MICE stands for meetings, incentives, conferences and exhibitions. It is a flourishing industry in China’s fast developing travel and tourism sector.
Beijing’s municipal tourism bureau expects a direct annual income of US$1.9-2.8 billion from conferences and exhibitions by 2010. The MICE boom is sweeping Shanghai too. According to SMERT (Shanghai Foreign Economic Relation and Trade Commission), the city’s exhibition space grew by 25% in 2006.
The industry is growing beyond the major cities. Hainan island, known for its tropical climate and white beaches, has transformed itself into a major events destination. It has hosted the Miss World pageant from 2003 to 2005 and the 2006 East Asian Seas (EAS) Congress.
This March, a collection of hotels and resorts from Sanya, the most developed tourism area on Hainan island, backed by Sanya Tourism Developing Administration, launched a brochure that highlights the island’s MICE facilities.
Growing foreign interest
What is driving this boom in China’s MICE market? The increase in foreign firms who are setting up shop in China, according to John Roberts, hotel manager of Le Royal Méridien Shanghai, which offers MICE packages.
“Foreign companies continue to invest heavily in Shanghai and China, so there is increasing demand for MICE events as they introduce their products and services to the marketplace and train local associates,” he said.
Roberts has seen the industry grow in the last few years. He said guests attending MICE events contribute to a larger percentage of occupancy in his hotel than they did just two years ago. The majority come to attend events and exhibitions in the the pharmaceutical, electronic, information technology and chemicals industries.
For China hoteliers, the MICE market is an essential component to success. As Roberts noted, “Our goal is for almost 50% of our rooms’ business to come from [the MICE] segment.”
Benny Jiang, director of sales and marketing at the Radisson Plaza Xing Guo Hotel Shanghai, said the MICE market is becoming increasingly important to his hotel, especially with the World Expo – the ultimate exhibition – scheduled for 2010. “The World Expo 2010 will bring about a boom in the local travel and hospitality market, but it is also a good chance to let the world know more about Shanghai, so the boom can continue,” he said.
Organizing events in China has become easier as logistics have improved.
“Since China’s entry into the WTO, the logistics of holding exhibitions has eased,” said Raymond Chan, managing director of Sydney-based Henson Properties, which wants to hold property exhibitions in China. “There are established companies that do all the groundwork for you. They provide good support and services.”
China’s WTO entry means the government has had to withdraw from participating in exhibitions to create a more competitive MICE market. Last year, government-sponsored international fairs in Shanghai dropped to 2%, the lowest rate ever recorded in the mainland.
Although most of the signs are positive for China’s MICE market, it has plenty of room for improvement. The mainland lags behind its regional neighbors, Hong Kong, Macau and Singapore as a major MICE destination. The problem is that although many Chinese cities offer world-class facilities, high-quality service is still lacking. Service staffs’ poor English-language skills, for example, is a major stumbling block.
Global trends also suggest that communications technology is reducing the need for face-to-face meetings. According to the China Travel Association, business travel accounted for 45% of total travel in 2000, but only 20% in 2004.
Still, with the Olympics and World Expo scheduled to take place in the next three years, China’s tourism and hospitality industry is bound to grow. It appears the MICE trap has been set to lure plenty more business travellers in coming years.