ANALYSIS OF THE MEETING INDUSTRY IN BAKU AND OPPORTUNITIES FOR ITS FURTHER DEVELOPEMENT

8/13/2019 ANALYSIS OF THE MEETING INDUSTRY IN BAKU AND OPPORTUNITIES FOR ITS FURTHER DEVELOPEMENT

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ANALYSIS OF THE MEETING INDUSTRY IN

BAKU AND OPPORTUNITIES FOR ITS FURTHER

DEVELOPEMENT

BACHELOR THESIS ISubmitted at the

IMC University of Applied Sciences Krems

Bachelor Programme

Tourism and Leisure Management

by

FARIDA BABAYEVA

Specialisation Subject: Meeting Industry Management

Supervisor: Irfan Arikan

Date of submission: 07/02/2011


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FARIDA BABAYEVA 2

STATUTORY DECLARATION

I declare in lieu of an oath that I have written this bachelor thesis myself and that I

have not used any sources or resources other than stated for its preparation. I

further declare that I have clearly indicated all direct and indirect quotations. This

bachelor thesis has not been submitted elsewhere for examination purposes.

Date Signature

February 7, 2011 Farida Babayeva


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TABLE OF CONTENTSSTATUTORY DECLARATION ..........................................................................2LIST OF FIGURES AND TABLES..................................................................... 4LIST OF ABBREVIATIONS .............................................................................. 4ABSTRACT5

1. INTRODUCTION ...61.1 Research Aim and research questions...............................................61.2 Importance of the study...61.3Research method. 7

2. DEFINITION...... 82.1Business tourism.......9

2.2Meeting industry and its structure...102.2.1 History and development...122.2.2 Baku as MICE destination..132.2.3 Buyers...142.2.4 Suppliers...162.2.5 Agencies and Intermediaries..17

3. Empirical Research .193.1Description of the method ..193.2Research Design203.3Primary data 20

3.3.1 Industry expert interviews21

3.3.2 Questionnaire21 3.4Secondary Data22

3.4.1. Statistics on Business Tourism in Azerbaijan.22

4. Results and Analysis...254.1Theoretical Framework..254.2The phases of tourism experience.25

4.2.1. Anticipation and Planning..264.2.2. Travel to and Return Back... 274.2.3. Participation....28

4.2.3.1 Accommodation 284.2.3.2. Conference Venues294.2.3.2Catering Services..31

4.2.4. Recollection31

5. SWOT Analysis..335.1 Strengths ...335.2 Weaknesses..335.3 Opportunities.345.4Threats35

6. CONCLUSION....36LIST OF REFERENCES....38 APPENDIX...39


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ABSTRACT

The meeting industry is a newly born segment of business tourism, which has

become very common in Baku recently. Since the industry is very young in Baku,

there is a shortage of statistics as a separate element of business tourism.

Consequently, to identify the situation of the industry and to understand its strengths

and weaknesses, the industry needs to be investigated appropriately.

This thesis is aimed at exploration of current situation of the meeting industry, to

be more precise the level of industry related services and opportunities for its

further development.

The proper review of literature helped to identify what the meetings industry is,

what its major components are and the structure of the industry was understood

more clearly. Furthermore, the history of development of this field globally was

confronted with historical growth in Baku.

The interviews with industry experts were a great contribution to the development

of the research. Similarly, the questionnaires designed to reveal the opinions of

meetings and exhibitions attendants played a significant role to formulate

suggestions for the further development of this segment.

Additionally, the findings of this study can be a great contribution to the industry

since it shows the weaknesses and strengths and demonstrates the opportunities

from which the meetings industry can benefit.


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1. INTRODUCTION

1.1 Research aim and research questionsAs a newly born segment of the tourism industry in Baku and lacking proper

information and data, the meeting industry is in need of the appropriate research in

this area. Furthermore, there is a lack of the statistics on the meetings industry as

a separate element of the business travel.

The research aim of this bachelor thesis is to analyze the situation of the meeting

industry in Baku, to find out the quality of conferences including delivered services

in this sphere and to identify the future development opportunities as well.

The research questions are as followings:

1. What is the quality of the meetings and conferences which are organized in

Baku?

2. What might be the possibilities for further development of the meeting industry

in Baku?

The first research question allows further examination of the satisfaction of visitors

coming to Baku. Once the quality of conference organization has been revealed,

the second research question can be explored in more detail.

To answer these questions it is important to analyze to which factors visitors pay

attention more when choosing a destination, which needs and demands should be

met and satisfied and what service level is expected by business travelers visiting

Baku.

1.2 Importance of the study

The international tourism industry is an industry which is flourishing and growing

continuously all over the world. Being a very dynamic sector, tourism industry is

always in a state of flux, ever changing through years. It generates millions of job

opportunities for people every year, improves relationships with neighboring

countries and establishes newer networks across the globe. Apart from these

facts, one of the most important advantages of this industry is its contribution to


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the economy of a host country. It is assumed that, the contribution towards the

GDP by the World Tourism Industry will be approximately 11 % by 2011.

Furthermore, the development of tourism creates a multiplier effect, which is

mainly because of impacts on related industries such as transportation,

entertainment and catering services.

