ITB Asia Daily Report – Day 2
Global meetings planners wield immense power. Their decision where to hold a large business event is often contentious.
Global meetings planners wield immense power. Their decision where to hold a large business event is often contentious. Attendees at ITB Asia in Singapore found out about some of the political factors at play during an October 21 Association Day session called, “What Global Meeting Planners Look For When Bringing Their Meetings to Asia.”
Money is only part of it. Bidding for an event and winning hosting rights is not just about price, but whether host cities are able to meet all the selection criteria, said Ms. Helga Severyns, senior director of the International Association of Public Transport (UITP).
The association’s biennial congresses average about 2,300 delegates comprising senior management and politicians from more than 80 countries. The trade exhibition occupies about 30,000-40,000 square meters and attracts 300 to 400 companies.
Sharing information on UITP’s evaluation process, she said that UITP analyzes the total business value since there are both conference and exhibition components. Participants’ needs and budgets also had to be considered.
Among the selection criteria are the state of the public transport system, convention and exhibition facilities, attractive networking and social events, and the ability to bring in and display railway rolling stock.
The selection criteria are broken up into three main sections: public transport and supporting markets; infrastructure; and operational logistics and finance. Through a detailed scoring system, points are allocated for each dimension.
The general secretariat then prepares the findings and the results are presented to the executive board to shortlist three bidders, who are then invited for a briefing. A six-member team visits the cities and the final selection is made four years before the event.
“All contractual commitments submitted and accepted are firm,” said Severyns. “The host must provide a bank guarantee of €550,000, which is refundable.”
To an observation that UITP has never held its convention in Asia, Severyns acknowledged that only Sydney had been the venue in 1993. It did not mean Asia was excluded from consideration, she said.
“Singapore was one of the three finalists for the 2007 event but lost out in the final analysis,” she said. Although a frontrunner for many association conferences, Singapore lost out because it could not fulfil the demands for heavy railway equipment in the exhibition.
So while it appeared that few cities could meet UITP’s criteria, Severyns said that with Asia’s rapid urbanisation and growth, more cities would now qualify for consideration and eventual hosting.
Meantime, the next UITP Congress and Exhibition will be in Dubai in April 2011. The host city for the 2015 event will be chosen in February next year from among Frankfurt, Montreal and Milan.
THE ADVENT OF “PURPOSE DRIVEN” CHINESE TRAVEL
While China’s outbound market provided huge potential, it was important to know the particular needs of the Chinese traveler if the industry wants to capture a slice of the market.
That was one of the key recommendations from a panel discussion entitled, “How To Tame Your Dragon,” at the WIT Lab at ITB Asia 2010 on October 21 in Singapore.
Ms. Mildred Cheong, director, Channel Management, China, Abacus International, said that it was necessary to understand the mindset of the Chinese traveler.
Ms. Cheong illustrated her point with an anecdote about a bus load of Chinese travelers visiting Singapore who cleaned out a sale at a Louis Vuitton shop. A similar bus load of Chinese travelers to Hong Kong snapped up units in an apartment block. A third group in Malaysia bought office and factory buildings.
“The Chinese traveler is very purposeful, and it’s important to bear this in mind when making arrangements for the group. Aside from air travel and hotel arrangements, there is a need to cater to their specific need, which means working with other parties like real estate agents,” she explained.
Mr. Jens Thraenhart, president, Chameleon Strategies, Inc. and co-founder/ executive partner and chief strategist, Dragon Trail, China said the prevalence of such purpose driven travel meant that staff had to be trained to cater to the Chinese traveler.
“Traditionally, tourist guides take them to places and earn commission from retailers and operators. Now the situation has evolved and Chinese travelers decide where they want to go,” Mr. Thraenhart said.
Bobby Ong, regional VP, sales and marketing – China, Kempinski Hotels S.A. compared the burgeoning China market to similar trends in the past when visitors from Taiwan and Japan were dominant.
