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Introduction to the Operation and Management of MICE industry

Chapter 1

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Objectives1. An overview of the industry: Definitions & Terms2. Outline the potential benefits and significance of the

meetings, incentives, conventions and exhibitions (MICE) industry to Thailand

3. Briefly explain the impact of MICE industry* Economic * Political * Environmental * Technology *

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Introduction� Chapter 1 provides an overview of the environment of the conventions and

meetings industry and introduces the student to the global MICE industry. � A profile of the characteristics of the industry includes a review of the

international and domestic MICE market and an exploration of the facilities and infrastructure that are available within the country.

� The economic, political, technological and environmental impacts of the MICE industry are reviewed.

� In studying this chapter, students should consider the progress of the Thailand MICE industry during the last 10 J15 years in relation to its international counterparts and consider the potential challenges for the future.

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Outline

1. An overview of the MICE industry2. The importance of MICE industries3. The Global Market of MICE industries

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Introduction to MICE industry

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What is business travel and tourism

� Business tourism is concerned with people traveling for

purpose which are related to their work. As such it

represents one of the oldest forms of tourism, man having

traveled for this purpose of trade since very early times.

(Rod Davidson)

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Definitions & Terms (MICE)= Meetings ก� � ����

= Incentives ก� ������������� ��!� �"�#$

= Conventionsก� � ����'��(������)*'��(+,-.

= Exhibitions"��34("4*�56� 3$��*� 7ก�

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Meetings, Conferences and Conventions

� An organized event which brings people together to

discuss a topic of shared interest. [It may] be commercial or

non-commercial ! may be attended by 6, or many

hundreds ! it may last from a few hours to a week !

[What makes] a meeting qualify as part of business tourism

is that it engages some of the services of the tourism industry

(Rod Davidson)

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M = Meetings� An event where the primary activity of the attendees is to

attend educational sessions, participate in meetings/discussions, socialize, or attend other organized events.

� Could be formal, informal, as well as the venue arrangement of either internal or external organization.

� The use of external services e.g. venue, F&B, services� Basically, there are three categories of meeting.

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Meetings1. Association Meeting, which are

usually of a practical or technical nature and are related to individual trade association, professional societies or academic institutions.

2. Corporate Meeting, which businesses use to communicate with staff and distributors.

3. Government Meeting, which the governors from all over the world are participated. For example WTO, APEC and IMF conference

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Incentive Travel

� 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 the organizational goals

Society of Incentive Travel Executives

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I = Incentives� A reward system in which the company pay

for its employeeBs tour programs as to compensate and motivate them, who have achieved companyBs goal, profits, revenues or sales.

� Program might include a normal tour program, companyBs activities as well as an achievement of particular event

� Company pays for their employees, however their employees sometimes have to share the expense too.

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C = Conventions� Contain activities & purposes as same as

formal meetings , however the theme or size

of the event tends to be larger/ Bigger

� convention is an assembly of persons met for a common purpose. Conventions are often held annually, calling for more intensive planning organizes not only the business of the convention, but also an extensive social program.

� Basically, there are three categories of convention.

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Conventions� Convention refers to the big meeting, popularly used in USA� Congress refers to the big meeting, popularly used in European

countries and the Commonwealth generally related to politics, the assemblies especially the official assembly. In USA, the Congress refers to US parliament.

� Conference refers to the big meeting that last for several days with hundreds or thousands of participants in USA or other region. Normally the conference is accompanies by the exhibition,

show or other activities.

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Exhibitions

� Presentation of products or services to an invited audience with the object of inducing a sale or informing the visitor !Exhibitions are considered part of the business tourism industry because the stimulate travel (for both exhibitors and visitors)

(Rod Davidson)

� Exhibitions may also be called trade or expositions in different part of the world.

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E = Exhibitions� An event at which products and services

are displayed. The primary activity of attendees is visiting exhibits on the show floor. These events focus primarily on business-to-business (B2B) relationships. Moreover exhibition can mean to display of products or promotional material for the purposes of public relations, sales and/or marketing.

� Basically, there are two categories of exhibition

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Exhibitions

1. Trade Show, which exhibit of product and services targeted to a specific clientele and not open to the public. (B2B)

2. Consumer Show, on the other hands its target to the public and general.

3. Trade and Consumer Show

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Other events� Concerts of popular singers or

bands

� Special events, e.g. reception party,

themers dinner and talk show etc.