As the fastest growing sector, tourism continues to recover from the decline of

4.2% suffered last year under the impact of the economic crisis as per results

through 2010. In the first eight months of this year, the number of international

tourist arrivals exceeded the record achieved during the same period of the pre-

crisis year 2008. According to the latest issue of the World Tourism Organization

(hereinafter referred as UNWTO) Tourism Barometer, worldwide arrivals between

January and August 2010 totaled 642 million, some 40 million more than during

the same months of 2009. Based on current trends, the number of international

tourist arrivals is projected to increase in the range of 5%-6% over the full year. In

2011, growth is expected to continue at a more moderate pace, at around the

long-term average of 4%. (UNWTO press release).Thus, one of the leading and

most dynamically developing segments of tourism is business tourism, because a

successful business is impossible without contacts, exchange of technologies and

information, exhibitions, congresses, and business trips.

After having restored its independence, tourism in Azerbaijan started to develop

and beginning from 2000s the establishment of Ministry of Tourism and Culture of

Azerbaijan was one of successful attempts to develop it systematically.

Although there is quite enough information on tourism potential of the country,

including the statistics and many relevant data, still there exists a shortage ofinformation on MICE tourism.

This research will provide an overview about the situation of meeting industry in

Baku, as the opinions of experts from the Ministry of Tourism of Azerbaijan and

hotels will be taken into consideration. The study will contribute to the

improvement of delivered services in this area by revealing insufficiencies so that

they can be eliminated in the nearest future and thus the level of service towards

the guests can be improved.


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1.3 Research Method

This thesis is based on empirical research method involving collection andanalysis of primary data which is obtained through quantitative and qualitative

research methods. As per qualitative data face to face interviews with industry

professionals, to be more precise with employees of ministry of tourism and

culture, hotel conference organizing staff was conducted. Furthermore, for

quantitative method questionnaire containing 10 questions were distributed to

business travelers via e-mail. Additionally, as the secondary data the use of

already existing data has been applied.


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2.DEFINITIONS

Tourism is the worlds largest industry, responsible for more than one in ten jobs

globally (International Trade Centre web page). This trillion-dollar industry is

booming around the world even in times of recession, military conflicts, natural

disasters, and energy problems (Nickerson, 1996, 2). Tourism can be considered

to be a complex industry combining a set of interdependent businesses because it

focuses on travelers away from home and on all the services they utilize, including

the means of transport, food and lodging services, travel expediters such as travel

agents, tour operators, and reception services(Lundberg and Lundberg, 1993, v)Over time, more and more destinations have opened up and invested in tourism

development, turning modern tourism into a key driver for socioeconomic progress.

For many developing countries, it is one of the main income sources and the

number one export category, creating much needed employment and opportunities

for development. (UNWTO publication)

A business traveler coming to attend conventions or exhibitions spends money to

stay at a hotel and this money creates job in the hotel as well as transfers to

suppliers who procures this hotel with products and other goods. Additionally, when

this tourist buys a souvenir or other related commodities, the demand for such type

of local products become higher and higher. Such circulation of money in the

economy of a country is called a multiplier effect in tourism. This expansion of

money supply caused by tourist expenditure continues to circulate until the money

leaks out of the country.

One of advantages of tourism is exchange of cultures, which undoubtedly serves for

improvement of the relationships between countries and contributes to economic

growth and prosperity. Furthermore, it allows countries to share and know their

cultures, language and even business.


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2.1Business Tourism

Business tourism is the category of the travel and tourism industry concerned with

travel for business purposes, rather than travel for leisure purposes (leisure

tourism). Business tourism includes travel for meetings, exhibitions, trade fairs,

conferences, conventions and incentive travel (Yonell, 1996, 33).

Business travel accounts for approximately 9% of all international travel. Business

tourism is defined as leisure activities in conjunction with business travel. Business

tourists are less cost-sensitive than leisure tourists, spending on average twice as

much per day. Their purchase decisions are influenced primarily by their ability to

use time efficiently within business travel schedules.

As two-thirds of business travelers extend their business trips for pleasure when

they can, there is enormous potential in this market. Business tourism is expected

to be one of the hottest growth markets for travel industry providers in the years

ahead. Developing and transition economies interested in expanding revenues from

business tourism need to focus on both the individual business traveler and the

meetings and conventions market. (International trade center/UNWTO)

As the speed of international tourism accelerates, MICE tourism (meetings,

incentives, conventions and exhibitions) gets more and more popular, attracting

business tourists from different parts of the world. As a result of increasing numbers

of tourists travelling for business purposes, countries start making investment in the

infrastructure to enhance the attractiveness and convenience of the destinations

being visited.

International trade shows and conferences attract hundreds to thousands of

delegates, often from many countries. Tourism and convention planners often

include tourism add-ons for delegates. These events may include city tours, golf

and sightseeing as a regular part of their programs. (International trade

center/UNWTO).