“We saw the same excitement 10 years ago when the Taiwanese and Japanese were coming in numbers. Just like we had Japanese guest relations officers then, we are recruiting Chinese staff to liaise with visitors from China now,” said Mr. Ong.
However, Mr. Ong said visitors from China were pragmatic and seldom ventured beyond a specific geographical region.
“Ninety five percent of the market goes to Hong Kong, Malaysia, and Singapore. They know that by shopping outside China, they can avoid the luxury tax, which together with the favourable currency conversion makes a difference in their spending power. The ones who venture further have worked or live overseas.”
TRAVEL LEADERS WANT MORE INVESTMENT IN SERVICE STAFF
During ITB Asia in Singapore leaders of the travel trade called on industry partners to upgrade their service staff to cope with rapidly changing markets. At the WIT Ideas Lab panel discussion entitled “An Audience With Travel Leaders” on October 21 hospitality industry service staff came under scrutiny.
“Training of frontline staff is a particular concern, and I would encourage governments of emerging countries in particular to support the hospitality industry in terms of providing training programmes and scholarships,” said Mr. Ray Stone, senior advisor, sales and marketing, Asia Pacific, Accor. Mr. Steffen Weidemann, CEO, IFH, Institute for Hospitality Management, echoed the panel’s sentiments. He emphasized the need for training to be specific to the needs of different markets.
“Just as hotels organizations invest in bricks and stones, there is a need to invest in the development of staff and staff qualifications. In Germany, for example, only 1.5 percent of total investment in the hotel industry goes towards service staff development,” said Weidemann.
The panel was upbeat about a rebound in the global travel market after the financial woes of 2008-2009. However, they were cautious to point out that the industry was still a long way from a return to pre-crisis levels.
There was cautious optimism from corporate travel experts. “Austerity measures have been reversed and internal travel has come back somewhat. In corporate travel, first class hasn’t rebounded as quickly, but we do see a return to form for business travel,” said Mr. Mike Bezer, vice president, global sales, Asia Pacific, Carlson Wagonlit Travel.
Although stringent measures and tighter controls are now in place, Mr. Bezer said that there were signs of a rebound overspend which could result in a spending freeze in the next six months.
Turning the attention to the cruise market, Mr. Lim Neo Chian, board member, Singapore Cruise Centre, said the sector remained resilient recording growth of 4 percent over last year.
Lim reported that the center saw nearly 70 percent growth in Asia Pacific compared to 12 percent in Europe, even though Asia’s growth from a very low statistical base.
Mr. Lim cited three factors that would result in growth for the Asian cruise industry. “There is strong commitment from Asian governments to build new cruise spots. New port of calls will come on board in 2014. In addition, there is a regional push in Southeast Asia to promote cruise holidays. Cruise liners are also including more Asian ports as cruise destinations,” he said.
“The potential for cruising in Asia is great. We are currently at 0.1 percent in terms of penetration in Asia. Even 3 to 4 percent growth could see mind-boggling figures,” Mr. Lim surmised.
THE FUTURE OF MEETINGS: IS IT REALLY ASIA’S TIME?
Is it really the golden age of the “Asian century,” and if so, does the trend extend to the meetings industry?
On October 21, a four-member panel at ITB Asia in Singapore continued the Association Day theme of meetings in Asia. During the session entitled, “Future Trends: Asia and the Global Meetings Industry,” Europe-based Mr. Marcel Vissers, editor in chief, Headquarters and MIM Magazine, said that trends varied by industry. In the meetings sector he said there were very few “trend makers and trend watchers.”
He said: “There are merging economies in Asia, so the trend has started, but Asia still has a long way to go.”
His view was challenged by Ms. Quirine Laman Trip, group director of business development, Kenes Group, who said that large global PCOs such as MCI and Kenes were able to spot trends and set the pace.