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Other events� Sport events, e.g. World Cup,

Olympic Games, ASIAN games etc.

� Other activities that attract a large group of people who are interested in the same thing traveling to participate these event/activities, e.g. Festivals, special occasion, etc.

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Target Group of MICE� Meetings, Incentives

= Corporate Meetings & Incentives

� Conventions / Congresses / Conference= Association Meetings

� Exhibitions= Exhibitors / Visitors / Organizers

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Johnn

A typology of business travel and tourism

John Swarbrookeand Susan Horner

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Definitions and Frameworks� Special events are that phenomenon arising from those

non-routine occasions which have leisure, culture, personal

or organizational objectives set apart from the normal

activity of daily life, whose purpose is to enlighten,

celebrate, entertain or challenge the experience of a group

of people.

Anton Shone, 2001

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Categories and Typologies

Anton Shone

Special Event

Cultural events(ceremonial, heritage)

Leisure events(leisure, sport, recreation)

Organizational events(commercial, Political, Sales

Personal events(Wedding, Birthday)

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The importance of MICE industry

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The significant of MICE industry� Employment in the industry and

economic contribution to local communities, provinces and the nation

� Direct foreign currencies earning from international participantrs daily expenditures on accommodations, food and beverage, souvenirs, etc.

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The significant of MICE industry� Stimulate the investment, both

from domestic and oversea investors.

� Invest in MICE facilities and Invest in other facilities, basic infrastructure and other industries.

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The significant of MICE industry� Stimulate domestic business firms to strengthen their

operational management by connecting or building their synergy with external & internal firms.

� New scientific & technological knowledge to develop the nation

� Create/build credibility, reputation & reliability of the hosts to local, national, regional and international levels

� Opportunities for relevant business, e.g. hotels. F&B, transportation, tour operators, etc.

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The significant of MICE industry

� The period of MICE events generally could enhance the tourism industry, during vMAY TO OCTOBERx is a off-peak period (low season) in most tourist destinations

� An average expenditure of MICE participants generally 3 times higher than the normal touristO 4,000 THB/day/person for oversea touristsO 8,000 THB/day/person for oversea MICE participants

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The benefits of business travel and tourism for destinations

Help justify andFund infrastructure Developments which

Benefits the host community

Help ensure viability of Community leisure facilities Such as shops and theatres, .

which are used by local people .as well as business tourist

Business tourists tend to be relatively well behaved,

causing few problems for the host community

Help ensure viability of Community leisure facilities Such as shops and theatres, .

which are used by local people .as well as business tourist

Tend to visit in off-peak season, in other words, generally not in the summer or school and public holidays

Relatively highPer head per

Day expenditure

Business tourism and Destinations

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NATIONAL MULTIPLE BENEFITS FROM MICE BUSINESS

� MICE business is one of a major sectors in tourismindustry which can bring more than

� 700,000 overseas tourists to Thailand. MICE touristsusually have more spending than

� leisure tourists. Therefore, MICE business can earn highincome and benefits to Thailand,

� both the ones which the value can be calculated andcannot be calculated in an exact

� amount of money. The benefits can be divided into 3levels as follows;

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Primary Benefits� These are direct interests from international meeting

and convention, international incentive travel andinternational trade fair / exhibition.

� The stakeholders gaining direct benefits are venues,organisers, PCOs, PEOs, DMCs, and Hotels.

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Secondary Benefits� These are related interests from international meeting and

convention, international incentive travel and internationaltrade fair / exhibition.

� The stakeholders gaining indirect benefits are Contractors,Freight Forwarders, Exhibitors, Restaurants &Entertainments, Tour Agents, Shopping Centers,Transportation & Communication, Banks and TemporaryStaff.

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Tertiary Benefits� These are multiple interests from international

meeting and convention, international incentivetravel and international trade fair / exhibition whichcannot be calculated in an exact amount of money.

� The stakeholder in this level is the country as a whole and benefits gained are Technology Transfer,International Trade and Positive Image, etc.

