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Meetings, Incentives, Conferences & Exhibitions Market

MICE industry takes off in Abu Dhabi

Rebecca Bundhun  Nov 18, 2009

Rupert Murdoch, the media tycoon, is going to Abu Dhabi. Tony Blair, the former British prime minister, has already been there. These two high-profile men have become part of the conference and exhibition scene in the UAE capital, along with thousands of other delegates representing industries from fashion to high finance.

That would have been unlikely just a few years ago. Abu Dhabi would not have been the choice for large-scale organizers looking for a city to host their events. But now, thanks to the investment of a few billion dirhams, it is a major player in a global industry worth US$56 billion (Dh205.66bn) a year.

“In the newer fast-growth and emerging economies, the conventions market is increasingly seen as a critical tool in attracting business tourism and facilitating domestic growth,” said Rohit Talwar, the chief executive of the consultancy Fast Future, which is conducting research into the future of convention centers.

The capital has rapidly developed its convention industry, with its marquee investment being the Abu Dhabi National Exhibition Centre (ADNEC), which recently launched the UAE’s largest indoor auditorium with a capacity for 5,700 people.

“High-quality design and facilities of convention centers and meeting venues are at the heart of this growth opportunity, and the ADNEC Group are now seen as global leaders in the industry,” Mr. Talwar said.

But hotels such as Emirates Palace have also invested in the development of their conference facilities to play an important role in the industry.

The ultra-luxury hotel on the far end of the Corniche has an auditorium and ballroom that can hold 1,100 and 2,400 guests respectively, and also has more than 40 meeting rooms.

The newly-opened futuristic Yas Hotel, which overlooks the Yas Marina Circuit that was the scene of this year’s inaugural Abu Dhabi Grand Prix, has already attracted attention from conference organizers.

Abu Dhabi is in the right location to attract delegates from Europe and Asia, Mr. Talwar said. “Hence, Abu Dhabi’s convention center, expanding airline route network, and hotel facilities are seen as important factors in attracting these prized global conventions and trade shows.”

Business tourism accounts for about 80 percent of tourism to Abu Dhabi. Just 10 percent of these visitors come for meetings, conferences, and exhibitions. Tourism officials plan to increase this portion of high-spending visitors, who are also the lifeblood for hotels and airlines.

“The global conventions market is entering a fascinating phase in its development,” Mr. Talwar said. “Despite all the advances being made in virtual meetings and the use of social media, there is a recognition that it is in face-to-face meetings where the deepest connections are made and trust is established.”

Abu Dhabi is already pulling in major events such as Cityscape and Gastech, and it plans to expand the sector even further for a steady stream of high-spending visitors.

ADNEC opened in 2007, with IDEX, one of the world’s largest defense exhibitions, as its inaugural event. Last year, the center staged 73 events and this year it expects to hold more than 100.

“To put this into perspective, Abu Dhabi staged 14 major events at the old exhibition facilities in 2006,” said Simon Horgan, the chief executive of the ADNEC Group.

Despite the economic downturn and slowdown in global travel, ADNEC expects to attract 1.8 million visitors by the end of this year, compared with 1.5 million last year.

“Successful exhibition and convention centers are economic engines for the host city, supporting thousands of jobs, stimulating commerce, and driving up peripheral property values,” Mr. Horgan said. “The government of Abu Dhabi understands this, which is why it has placed so much emphasis on the creation of a major exhibition and conference industry.”

Having recognized the potential for the sector, the Abu Dhabi Tourism Authority (ADTA) is actively trying to make the capital a destination more appealing to event organizers.

This year, it launched its Advantage Abu Dhabi initiative, which offers organizers grants, cost rebates, and non-financial government support, such as help with marketing, to bring their events to the capital.

The ADTA this month announced that the newly-created World Green Tourism Congress is the first event to take advantage of the new scheme. It will be held in the capital next year.

“Abu Dhabi’s leadership is taking a more innovative approach,” Mr. Horgan said, adding that most governments do little to support the sector beyond developing infrastructure.

“In addition to developing some of the world’s leading facilities, the Abu Dhabi Government is committed to the long-term success of the exhibition industry and offers much support to international event organizers.”

But despite its initiatives, Abu Dhabi will have to compete with more established convention destinations, as close as Dubai and as far away as London.

Other emerging destinations such as Doha and Bahrain are also pouring money into the sector in direct competition with Abu Dhabi for a share of the convention market.

“There is strong growth in the hosting of major global conventions in destinations such as Cape Town, Beijing, Shanghai, Taipeim and Seoul,” Mr. Talwar said.

ADNEC is the largest center of its kind in the Gulf, and part of a broader Dh8bn “micro-city” development called Capital Centre. The development includes residential and commercial aspects including 23 hotels, a 2.4km marina, and a 160-meter tower known as Capital Gate, which will lean 18 degrees westward – 14 degrees more than the Tower of Pisa in Italy.

Capital Centre is expected to be finished in stages over the next three years, ADNEC said.

Those expensive investments are likely to pay off, as organizers say they favor the more modern centers.

But Abu Dhabi still has some challenges to expanding its convention center business, the main one being some of the most expensive hotel rates in the world. Hotels in Abu Dhabi are close to overtaking those in Moscow as the most expensive for business travelers, said the corporate travel consultancy Hogg Robinson Group.

Akram Sabri, the general manager of Sky Conferences and Exhibitions – which organizes events such as the Bonjour La France European Exhibition held in Abu Dhabi last month – said the emirate does need a wider price range in its hotels.

Much of the recent hotel development in Abu Dhabi has been skewed towards the five-star market, but Mr. Sabri points to recent openings of more mid-scale hotels in the capital, such as the Aloft hotel at ADNEC and Holiday Inn, as well as three and four-star hotels on Yas Island, which will offer more attractive rates.

“Most of our clients are demanding a wider range of accommodation options, from affordable and convenient to extremely luxurious,” he said.

Despite the soaring hotel rates, Abu Dhabi seems to have grown in popularity as a conference destination. A Reed Travel Exhibitions survey undertaken in January and February this year found that Abu Dhabi was the second most popular choice in the Middle East to hold events over the next year, as awareness of the capital’s infrastructure grows. Dubai took the top spot.

There has been a surge in the events sector in the region. The research showed that 81 percent of buyers who responded to the survey had held events in the Middle East over the past 12 months, compared with 46 percent in the previous year.

In any case, Abu Dhabi need only look 100 km up the road for an example of how lucrative this market can be.

“It’s a source of revenue that is becoming more and more important, and we can say that Dubai so far was very successful in attracting the MICE [meetings, incentives, conferences and exhibitions] market through the organization of major events in the city,” said Amine Hamdani, the vice president at CB Richard Ellis Hotels Middle East. “In any mature hospitality market, the MICE market is very important.”

MICE industry takes off in Abu Dhabi
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