Mr. Noor Ahmad Hamid, ICCA regional director Asia Pacific, said that based on ICCA’s growing membership, which now stands at 166 members in Asia, it was evident that Asian growth was well underway, with substantial expansion of venue capacities and facilities.
Pieter Idenburg, CEO, Suntec Singapore International Convention & Exhibition Centre, cautioned that while Asian cities are building grand convention and exhibition facilities, they also had to consider how to fill the space with paying clients. Finding the talent to manage the venues is also a challenge. Forming alliances and taking a longer, 10-year horizon would be useful, he said.
On private-public sector partnerships, Mr. Oliver Chong, director, Conventions & Meetings, Singapore Tourism Board, explained that STB was a catalyst. It looks at how to help partners make their events better. Intervention includes both financing and content. Industry development is important; the CVB can facilitate, but ultimately, associations must run things, he said.
Idenburg said that Singapore was rather an exception as it had a “homogeneous machine behind it.” There were many reasons why other destinations did not fare as well, including political ones.
Agreeing, Laman Trip said countries should make it easier for associations to hold events in their cities. She also suggested positioning the destination as a “powerhouse” for instance when targeting a global event and emphasizing the diversity and exchange of knowledge for a regional event.
STUTTGART LAUNCHES PREMIUM CAR TOURS
A unique luxury self-drive tour of southern Germany is being promoted to Asian and other tourists.
The city of Stuttgart will be revving up its festival calendar to celebrate the 125th anniversary of the birth of the automobile beginning in May 2011. The capital of the German state of Baden-Württemberg is the historic site where Carl Benz invented the famous Benz Patent Motor Car in 1886. The city will mark the event with a series of events centering on the theme of the automobile.
Stuttgart-Marketing gave details to the media at a press conference at ITB Asia on October 21.
The briefing was held to announce the launch of the Premium Cars of Southern Germany tours. These allow tourists to self-drive Mercedes-Benz, Porche, Audi, and BMW cars around southern Germany. The route follows motoring heritage with visits to the three premier automobile manufacturing locations of Stuttgart, Munich, and Ingolstadt.
The tours include recommended stops at automobile museums and sightseeing in the cities. There are many enticing country vistas that should appeal to Asian travelers.
“We decided to launch the Premium Cars of Southern Germany tour in Asia because Asians are passionate about cars and travel,“ said Ms. Annegret Herzig, head of public relations, Stuttgart Marketing. “So this product combines the two interests. We encourage travelers from Asia to book the tours from March onwards when spring sets in and the scenery is beautiful.”
The theme will gain even more international prestige thanks to the 125th anniversary of the invention of the car. “The launch of The Automobile Year of 2011 also makes it a good time to embark on the tours,” Ms. Herzig added.
The Premium Cars of Southern Germany tour is a showcase project representing cooperation among the cities of Munich and Ingolstadt linked by the common bond of the automobile.
All overnight stays will be in four or five-star hotels. The unique trip can be augmented by optional tour packages in each of three locations. The scheduled duration is eight days, but this can be adapted to suit individual or group requirements.
The celebration of the automobile jubilee includes a whole summer of events with special exhibitions in museums and cultural institutions that provide insight into the automotive history. The very first automobiles were conceived in a workshop in Baden-Württemberg by Wilhelm Maybach and Gottlieb Daimler. The main production plants of both Mercedes-Benz and Porsche are also located here, underlining Stuttgart’s close involvement with the automobile.
NEW PHARMA AND HEALTHCARE CODES IMPACTING THE MEETINGS SECTOR
Decisions on where pharmaceutical and healthcare meetings should be held are now being driven by new American legal codes controlling marketing and sponsorship. Destinations in Asia may benefit from these new strictures.
Speaking at ITB Asia Association Day session on this subject on October 21, Alfons Westgeest, group vice president of Kellen Company, the HQ for the US Healthcare Convention & Exhibitors Association (HCEA), briefed delegates on the revision to the 2002 PhRMA Code, which came into effect January 2009. He analyzed its impact both in the USA and other countries.
