China’s extended Chinese New Year break, imposed because of the Covid-19 outbreak, ended on February 9. Liu Ping, founder and CEO of China Star, and SITE international board director, relates how life still has to go on amid a bad situation
Now that businesses have reopened, what is China’s MICE industry facing?
Members of the tourism industry including those handling MICE, are still working from home online.
On February 12, China Star had its first online meeting using DingTalk – a free professional office tool, developed by Alibaba, used very widely in China, as well as used by more than five million enterprises and organisations globally.
When speaking with my China counterparts, the opinion is that the Covid-19 impact on the MICE industry is probably the most severe ever. Most inbound events have been cancelled, have changed destination or have been postponed; while all domestic events taking place in February have been cancelled.
A couple of event technology companies have also downsized manpower by about 10 per cent.
What are the industry’s main concerns and why?
Personally, I believe that the number one concern is cash flow. China’s MICE industry operates on a low-profit margin and event companies usually have no pledged assets, like a property, to apply for a bank loan.
The fact is very few small event companies like to borrow money from the banks as the interest and repayment would put them under a lot of pressure.
What interim and recovery strategies are you taking?
Companies have to watch their cash flow and reduce expenditure and create a good training plan with clear targets in mind. Leaders have to identify weaknesses and take the opportunity to train staff to be ready to compete when business gets back to normal.
Meanwhile, MICE companies have to keep connecting with clients and offer accurate information about the situation in China.
China Star has been able to refund clients for events that have been cancelled, and is trying its best to protect the client relationship by building trust to resume the partnership whenever the situation is back to normal.
We are also taking this “unusual opportunity” to do research and create new and better products and reorganise the company’s database to be able to do a more efficient job later.
Last but not least, as industry insiders, we must try to share China’s MICE story with the outside world. Don’t underestimate the power of an individual. One of my posts about Shanghai on LinkedIn has received more than 120,000 page views.
What specific support does the industry hope to get from the government for it to recover?
The most practical support is for the government to return the Quality Guarantee Deposit of RMB1 million (US$143,259) to travel companies with an outbound business license and RMB600,000 to those only involved in domestic travel.
The deposit is bigger for large companies, and the government has decided to return 80 per cent of the deposit to help them with their cash flow. The first 15 travel companies in Beijing have received RMB11.7 million of the Quality Guarantee Deposit.
Other government support includes giving a tax cut, refunding the unemployment insurance, reducing office rent, etc.
As a private company, however, I don’t expect that the government can do much. I have to rely on my own resources.
What I would like to suggest is for the government to make a bigger effort to promote China as a very attractive MICE destination once Covid-19 is contained.
There is no single government department taking care of the MICE industry, and it has never done enough to promote the destination.
The government should start investing in MICE professionals to attend selected MICE shows, build beautiful booths with scheduled activities of Chinese culture experiences, and create a platform for them to meet hosted buyers.
The world is now focusing on China because of the bad news. We should turn the negative into a positive if we can create and showcase the new image of China at tradeshows. We can also invite journalists, really influential ones, to visit China and to report on what they experience, and the government should entrust China’s MICE professionals to organise these fam trips.
Could you share some examples of what the MICE industry is doing to help itself?
SITE China Chapter will be helping second- and third-tier cities to improve their services for event management. The plan is to invite young professionals to be part of the team at events handled by established event companies in Beijing and Shanghai in 2H2020. And we will give priority to those in Wuhan.
In Wuhan, quite a number of MICE professionals are working as volunteers to help those in need. Some venues have been converted into hospitals.
Personally, I cannot do much. But I promised in an ICCA China WeChat group that the first city I will visit after the Covid-19 situation is contained is Wuhan to do whatever I can to help the industry recover.
How different is the situation today compared to SARS in 2003?
I had just started the company with no money in the bank, a 13-year mortgage, a son in middle school, old parents living with me and a small new team of employees.
I made up my mind after SARS that, no matter what in future, China Star had to accumulate enough cash flow to survive any disaster.
Seventeen years later, China Star is much calmer because of that decision. If I could survive then, someone else in my situation now can survive because China today is stronger.