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2.2Meeting Industry and its structure

MICE is an English abbreviation standing for Meetings, Incentives, Conventions and

Exhibitions. MICE - the new form of business tourism is the fastest growing section

of the International tourism market. It caters to various forms of business meetings,

International conferences and conventions, events and exhibitions and is slowly but

steadily capturing every big hotelier's attention. MICE tourism is the new buzzword

in the international tourist market and relates to various business groups and

individual travelers.(India Travel web page)

The potential of the global MICE (Meetings, Incentives, Conventions, Exhibitions)

industry is evident. Statistics indicate a total of 400,000 conferences and exhibitions

are organized worldwide every year, with a total outlay of US$280 billion. [Source:

International Congress &Convention Association (ICCA)

ICCA gives definitions for meeting as having minimum of 50 participants, be held

regularly and involving at least 3 different countries. This definition was approved by

UNWTO during data collection for its Tourism Market Trends.

Another definition provided by the UIA (Union of International Associations)

highlights following important criteria for international meetings:

A minimum 300 participants

Lasting at least for 3 days and

With the representative of minimum 5 different countries.

Meeting industry has three main components, which are meetings and conferences,

incentives and exhibitions.

Among above mentioned components, meetings and conferences are being

researched and studied more in comparison with incentives and exhibitions. This is

explained by the fact that, the organization of meetings is more developed than the

other ones. Although meetings industry has been researched by different authors, it

is a fact that definitional problems still continue existing. There are different

definitions provided by several meeting associations and organizations.

According to Rodgers, the structure of the meetings industry is comprised of buyers,

suppliers and intermediaries.


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Suppliers include conference venues and destinations, accommodation providers

and transport companies, agencies and specialist contractors. Both buyers and

suppliers are welded together and supported by national bodies and associations,

trade media and educational institutions, each contributing to the overall structure of

this fast developing, global industry. (Rodgers, T. Conferences and Conventions)

2.2.1 History and development

The phrase conference industry is of very recent origin, and is certainly not one

that would have been heard until the second half of the twentieth century. Yet

peoples need to congregate and confer is one of the things that defines our

humanity and, for a multitude of different reasons, meetings and gatherings of

people have taken place since the early days of civilization. (Rodgers, T. p 2)

One of the highest profile events in the past couple of hundred years, perhaps

almost a launch event for our contemporary conference industry, was the Congress

of Vienna held from

September 1814 to June 1815. The Congress was called to reestablish the

territorial divisions of Europe at the end of the Napoleonic Wars and representatives

included all of the major world powers of the day (with the exception of Turkey). It is

tempting to imagine what the delegate spend must have beenlike, with delegates

such as Alexander I, Emperor of Russia, Prince Karl August von Hardenberg from

Prussia, and Viscount Castlereagh and the Duke of Wellington as the principal

British representatives. Each representative would have been accompanied

by a substantial delegation of support staff and partners, requiring accommodation,

social programs, lavish corporate entertainment, ground handling, not to mention

state-of-the-art conference facilities. The Vienna Convention Bureau no doubt

celebrated long and hard its success in attracting such a high profile, high-spend

event to the city!


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As the nineteenth century progressed, universities increasingly provided facilities for

the dissemination of information within academic circles, while the boom in spa

towns and, in the UK,

Victorian resorts with assembly rooms began to make available larger public spaces

for entertainment and meetings. At the same time, the development of the railway

network was accompanied by the construction of railway hotels alongside major

stations. Many of these hotels had substantial function rooms available for hire.

(Rodgers, T. p 4)

The situation was somewhat different in North America during the latter half of the

nineteenth century, particularly across the eastern seaboard of the USA where

various trade and professional associations, as well as religious groups, were being

formed and, as they became more established, beginning to hold conventions for

their memberships. (Rodgers, T. p 5)

As towns became more and more aware of the value the organization of meetings

had for them, a group of businessmen decided in Detroit, Michigan, for the first time

in history, to employ a salesman to invite meetings to be held in their town. In this

way, the first convention bureau was established, and so 1896 was the year when

the industry officially came into being. (Business Travel& Meetings Magazine)In Azerbaijan, the roots of business tourism are connected with Great Silk Way,

being as a stopover on this trade route for its geographical location. In addition, the

trade caravans passed across the territory of Azerbaijan through Silk Way

connecting East Asia with the West.

2.2.2 Baku as Meeting Destination

Rapid growth of business contacts with foreign partners is typical of Azerbaijan

which is undoubtedly due to the development of other industries such as oil,

construction, telecommunication and etc. That being the case, the meetings

industrya sub segment of business tourism became popular in Azerbaijan in the

last decade.

Today Azerbaijan is a dynamically developing country that holds a solid position in

the world. Very favorable conditions have been crated lately for doing business as


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per the government policy paying a great attention to the development of non oil

spheres of economy. Dozen of hotels and business centers, and a lot of cultural and

tourist facilities have been built recently.

All the above mentioned positive changes have led to the fact that Azerbaijan is an

attractive arena for business tourism as well. It is also promoted through various

types of economic forums, exhibitions and conferences being held on diverse

subjects on a regular basis. Both governmental and private organizations take part

in the realization of these events.

Nowadays all conditions are created for the comfortable arrival of businessmen as

well as their involvement in doing business. If business meetings were mainly held

in Baku in the past, today the majority of the regions of the country are capable of

hosting business meetings at the highest level.

2.2.3 Buyers

In the meeting industry buyers can be classified as corporate, association, public

sector and entrepreneurial buyers.

