The goldmine that is China’s MICE market

A 2015 landmark study places the industry’s worth at US$110 billion in 2014, and a double-digit growth has been forecasted. International hotel chains are eager to sink a bite into a larger slice of the pie, reports Caroline Boey


According to the Market Assessment of MICE Business Travel In China study conducted by the Global Business Travel Association’s (GBTA) GBTA Foundation, top MICE spend in China is dominated by manufacturing which accounts for US$59 billion, followed by utilities with US$13 billion, and agriculture and forestry with US$5 billion.

In terms of MICE spend per sales dollar, the study states that US$0.39 is spent for every US$100 in company sales. As for MICE intensity by sector, total MICE spend as a percentage of sales is highest in the utilities sector at 1.29%, compared to manufacturing at 0.39%.

These figures explain why major international hotel chains in China, despite the country’s economic slowdown, are ramping up expansion plans to cater to the growing Chinese MICE demand. Many developments are now being designed with a mega exhibition and convention centre attached, coupled with CSR considerations.

For example, Sheraton Harbin Xiangfang Hotel, with more than 20,000m2 of meeting space, is the largest facility in north-east China. It can accommodate up to 5,000 people and features a car elevator that provides direct access to the banquet hall.

Meanwhile, the Starwood Sustainable Meeting Practices Programme supports and reinforces Starwood Hotels and Resorts corporate commitment of reducing energy and water consumption by 30% and 20% respectively by 2020. Starwood currently has 161 hotels in operation and more than 160 in the pipeline across its nine lifestyle brands.

In 2015, Starwood opened Element Suzhou, the group’s first MICE-friendly hotel in the Asia-Pacific with carbon dioxide detectors in its meeting spaces. Once the limits of carbon dioxide are exceeded, the windows automatically open.

To grow market share, Starwood is strengthening its SPG Pro loyalty programme for meeting and travel professionals. They also recently launched a SPG Pro campaign targeting executive assistants.

Wendy Huang, Starwood Hotels & Resorts’ vice president, sales & marketing, Greater China, said government support for China MICE is strong.

In April 2015, China’s State Council announced its policy to improve MICE development in China. In September, they announced that the service industry – including the MICE industry – should be a development priority in future years.

Huang said: “The government aims to improve urban infrastructure to increase MICE competitiveness and the policies show the great potential of the Chinese MICE market in 2016.”

The shape of MICE in China is also evolving and Huang said new types of MICE business other than traditional industry and government events are emerging.

“There were more training and exhibition events, and association and non-governmental organisation meetings in 2015,” Huang said.

On the uptrend were MICE events related to IT, banking, finance, pharmaceuticals and automotive.

At InterContinental Hotel Group, which operate 250 hotels in nearly 100 Chinese cities, Kenneth Macpherson, chief executive, Greater China, observed that not only is the Chinese government promoting the MICE industry, exhibition and convention demand from various industries is also emerging.

“We’re very optimistic about MICE in China. The fast rate of growth in China’s exhibition industry stems from strong domestic demand for convention and exhibition services as well as the large volume of international trade,” he said.

“Together with some powerful local partners, we firmly believe that we can take advantage of a golden opportunity to integrate our rich resources in the MICE industry.

“For example, our InterContinental Shanghai National Exhibition and Convention Center is scheduled to open in July 2016. It will be the only hotel in the National Exhibition And Convention Center (NECC), one of the world’s biggest exhibition centres.”

Pointing to the China Council for the Promotion of International Trade and the China MICE Economy Development Report in 2016, Macpherson added that “structural readjustment” and online innovations will power the development of the MICE industry.

He elaborated: “Mobile is the most important trend in China’s future development, possibly in every industry. IHG is the first in China to embrace new technologies and platforms. We utilise an advanced digital ecosystem to connect the guest journey through digital platforms, enhancing customers’ experience, which in return contributes to a robust 23% of revenue uplift.”

While first-tier cities such as Beijing, Shanghai and Guangzhou are the first to attach great importance to the development of the MICE industry, Macpherson said the development pace of second-tier and third-tier cities is quickening and cities, such as Chengdu in south-west China, have great potential to develop the MICE industry.

Equally optimistic is AccorHotels’ vice president sales, distribution, marketing and loyalty, Greater China, Bobby Ong, said that despite the slowdown in the economy, he does not expect to see a reduction in the meetings segment, where its China hotels count pharmaceuticals, IT and manufacturing as its top three industries.


Ong added: “Chinese companies see meetings as an investment to doing business and more opportunities are forecasted for secondary cities due to business development opportunities at a lower cost.

“We relaunched our Le Club Meeting Planners programme and this year, we will continue to drive membership to grow higher loyalty in this segment. We will continue to drive business internally by cross selling programmes among our hotels. As part of AccorHotels digital plan, we hope to launch the capability for our meeting planners to book small meetings via our AccorHotels website before the end of this year.

“In 2016, the MICE outlook for Shanghai, Beijing and Guangzhou – which offer state-of-the-art facilities comparable to any major city in the world – will continue to grow with the availability of space and flights. Also, the slight devaluation of the yuan against the US dollar will make meetings in China more competitive.”

China’s mega MICE figures

The Market Assessment of MICE Business Travel in China is a study based on the GBTA Business Travel Index (GBTA BTI) – the survey of 1,500 Chinese business travellers and macroeconomic data. It is the first in-depth look at China’s domestic meetings spend. Here are the key findings:

In 2014, China’s MICE spend was US$110 billion or 45% of total business travel spend with a volume of 138.5 million or 42% of business travellers. Business travel spend in China is estimated to reach US$299 billion in 2015 and increase to US$335 billion in 2016.

China’s domestic MICE sector will continue to grow with a potential net increase of 20% based on respondents forecasting the number of meetings they expect to attend in the next 12 months compared to the previous year.

Three locations are responsible for 76% of China’s MICE activity. The cities of Shanghai, Beijing and Guangzhou contributed 27%, 25% and 24% respectively.

In China, MICE spend is dominated by manufacturing, which accounts for a spending of US$59 billion, far ahead of utilities in second place with US$13 billion, and agriculture and forestry in third place with US$5 billion.

Profile of Chinese MICE delegates
The Market Assessment of MICE Business Travel in China study also revealed the following:

Of the 1,500 business travellers surveyed, 86% said they had attended a MICE meeting with 10 or more people, and where they had to travel 80km or more in the last 12 months.

A “typical” MICE event had between 50 and 100 people attending a convention or conference, a training course, a seminar or some other group meeting.

As for the type of venue the MICE event was held in, 38% were in a conference or convention centre, 33% were on site at company offices and 21% in training centres.

The average length of stay was 2.9 nights, where 59% stayed between two and four nights, while 25% only stayed one night. The average spend per trip was US$829 with air transportation taking up 32%, lodging 20% and F&B 15%.

Hotels reaped a large benefit when a meeting is held at the same property with a designated room block, where 88% of delegates stay at the hotel.

The top reason for choosing a hotel is the location (62%), followed by hotel service and amenities (51%), and brand (37%).

Airlines also benefitted greatly with 64% of attendees flying to the MICE event, compared to 18% who took the train and 14% who drove a rental or personal car.

The most common reason for taking the trip for 53% of business travellers is to attend a training course or to attend a seminar.

There are different reasons for attending different MICE events but the most important reasons were for business development, followed by training.

The median age of a MICE delegate is 37. Majority (48%) of delegates were aged 35 and 44. An overwhelming 72% of meeting attendees were male.

Sponsored Post