MICE Supplement: The Future of China’s MICE Industry

The 2011 China Incentive, Business Travel & Meetings Exhibition (CIBTM) was the largest of its kind since the event’s launch in 2005. The 21 per cent growth of the event space since last year alone is a harbinger of the industry’s future in China. Jeffrey Xu, CIBTM’s exhibition manager, talks about how far the MICE industry has come and what the future holds.

How has the MICE sector developed in China over the past decade?

The 5th CIBTM tracked the changes that have occurred in the development of the MICE sector since the show began, and this year the stats predicted the huge potential for growth in the China and Asia domestic, regional and international inbound and outbound markets for all types of meetings and events. Not only did the number of respondents to the survey increase, proving the growth in the sector, but it also showed that China is expected to benefit from the economic impact of the industry as it grows throughout the country in the future. Inbound international events to China have risen as well, but there is still room for improvement in facilities – 44 per cent compared with 60 per cent in 2010 rated destinations used as very good or excellent, citing the need for more training and professional skills to handle business visitor needs, it did show that new areas of interest include north and west China, the Bohai-rim region, the Pearl River Delta and the Yangtze River Delta.

How have the recent international events, like the 2008 Beijing Olympics and 2010 Shanghai Expo, changed the MICE industry?

The biggest and most successful global sporting event certainly had an impact. As the world watched the event, so the MICE industry wanted to see for themselves the legacy and how it could impact and enhance China’s reputation in the sector.

The 2010 Shanghai World Expo and 2008 Olympics has created an infrastructure of facilities and services that greatly enhance the offering for large MICE events and ICCA predicts China is likely to be the “premier MICE destination worldwide in the 21st century”.

The past few years have also seen world-renowned business travel management companies and DMCs move into the country to set up branches and offices offering professional services for overseas associations and corporate clients inbound for MICE business in China. American Express, BTI, MCI and TUI are just a few of the companies who were the first to arrive.

Finally the growth of large international hotel brands opening in China and not just in primary cities is another indicator that the development of the sector post Olympics is not slowing down.

What advantages does China have as a MICE destination?

Undoubtedly the biggest advantage to the MICE sector is the sheer size of the country, the choice of locations, the culture and history. Of course outbound is still one of the largest untapped resources of business for the rest of the world. All of the key industry players around the world see China as key to their business development. TUI China says on its own website: “With its booming economy and ever-growing market, China is expected to become the most popular MICE destination worldwide in the future. It possesses the attractive combination of rich cultural heritage, breathtaking landscapes and one of the world’s fastest growing economies, plus international hotel chains and even a tropical island. Add to that the relatively inexpensive rates and the proof that it can host big international events, China is home to a wealth of new opportunities.”

Disadvantages?

The 5th CIBTM Annual Industry Research presented at this year’s event cited various factors that will affect the increase in conference and event business in China and Asia. The number one influence will come from a need for a better understanding of the requirements of international business visitors followed by training and professional qualifications for employees, service, infrastructure development, costs and budgets, improving visa procedures and formalities, safety and security.

What effect did the global financial crisis have on the MICE industry in China?

Factors influencing choice of event destination predictably show cost pressures and trends in the meetings market globally having an impact on China in the future as buyers try to organise a higher number of events on lower budgets – a trend that is being seen worldwide.

When assessing the outlook for 2012 the key issues that are predicted to have the most impact on increasing conference and event business in China and Asia are cost, hotels, lack of supply or capacity, training, understanding of international business needs, infrastructure, airlines and sufficient routes, service and meeting the required standards, supply and capacity for travel, accommodation and venues.

What does the future growth potential look like for the MICE industry in China?

Critically whilst the research showed caution for the year ahead compared to the 2010 survey, reflective of the economic situation worldwide. 52 per cent still predict an increase in the volume of events, 27 per cent suggest an increase in budgets for events and 34 per cent will be increasing their marketing and promotional budgets. 32 per cent show that they will increase their selection of long haul destinations.