The buyers are conference organizers and meeting planners who buy or, more

accurately, hire conference venues and related services in order to stage their

events. [...] The term corporate is used to describe conference organizers often

called meeting planners who work for corporate organizations. These are

companies established primarily to generate a profit and thus provide a financial

return for their owners. They can be manufacturing or service companies which may

be found in oil and gas, pharmaceutical, IT and communications, financial services

and travel industries. (Rogers, 2008, p. 28)

a) Corporate buyers

Decisions about the conference or meeting (choice of venue, budget, size of event,

visiting speakers, programme content, and so forth) are taken by the corporate

conference organizer or a line manager or the managing director, or by a group of

such people in consultation. The decision-making process is relatively


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straightforward and more-or-less immediate. (Rogers, 2008, p. 36) . Corporate

events can be of different types and sizes as shown in the below table.

Table 1. Types of corporate meetings (Rogers, T)

b) Association

The term association organizer or buyer covers those representinga wide range of

organizations, including trade associations (whose members share the same

profession), voluntary associations and societies (whose members join for the same

interest), charities, religious organizations, political parties and etc. There are also

certain organizations which are not work related and therefore referred to as

SMERF groups (social, military, educational, military, religious and fraternal).( Rogers, 2008, p. 61)

Association conferences are large scale meetings with longer periodicity often

involving hundreds of attendants. The decision regarding destination and venue is

made by a committee after conference organizer presents a relevant list of

destinations to be chosen.

c) Public Sector

The public sector, sometimes referred to as government includes organizations

such as municipalities, local executive bodies, and educational bodies. These are

nonprofit organizations and therefore the delegates attending such conferences are

expected to cover their own expenses.

Annual General Meeting (AGM) Product Launch

Board Meeting Sales Conference

Corporate hospitality/entertainment Training course/seminar

Exhibition/exposition Technical conference

Incentive travel Team building events

Roadshow Symposium


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d) Entrepreneurs

According to Rogers T (2008, p 53), this fourth type of the buyer has quite important

role for the meeting industry. He defines entrepreneurial buyer as someone who

identifies hot topics in the business or academic world and then plans and

produces a conference at which the topics can be presented, discussed and

debated by high profile speakers and experts.

2.2.4 Suppliers

The suppliers are those who make available for external hire the venues,

destinations and many other specialist services without which todays conferences

could not take place.

The supply side of the conference industry is divided into three categories which are

venues, destinations and other service providers.

a) Venues

As per Rodgers (2008, p 56) any type of the building could be promoted as

conference venue. This is due to the fact that, there has not been established anyclassification and grading system for venues yet.

However, over half of all conference venues are located within hotels being

particularly important for corporate market sector. These can be city center hotels

or hotels close to airport, highway and motorway.

That being the case hotels benefit when important and large scale association

meetings come to town. Aside supplying conference with venues, hotels become

accommodation provider for conference attendants. Additionally, it is oftenobserved that, associations choose the hotel as headquarters during their stay and

thus it produces public relations benefits for the hotel (such as being featured in

national and international media coverage).

Besides hotels, there are other venues, which are

purpose bu i l t venues designed for hosting both large scale and

smaller events


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univers i ty and o ther academic venuesare used for different kinds of

meetings during vacations

civ ic venuesfor instance council chambers or town halls functioning as

venue

unusu a l venuesunique venues which add special charm the event and

making it memorable.

b) Destination

The destination is very important criterion in decision making process regarding

the event to be staged. Therefore, conference organizers pay great attention to the

location, i.e. destination. To attract meeting business, each destination must have

venues, attraction, and well developed infrastructure.

c) Other

Alongside above stated suppliers, there are also others such as audio visual

contractors, telecommunication companies, transport companies, floral

contractors, and interpreters. (Rogers, 2008, p 60)

2.2.5 Agencies and Intermediaries

Meetings or similar events can both be organized and run by employees of the

buying organization, or by intermediaries or agencies hired by an organization to

plan and run their events on behalf of them (Davidson & Cope, 2003, p. 113).

Rogers also claim that, intermediaries act as buyers on behalf of their clients and

at the same time deals with organization and planning of the event. These are

PCO (Professional Conference Organizers), Venue FindingAgencies, Conference

Production Companies, Incentive travel houses, DMC (Destination Management

Companies), corporate event companies, exhibition organizers, and etc.

a) Professional Conference Organizers

A PCO is an event management firm that is employed to assist companies in

conference organization. Its responsibilities include researching and

recommending a suitable venue, helping to plan the conference programme

including the social programme, marketing the conference and handling delegate

registrations, booking accommodation/housing for delegates, planning an


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exhibition to run concurrently with the conference, producing a budget and

handling all of the conference finances. (Rogers, 2008, p. 61).

b) Venue Finding Agencies

In comparison with PCO, the role of venue finding agencies is limited to

researching and recommending a suitable venue for a meeting. Additionally, their

responsibility is finding and presenting at least three potential venues to the

conference organizers.

Venue finding agencies may also get involved in booking accommodation for

delegates, and

again would expect to charge commission to the hotels and other accommodation

providers. (Rogers, 2008, p. 61).

c) Conference Production Companies

These are companies specialized in technical organization of meeting, i.e. dealing

with set up, lighting, sound system, installing audio visual equipments and etc.