While the focus is mainly on sales and marketing issues, conferences must still adapt to the changing situation, said Westgeest. He also addressed doubts and misconceptions about the code.
For instance, while greater transparency is intended, it is recognized that third-party scientific and educational conferences or professional meetings can contribute to the improvement of patient care. In such cases, financial support from companies is allowed.
“A company should not directly sponsor or host a meal at a continuing medical education (CME) program. However, pharmaceutical companies are still allowed to support a conference, but less so for an individual doctor or R&D professional,” Westgeest explained.
At third-party conferences or professional meetings at which CME activities comprise only part of the conference or meeting, a company may sponsor a meal or reception if it is permitted by the group holding the conference and is separate from the CME portions of the program.
European and Asian versions have sprouted from the American marketing codes.
Westgeest continued: “Knowing the rules can help you to adjust and identify new opportunities that respect the rules.”
Turning to the outlook for 2010 and beyond, he said surveys are pointing to a drop in professionals’ attendance this year but a slight pick-up in 2011.
This is a challenging year for healthcare exhibitors, particularly pharma companies. Exhibitors and convention organisers are also sorting out what is and isn’t compliant. As such, metrics and attendee data will become more critical.
“The good news is that conventions are still a cost-effective opportunity for achieving corporate marketing objectives,” said Westgeest.
However, he posed this question to the audience: “Will the various codes influence where you hold your events? For instance, if one country is stricter, will you go elsewhere?”
That could lead to some interesting developments.
BHUTAN LOOKS TO LEISURE TRAVEL AND MEETINGS
A team of eight tour operators, hotels and the national airline, led by the Tourism Council of Bhutan (TCB), is targeting tour operators and meeting planners at ITB Asia who are looking for a refreshing new destination.
The remote, mountainous nation of Bhutan has hitherto been associated mainly with religious tours and trekking. It is now expanding its offering to include culture, education and small conferences and meetings.
Mr. Kunzang Norbu, head of the services division of TCB, said they are promoting customised FIT tours, educational field trips for university students and meetings for up to 250 delegates.
“The leisure market comprises mainly visitors from the USA, Germany, Spain, Italy, Japan, China, and Singapore. Chinese interest rose dramatically after two movie stars held their wedding ceremony in Bhutan,” said Mr. Norbu.
“We already have corporate and society meeting groups from India, Malaysia, Singapore, and the UK and hope to draw more. Several hotels can handle regional meetings – we had a SAARC event, for instance.”
International air access is via Delhi, Kolkata, Dhaka, Kathmandu, and Bangkok. Most East and Southeast Asian traffic goes through Bangkok.
GERMANY EXPECTS STRONG GROWTH IN ASIAN ARRIVALS
The German National Tourist Board (GNTB) is promoting travel to Germany along with 19 partners. It expects that Asia’s current market share of 39 percent to Europe will increase to 47 percent by 2020.
Travel from Asia to Germany soared in the first seven months of 2010, with around three million overnight stays by visitors from Asia in hotels and guesthouses with more than nine beds, and at campsites. This was a 21.8 percent year-on-year increase.
The three top-producing countries from Asia for January to July this year were China, Japan, and India. Of the three, China had 24.2 percent growth with 554,000 overnight stays, followed by Japan with 543,000 overnight stays (up 11 percent) and India with 225,000 overnight stays (19.7 percent growth).
QATAR AIRWAYS ADDS PHUKET AND HANOI
Qatar Airways sees good growth potential in Asia and is launching more new destinations in the region. Phuket joined the network this month. Hanoi will come online in November.
Phuket is served six times a week from Doha via Kuala Lumpur and will go daily in November. The airline enjoys fifth freedom traffic rights on the Kuala Lumpur-Phuket sector.
The Phuket services are part of an overall capacity increase to Thailand, which is witnessing a return to high traffic loads. Doha-Bangkok frequencies will increase from twice to three times daily with effect from November 1.
