When the gargantuan, US$2.4 billion Venetian resort opened it doors just over a year ago on Macau’s Cotai Strip, there was much breathless debate about whether the former Portuguese colony could mount a serious challenge to Las Vegas as the globe’s premier gambling destination.
For a certain group of people in the Macau Government Tourism Office, however, the exciting thing about the Venetian was its potential to attract something decidedly less sexy: meetings.
While it has expended considerable effort to establish itself as a world-class gambling destination, Macau has come to realize its future lies in moving beyond the blackjack tables. To that end, the territory has set itself the goal of becoming a center for business tourism, specifically promoting itself as an attractive place for MICE (Meetings, Incentives, Conventions and Events).
According to a recent report by the United Nation’s World Tourism Organization, MICE visitors on average spend at least three times as much as ordinary tourists. Equally important, MICE events represent predictable, repeat tourism business – a huge advantage in an industry known for dizzying fluctuations.
Some regional meetings and conventions can return to the same location as many as three or four times a year, according to Alfons Westgeest, vice president of Kellen Company, a conference organizer.
“Unless the place is very attractive, I don’t think a regular tourist would go back three times in a year,” Westgeest said.
That’s a notion not lost on the Venetian, which boasts nearly 2 million square feet of meeting and convention space, roughly 20 times the size of its legendary gambling floor.
“[With MICE], we can achieve a steadily high occupancy in the hotel and the rest of the property,” said Wolfram Diener, the Venetian’s vice president of conventions and exhibitions.
Macau is not the only Chinese city pursuing the MICE market, Shanghai and Beijing having spent millions on turning themselves into attractive meetings destinations. Few cities have fared as well as Macau, though. Diener says the Venetian brought in 800,000 MICE travelers in its first 12 months. Consequently, Macau’s MICE numbers more than doubled from the previous year.
But while the Venetian and a slew of other sparkling new convention venues have made a splash, Macau is still a newcomer to Southeast Asia’s MICE scene.
If it wants to become the region’s top MICE draw, it will have to contend with other Asian heavyweights Hong Kong and Singapore – ranked 12th and 3rd respectively, according to the International Congress & Convention Association’s list of the world’s top 20 meetings cities.
King of MICE
Hong Kong may be the region’s financial center but Singapore is the MICE king. The city-state tallied nearly 3 million business visitors last year, accounting for almost 30% of all arrivals. Macau, meanwhile, attracted similar numbers of business travelers, but they only represented 11% of the former colony’s total. Business visitors account for more than a third of the Singapore’s US$2.8 billion in annual tourist receipts.
“Singapore was more or less first off the mark,” explained Edward Liu, an industry expert and president of the Asia Federation of Exhibition & Convention Associations. “They foresaw the emergence of MICE in Asia.”
According to Liu, Singapore’s foresight dates back to the mid-1970s, when it hosted a series of oil and gas industry events in the parking lot of the Grand Hyatt on Orchard Road. It has remained on top ever since, largely thanks to a combination of experience, excellent infrastructure, good airport connectivity and a reputation for safety.
“People feel comfortable coming here,” said Liu.
While physical safety is one concern for MICE travelers, it is another kind of safety on which much of Singapore’s success rests – and it is here where Macau has hope of replicating that success.
The Swiss of Asia
Westgeest believes that Singapore’s dominance can also be traced back to its neutrality, or what he describes as “lack of a geographic preponderance.”
“When anyone talks about Singapore, they have the city-state in mind, which has been very stable and also very neutral in terms of politics,” Westgeest said.
It is for this reason that so many companies and associations, including Kellen Company, feel safe establishing their regional headquarters in Singapore.
Macau, too, boasts a certain kind of neutrality. It may now be officially a part of the PRC, but unlike Beijing or Shanghai, it still has few political or economic agendas of its own outside the gambling industry. This gives Macau an edge, in particular with international trade fairs.
“Many trade shows in other places are set to promote first of all the exports of local companies,” Diener said.
In other respects, though, Macau has work to do. As Liu notes, part of what makes Singapore such an attractive destination for meetings and conventions it its well-honed service sector.
“Currently there is still a dearth of expertise in the [Chinese] MICE industry,” he said. “There are not too many people who are well-trained in managing the meetings and conventions in a big way, on a big scale.”
Neither can Macau afford to rest on its laurels when it comes to entertainment. Gambling is certainly a draw, particularly with the incentive trips companies dole out to their high-performing employees. But these incentive travelers are some of the toughest to please.
“They tend to look for new destinations, new experiences,” said Liu.
This is a lesson Las Vegas has clearly learned, and one Singapore understands as well. After much debate, the city-state recently approved the opening of two entertainment complexes, euphemistically called “Integrated Resorts,” where gambling will be allowed.
It has also managed to secure the world’s first nighttime Formula One race – on September 28 – and boasts a number of other diversions.
Even more fundamental is the issue of connectivity. Where Singapore has long reveled in its reputation as the crossroads between East and West, with daily flights to and from nearly every part of the globe, Macau is relatively isolated. On this score, Westgeest suggests Macau is best served working in tandem with Hong Kong so it can take advantage of the latter’s airport.
Head to head
Although Macau is looking to Singapore’s MICE model for development, the level of direct competition between the two remains a question.
According to Diener, Macau tends to attract a lot of MICE business from the pharmaceutical and medical, finance, insurance, IT and direct sales sectors. That would appear to put it in direct competition with Singapore, which has made up for losses in manufacturing and heavy machinery – much of it to mainland China – by attracting players in the high-tech and financial services sectors.
But the two cities are, to some extent, serving different markets. While the majority of visitors to Singapore come from Indonesia, Macau’s main market is mainland China, which accounted for 55% of visitor arrivals in 2007.
Westgeest suggests Macau concentrate on cultivating its relationship with groups in its immediate vicinity. The former colony may not have much hope of attracting many global meetings, he says, but it can do well attracting regional meetings, what he calls the “bread and butter” of the MICE sector.
It may be the case that the region’s growth will make plenty of room for everyone to play.
“It’s not a zero sum game,” said the Asia Federation’s Liu. “It may be that new destinations open up as centers for MICE. But that augurs well for the industry overall because it simply means that more and more events will be brought to Asia. It’s not at the expense of one or the other.”