Such type of companies assists in the organization of high profile events, including

presentations, press conferences and product launches which necessitate

advanced technology and equipment.d) Incentive Travel House

Incentive Travel is a motivating tool used by companies to reward or stimulate

the employees of the organization.

Incentive Travel is a global management tool that uses an exceptional travel

experience to motivate and/or recognize participants for increased levels of

performance in support of organizational goals (SITE, 2006).

The specialized nature of the incentive sector has led to the growth of IncentiveTravel houses, as these agencies are generallyknown. (Rogers 2008, p 70)

These organizations create special incentive programs for companies to

accomplish their mission and motivate their employees.

e) Destination Management Companies

SITE defines a DMC as a local service organization that provides consulting

services, creative events and exemplary management of logistics based on an in-


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depth knowledge of the destination and the needs of the incentive and motivation

market.

DMCshave detailed knowledge and expertise of a specific destination, be this

city, an island or other discrete region, and sometimes even a whole country

(Rogers 2008, p 71). Their role include locating venues, providing delegates with

accommodation, arrange transportation and organize pre or post conference

programs, as well social programs for spouses.


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and put into the force. This helped to find out that questions are accurately

formulated and dont have a concealed meaning behind.

The addressed population was chosen to be business travelers who have been toBaku at least once. Therefore the vast majority of questionnaires were sent to the

business travelers via e-mail and the answers were analyzed with help of special

computerized statistics program.

Secondly, as previously collected data the statistical reports were used so as to

contribute to the development of the research. Furthermore, information taken

from media articles and relevant websites was quoted throughout the study.

Due to the low season and delimitations, sampling size for survey was 100 people

and most of them were distributed online.

3.3 Primary Data

3.3.1 Interviews with Professionals of the Industry

In depth interview is a way of asking questions which allows the interviewee to

have more control of the interview. Here the aim is to explore the interviewees

feelings about the issue being explored. (Social research methods)

To find out the current situation and the relevant up to date information, 3 industry

professionals have been requested to participate in the interviews. Among them,

there were representatives of Ministry of Tourism, C&B Managers of popular chain

and local hotels, who answered the questions with a great enthusiasm. It should

be noted that, the list of interviewees could be enlarged, however it occurred to be

a problematic issue due to the time pressure.

Since the interviewed people are experts of their field, the information they

provided was a great contribution to the progress of the research.

It should be mentioned that, the average duration of conducted interviews was

about 30 minutes and the responses to the questions were captured through note

taking.


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3.3.2 Questionnaire

A particular questionnaire was designed to distribute among respondents. To

assure the validity of the collected data the pilot survey was conducted in order

to ascertain the selection of right questions and the fact that they dont imply any

hidden meaning.

The content of questionnaire is designed so as to find out the main research

questions. Nonetheless, not all the issues were covered, but all necessary

questions were included to the list.

The main questions were regarding the planning phase to visit Azerbaijan, the

evaluation of onsite experience and the questions which are meant to find out the

post travel imagination of the tourist.

Moreover, some questions were asked to be answered on 5 scale evaluation,

which can be a good method to avoid neutral evaluation. The section where

respondents were asked to provide their suggestions to improve the quality of

delivered services in tourism field was also included to the survey.

3.4 Secondary Data

As the secondary data, the statistical report of the incoming tourists was taken

from the State Statistical Committee of Azerbaijan (AzStat), since it is the major

source of data relating to the overall business travelers including the conference

and meeting attendants. It will be a great contribution to find out what are the top

countries that business tourist come from, what the length of their stay is, which

type of the accommodation and transportation they use and etc.

Furthermore, brochures and promotional materials published by the Ministry of

Tourism and Culture were used throughout the study. It has also be mentioned

that, the previously conducted research with the purpose of exploration the attitude

of foreign travelers to the tourism in Azerbaijan was analyzed and added to the list

of the secondary data.


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All the secondary data are of high reliability, since they belong to the 2010 year

and also were collected by experts of this field.

3.4.1 Statistics on Business Tourism in Azerbaijan

Before passing examining the existing data, it is worth to note that, there is not any

specified statistics particularly on MICE tourism. That being the case, the only

source to depict the data on meeting industry, is to consider it as a sub segment of

business tourism. The following data were collected from State Statistical

Committee of Azerbaijan to undertake this research.

- Visitors origin

- Length of stay

- Accommodation

- Usage of transport

The yearbook Tourism in Azerbaijan which consists of data on number of

enterprises such as hotels, number of foreign citizens traveling to Azerbaijan by

countries, as well as number of nights spent in hotels and etc.

According to the yearbook, it can be seen that, there is a significant increase in the

number of tourists coming to Azerbaijan. This can be explained by the fact that,

availability of tourism information has been increased throughout these years.

There are certain countries from which people travel to Azerbaijan with different

tourism purposes. As indicated in below chart (chart 2), the regions which

generate the majority of tourist inflow to Azerbaijan are the neighboring countries -

Russian Federation and Georgia. This is due to the economical, social and cultural

interrelations between the countries. The next countries are Iran, Turkey and

others. The others, which constitute minor percentage, include United Kingdom,

Kazakhstan, USA, Germany, Uzbekistan, Turkmenistan and etc

Travelers by Countries of Residence


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Figure 1. Travelers by Countries of Residence Source: AzStat, Tourism Yearbook

2010

Correspondingly, these data proportions have not changed during the last 4 years

from 2007 to 2010. This leads to an implication that, there is a specific percentage

of people coming from particular regions each year.