Qatar will commence four flights a week to Hanoi, the Vietnamese capital, on November 1 and increase frequency to Ho Chi Minh City from three flights a week to daily.
Qatar’s Asia Pacific routes now extend to 17 destinations and make up almost 20 percent of its global network.
The airline has received strong interest and support from Singapore and Japan for its South American services since launching non-stop daily flights from Doha to Sao Paulo in June. Buenos Aires also joined the route network in June and is served six times weekly from Doha.
IN BRIEF FROM ITB ASIA
SLH keeps adding: Small Luxury Hotels of the World has added 47 hotels since January, including India, China and Japan. Reservations are up 16 percent year-to-date and revenue is up 12 percent since January, said CEO Paul Kerr at ITB Asia. The company now comprises 519 properties in 70 countries. The company has launched a Japanese Twitter page and is active on three Chinese social networks. Some 25 percent of the company’s Facebook followers are from India.
Slick Indochina DMC Website for Khiri: Thailand and Indochina travel specialists, Khiri DMC has launched enhancements to its B2B website at http://www.khiri-dmc.com/index.aspx . Exhibiting at ITB Asia, Khiri management said the new site was easier to navigate, included sample tours with creative slide shows of the destinations – Thailand, Cambodia, Laos, and Vietnam – and had Google maps for each tour.
EVENTS NOT THE ONLY ISSUE FACING ASSOCIATIONS
A roundtable session at Association Day at ITB Asia on October 20 discussed topics based on delegates’ expressed interests. These were membership development and retention, communicating the value of associations to government and members, developing non-dues sources of revenue, creating exceptional meetings, general association management issues, and intellectual property.
Membership development and retention: The consensus was that maintaining membership numbers is only as good as an association’s technology. Databases must be created and maintained. Associations have to provide sufficient and relevant benefits and personalize their appeal.
Suggestions included having member-only access on the website with useful content and member-get-member promotions, such as hosting a prestigious event and asking members to bring a guest. Significant price discounts for members will also make the association appear more credible and valuable to them.
Certification is an important value-add. For continuing education schemes where points are awarded, an organizer has to endorse applications to governing bodies. When annual re-qualification is not mandatory, associations could create credentials to make this more attractive.
Developing non-dues sources of revenue: The amount of revenue that can be collected through subscription is constrained. Conferences and seminars typically generate additional income. To expand the reach, paid attendance could include business stakeholders and spouse programmes. The latter not only derives revenue but certain destinations will attract more interest when special tours are arranged.
Subsidies from government agencies will also help agency coffers, as will charging for training stints.
Research reports and consultation services can earn associations additional income because they will be paid by users of these services, who may be individuals or companies.
With publications, besides the usual revenue streams, associations could offer a wider body of knowledge that people would be willing to pay for and also develop more creative ways of selling, for instance through electronic media and online.
Creating exceptional meetings: To draw better support from attendees, a charity element will go down well. For instance, keynote speakers can donate their fees to a charity of their choice.
Having a dynamic speaker at the end of an event — and not just to kick off a conference – will ensure that the event ends on a high note. It creates excitement and being the last item on the agenda, attendees will leave satisfied, especially if the conference chairperson wraps up proceedings by summing up the highlights and saying, “See you all again next year in….”
General association management issues: Strict regulations on medical meetings by the Food and Drug Administration in the USA give grief to organizers, sponsors, and attendees alike. Organizers must be careful who they are dealing with. Regulations in the USA also affect those outside the country and impinge on their activities. On the other hand, there are fewer controls in Europe and much variation host countries.
Communication is another issue where some members are always in touch with the executive committee or secretariat on all sorts of matters. Others remain completely silent and almost non-existent.
There are also members who turn up at events without registering, or register at the last minute, causing problems and inconvenience to organizers.
Some members want to be on the board of directors and get recognition but are not prepared to do anything. The challenge is how to make people contribute their time and efforts and not be there in name only.