage. Business events and cruise tourism are key focuses to attract more high-yield visitors.

    In a recent attempt to stimulate the market, Vietnamese and Singaporean travel agencies came together at a VNAT-hosted roadshow. The aim was to promote Vietnam as a business event destination while learning from Singapore, a regional leader in the sphere.

    The opening of Japan’s first tourism office in Hanoi in November is expected to push business between the two countries. PPHG has already noted growth from Japan as well as South Korea, encouraged by large foreign direct investment inflows.

     The implementation of a tourism cooperation plan between the ministry and the Russian Federal Agency for Tourism is also expected to see a continued rise in demand from Russia.

    Jeff Redl, managing director of Diethelm Travel Vietnam, said: “Due to our specific tourism products for the Russian market – sea-island leisure and sea-island leisure combined with culture tourism – Russia is still identified as an important source market.” – Marissa Carruthers





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