From this chart, it can be observed that, even more than 50 % of travelers are from

miscellaneous countries and their proportion even doesnt reach 1 % as a separate

tourist generating region.

The purpose of the travelers visiting Baku varies from visitor to a visitor. From thegeneral observation, one can come to the point that, the most represented type of

inbound tourism is business tourism, which directly contributes to the economy of

the country. (see chart 3)

Dynamics of number persons arranged by purpose of trip

Figure 2, Dynamics of number persons arranged by purpose of trip Source: AzStat,

Tourism Yearbook 2010

Russia

17% Georgi

a

14%Iran

7 %

Turkey

4%

Ukrain

e

1%

Others

57%


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As a consequence of purpose of the trip, there exists a trend that, business tourists,

particularly, conference and meetings attendants stay less than leisure travelers.

The MICE tourists are business people who are short on time and travel specifically

to make business deal in a timely manner. That being the case, the average

duration of their stay is around 13 days. (Chart 4)

Structure of tourists arranged by duration of stay in 2010, per cent

Figure 3, Source: AzStat, Tourism Yearbook 2011

4 Results and Analysis

4.1 Theoretical Framework

To measure the satisfaction of the guests travelling to Azerbaijan, the phases of

tourism experience are analyzed separately. Different authors define the tourism

experience cycle in a different way. Killion (1992 after Clawson 1963) defines the

tourism experience as four stage tourism cycle, which are planning, travel to,

return travel and recollection.

On the other hand, Nickersons model of travel phases is comprised of five steps,

which are indicated in below table:


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.

Figure 4, The six travel experiences. Norma Nickerson (1996)

4.2 The Travel Experience

The travel experience is formed while a tourist passes through all elements of

the above illustrated travel phases cycle. After all these phases are passed, a

certain image of a country is formulated. Therefore, to obtain a positive image is

very important for a destination. Thus, destination managing organizations put

very much effort to sustain the positive image and keep the reputation of the

country in a very high level.

Once a person comes back home satisfied with overall travel experience, he or

she becomes a live promotion for the destination, i.e. gives a positive feedback,

recommend friends or colleagues and etc. This is the point where word of mouthbecomes a very effective marketing tool for a destination. Correspondingly, to

make the travel experience successful, memorable and profitable for tourists

visiting destination, the quality of delivered services should be assured and

maintained in a high level.

Anticipation

Planning

Travel to

Participation

Travel

back

Recollection


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In general, respondents have a very positive opinion about the image of

Azerbaijan. The majority of travelers added that, they enjoyed their trip to Baku.

This argument is also backed up by the chart 9.

4.2.2 Travel to place and back

These phases of travel are closely connected with transportation. According to the

results of the survey, 92 % of the travelers reach Baku via plane. In comparison

with this, the other means of transportation are less preferred by survey

participants.

The international carriers which provide flights to Baku are the followings:

- No frills carrier Air Baltic

- Turkish Airlines via Istanbul (more expensive)

- Austrian Airlines via Vienna

- Aeroflot via Moscow

- Emirates via Dubai

- British Airways nonstop connection (from England)

The general results obtained from questionnaire, demonstrate that, the meeting

attendants travel use organized (coached) tours when being in Baku.

The survey results show that, the respondents were not satisfied with the level of

transportation of services within Baku, when it comes to the availability of

information and possibility to find a destination place. Correspondingly, on the

scale of evaluation from 1 to 5, the current situation of transportation services was

evaluated as 2.5 points.


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4.2.3 Participation

This part of travel is the core phase of travel cycle in which attitudes and opinions

about the destination are formed, as a traveler experiences all the activities thathave been foreseen in the anticipation and planning phases. The other reason

why this phase is so important is that, after a tourist undergoes all phases, he or

she will have a certain impression and thoughts about the destination. It is the

phase that, that has a great impact on the travelers decision whether to come

back or not. Therefore quality of delivered services and all other related things

concerning the comfort of a MICE tourist becomes the priority. That being the

case, this part will be analyzed in detail compared to the other stages of travel

experience. Therefore, the issues such as accommodation, conference venues,

catering and other related services will be considered in this section.

Additionally, travelling habits of the meeting attendants (for ex: with whom they

travel) will be examined, since they may moderate other interrelated components

of the participation phase, such as accommodation options or accessibility of pre

or post conference tours and etc.

According to the results of expert interviews, the business travelers mostly travel

alone, because the events which they attend are scheduled for the whole duration

of the occasion. This fact is also backed up by the answers of the respondents,

saying the majority of them travel to meetings on their own. However, the second

large population of survey participants stated that they travel with groups.

4.2.3.1 Accommodation

Most of the time, the choice of accommodation is made in the planning phase oftravel. Usually the extent of the event is the main influencing factor when it comes

to accommodation preferences. According to the representative of the Ministry of

the Tourism and Culture, the reservation procedures are undertaken by

employees of the ministry, when a large scale event is organized. However, in

some small scale events, the participants are required to make selection of the

hotels on the basis of offers sent by the ministry. Furthermore, the payment

obligations also influence the choice of accommodation, according to the results of


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conducted interviews. When the accommodation expenses of event attendants are

covered by the government, the choice is usually made by employees of the

ministry.

Another principle for the selection of accommodation is the location, i.e. the

proximity of the conference venue to the hotel. Below, are mentioned five Baku

hotels which are mostly preferred by conference organizers.

Chart 2, Hotels accommodating meeting attendants.

4.2.3.2 Conference Venues

In general, there are not so many conference and exhibitions centers throughout

Baku. The majority of them are located in the city center. However, with regard to

the development of tourism, namely the business tourism, many efforts are put to

meet the requirements of high level and demanding business clientele. Therefore

a number of conference and business centers supplied with modern and up to

date technology are being built.

In order to promote Baku as the center of MICE industry in the region, a

specialized exhibition complex, Baku Expo Center was constructed on the way to

Baku Airport. It is the second biggest exhibition center in CIS region, after the one

built in Moscow. The main purpose of its construction was to attract the attention

of foreign companies from all over the world to Baku. Furthermore, with its

construction, it was planned to highlight the historical significance of Azerbaijan

Hotel Name Location # of Rooms # of Beds

Airport Hotel Baku Baku Airport 207 231

Qafqaz Point Hotel Yasamal region,

K.Kazimzade 118

93 120

Hyatt Regency Baku Izmir street 182 230

Park Inn Baku Azadlig Avenue 248 372

The Landmark Hotel Baku Nizami str, 90 A 100 100


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FARIDA BABAYEVA 31

and the whole Caspian region as a trade and commercial center throughout the

centuries.

The most exemplary as well as the biggest hall to hold official events is theGulustan Palace. After the Contract of the Century was signed in the Gulustan

Palace in 1994, it gained a public status: all important state events are conducted

here. Inauguration of the President of the Republic of Azerbaijan was held namely

in Gulustan Palace. International summits, conferences, award ceremonies as well

as various cultural events are regularly hosted in the hall. The fact of hosting

events gives a special significance and scale to the Gulustan Palace.

Another multipurpose venue is sports and concert complex named after Haydar

Aliyev. This complex enjoys all necessary conditions to hold large scale

international events.

Additionally, Baku Business Center is also in the list of the most convenient and up

to date conference and exhibition centers of the capital. This three storey building

hosts several types of events beginning from small conferences to large scale

cocktail receptions.

It has to be added that, all these convention venues are located in close proximity

with the leading hotels of the city. The respondents were asked to evaluate the

convenience of conference and exhibition centers, so as to find the answer to the

main research question, i.e. identify the level of service quality of conference

venues in Baku.

Convenience of Convention Centers

Figure 6, Convenience of convention centers

Excelle

ntVery

good


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4.2.3.3 Catering Services

To find out the level and quality of service in the restaurants and cafes of the city,

the survey participants were asked to evaluate the level of service and quality of

food. It was found out that although the majority of respondents were satisfied with

the quality of food served in restaurants and cafes, they are unhappy with the level

of delivered service. Moreover, there were complaints about the language

knowledge of restaurant staff.

Correspondingly, the overall assessment of restaurant service throughout the

capital was 3, on the scale of evaluation from 1 to five.

4.2.4 Recollection

The final element of travel cycle is the recollection phase. If the overall experience

is successful, it is probable that a MICE delegate could become a future tourist for

the country. Once the expectations of a traveler are met, he or she recommends

that destination to friends or colleagues.

The survey results explain that, meeting attendants have a positive image about

Azerbaijan, namely Baku, as proved by the chart 10.

Image of Azerbaijan

Figure 7, Image of Azerbaijan.

The majority of respondents stated that they will come back to Baku again with

great pleasure.

010

20

30

40

50

60


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FARIDA BABAYEVA 34

Likewise, there is also lack of PCOs (Professional Conference Organizers) and

conference organizing companies specialized in the arrangement of meetings.

Therefore, some insufficiencies come out in the process conference organization.

The survey results show that, there are complaints about the avai labi l i ty of

tour is t in form at ion throughout the city. These include lack of maps, signs and

transportation information in Baku.

One of outspoken issues as the weakness is compl ica ted v isa procedures for

the travelers from western countries. Before, the visa was issued on arrival, and

now it is not the case for every tourist stepping borders of Azerbaijan. Travelers

from non CIS countries have to get a LOI (Letter of Invitation) from the Ministry of

International Affairs, which is time consuming procedure. However, the travelers

from countries which are close to Azerbaijan, as Turkey dont face these

difficulties.

5.3 Opportunities

The great opportunity for Baku to become one of the leading meet ing

dest inat ionsis the increase of promotion. If promoted well, the possibility to reach

this level is very high, based on the strengths mentioned above.

Likewise, there is an opportunity to open a Convent ion and Vis ito rs B ureau,

which will be responsible for increasing product awareness of potential visitors

and deal with the promotion of the meeting industry in Baku.

Another opportunity is to enhance the numb er of d i rect f l igh ts to Baku and

decrease ticket fares. Thus, the efficiency of transportation services can be raised

and more and more tourists will be attracted to Baku.

Subsequently, more in format ion about tour ism can be placed in differentchannels, so as to take away the insufficiencies regarding the tourist information

availability.

The next opportunity is to decrease the level of prices and promote PCOs, to

assure the attention to detail of conference organization.

After that, aside with Baku, other cit ies o f Azerbai janshould also be developed

as a meetings and convention center such as Ganja (the 2 nd biggest city after


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Baku), Nakhchivan and etc. Consequently, new hotels and offices are constructed

in these cities.

Moreover, the level of education in this sphere should be increased, by opening

the event management facultyat Azerbaijan Tourism Institute. This will directly

contribute to the quality of service in the meetings industry, as there will be

educated specialists in this field.

5.4 Threats

As said by industry professional, the development of te lecon ferencingcan be a

potential threat for the meeting industry not only in Baku, but also globally. Thus,

virtual meetings become popular with the advancement of technology. The

professionals explain that, the teleconferencing is used to replace face to face

meetings and hence the aim is to reduce costs.

In conference and meetings industry, there is a probability of having non

repeat ing customers, since most of conference attendants dont make choice of

the destination on their own. This process is done by the conference organizers

and therefore to grab their attention the uniqueness of Baku as meeting

destination should be marketed worldwide.

Another threat can be pol i t ica l instabi l i ty, in terms of relations with the

neighboring country. This might have a negative influence on the image of the

country as a tourist destination and eventually the attention and interest of foreign

investors can be distracted from the country.


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Furthermore, the number of carriers which provide direct flights to Baku should be

increased in order to improve the level of transportation services to Baku.

Additionally, the industry would benefit, if the government gave consideration to

the visa policy for EU citizens.

Also, the establishment of Convention and Visitors Bureau will be advantageous

promotional strategy, as more information will be available about Baku as meeting

destination.


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LIST OF REFERENCES

1. Berendien Lubbe , Tourist Distribution: Managing the Travel

Intermediary

2. Bilalov, B The business tourism in Azerbaijan Republic (2005) ,

Rebirth XXI century

3. Deborah Peters and Barry Jones, Size and Impact of Meetings

Industry, 1996

4. Gayle Jennings, Norma Polovitz Nickerson2006, Quality tourism

experiences5. Rodgers, T, Convention and Conferences, second edition.

6. State Statistical Committee of Azerbaijan, Tourism Yearbook 2010

7. The Travel & Tourism Competitiveness Report 2008 2008 World

Economic Forum

8. UNWTO, Tourism Highlights 2008 edition

9. William M..K.. Trochim,, Research Methods Knowledge Base10. http://www.seebtm.com/en/the-history-and-development-of-

meetings-industry/

11. www.themeetingsindustry.org
http://www.seebtm.com/en/the-history-and-development-of-meetings-industry/http://www.seebtm.com/en/the-history-and-development-of-meetings-industry/http://www.themeetingsindustry.org/http://www.themeetingsindustry.org/http://www.seebtm.com/en/the-history-and-development-of-meetings-industry/http://www.seebtm.com/en/the-history-and-development-of-meetings-industry/


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Questionnaire to Meeting/Exhibition Attendants in BakuThis research is conducted by the student of ATI (Azerbaijan Tourism Institute) in order to

evaluate current situation of meeting industry in Baku. Your contribution to the study ishighly important, as your attitude will allow investigating correctly the situation of theindustry in Baku and will contribute to its development.If you would like to obtain a copy of the study, please indicate your e-mail address below:________________________________________________________________________________________________________________________________________________

Please, choose one or multiple answers by marking a box, in questions whereoptions are given. There are questions have an evaluation scale with points from 1to 5, where you may either circle or cross the chosen number.

1. ____________________________________________________________

2. Personal InformationSex

MaleFemale

Age_____________________________________________________________3. Who you travel with

alonewith spousewith childrenwith group

with friends4. Where you have collected information about Azerbaijan from

internetexhibitionmediafriends or colleaguesdid not know anything

5. How did you reach Azerbaijan? byplanebuscar

trainship6. During your trip you travel by

own carpublic transportcar rentaltaxicoach (organized tour)


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7. Please, evaluate from 1 to 5: Very bad 1 2 3 4 5 Verygood

Transportation to Azerbaijan:

Agenda

The level of service

Transportation within Baku:

opportunity to find a place

Information about transport

Accommodation

Availability of tourist information

Knowledge of foreign languages

Level of service in restaurants/cafes

Quality of food in restaurants/cafes

7. How many conferences have you attended in Azerbaijan?0 1 2 3 4 or more

8. For you the image of Azerbaijan is?Very positive positive good satisfactory fair

9. Would you like to visit Azerbaijan yet again?

yes no10. Will you recommend Baku as a good meeting destination to your friends/colleagues?

yes no

Which country are you from?

______________________________________________________________________________________

_____________________________________________________________________________________

Your opinion or/and suggestions concerning tourism in Azerbaijan are highly appreciated

___________________________________________________________________________________

___________________________________________________________________________________

___________________________________________________________________________________

___________________________________________________________________________________

___________________________________________________________________________________

THANK YOU FOR COOPERATION!


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ANALYSIS OF THE MEETING INDUSTRY IN BAKU AND OPPORTUNITIES FOR ITS FURTHER DEVELOPEMENT

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