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The Impacts of MICE industry1. Economic Impacts

V$ก ���"(6���7 WXก*Y2. Social Impacts

V$ก ��Z��"(6��4#"5�3. Environmental Impacts

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Economic Impacts

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Social Impacts

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Environmental Impacts

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Technological Impacts� Advancing the use of information technology (IT) in holding

international MICE events, e.g. VDO & satellite conference,internet, digital & computer graphic, etc.

� The improvement and encouragement of technologicaldevelopment bringing-in by those exhibitors and participants

� Contribute these technologiesto other business sectorsresulting the improvementof their productivityand competitiveness

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Global Market of MICE industry

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The Market of MICE industries� Corporate initiators, e.g. internal,external and in/external

meeting of business sector� Non-corporate initiators, e.g. international governmental

organizations (GOrs), International Non-GovernmentalOrganizations (NGOrs)

1. International markets2. Regional markets3. Domestic markets

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Level of Meeting 1. International = 2 �T�bRc�^�2. Regional = �T�W�T�ก�� 2 ��PW�{bRc�^�3. National Offshore Meeting 4. Domestic

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Segmentation

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Global Market of MICE industry� Number of meetings analysed� The number of events per year in

the ICCA Association � Database has grown with more than

3000 events over the past 10 years.

Source: Statistics Report, The International Association

Meetings Market, International Congress and

Convention Association

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Number of meetings per continent� From 2003 to 2007, the percentage of meetings organised

in Europe dropped each year, from 58.0% in 2003 to55.1% in 2007.

� In 2008 Europers market share increased by 0.3% to55.4%.

� Asia & Middle East and North America are 2nd and 3rd with relatively stable market shares of respectively 18.6%and 11.4%.

� Latin Americars market share was 9.2% in 2008, which isthe highest of the past 10 years. Australiars market sharewas 3%. and Africars 2.5%.

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Number of meetings per country� As has been the case since 2004, U.S.A. and Germany

are the number one and two countries measured by thenumber of international meetings organised in 2008.

� The numbers 3 and 4: Spain and France had a considerable increase by amount of meetings comparedto 2007: 40 and 79 respectively.

� United Kingdom also had an increase of 40 in the amountof meetings, but dropped from 4th place in 2007 to 5th in2008.

� The Netherlands is a newcomer in the top 10 at the costof Austria.

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Number of meetings per city� For the first time in three years, Vienna shares the top

with Paris as the most popular city in 2008.� Barcelona on 3rd place had an increase of 30 meetings

over 2007. Singapore dropped one place to 4th and Berlindropped three places to 5th.

� Stockholm and Seoul are both newcomers in the top 10and climb in the rankings to 8th and 9th positionrespectively.

� Remarkable newcomers in the top 20 are Athens, BuenosAires, Sao Paulo and Tokyo.

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Favourite months, frequency and length� September remains the most popular month for

organising international association meetings,followed by June, October and May.

� Over 55% of all international association meetingsin 2008 were annual meetings, which is a decreaseof almost 4% compared to 2007.

� Over the last 10 years meetings became shorter;the average length of a meeting in 1999 was 4.4days and over the last three years it was 3.9 days.

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Venues used� Since 2005, vMeeting facilities in Hotelsx has taken

over as most popular type of venue to organise anevent from vConference/Exhibition Centresx.

� In 2008 the usage of meeting facilities in hotelsconsolidated its first place with 41.5%.

� Usage of Conference/Exhibition Centres lost another2.1% in 2008.

� The use of universities has risen more than twopercentage points and is now 19.2%.

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Subjects� Medical Science has been the most

occuring subject of international associationmeetings in the last 10 years.

� Technology, Science and Industry havebeen respectively second, third and fourthsince 2003.

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International Markets (Share%)

1002,9741002,6661003,151Total

383367384Africa

411561496179Australia/Pacific

514571777208South America

113211026212363North America

185301847115463Asia

601,780581,540591,854Europe

Market Share (%)

No. of EventMarket Share (%)

No. of Event

Market Share (%)

No. of Event

200220012000

Year

Continental

Source: International Congress and Convention Association (ICCA), Data, June 2003

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Association Meetings MarketNumber of meetings per country

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Association Meetings MarketNumber of meetings per country

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Association Meetings MarketNumber of meetings per city

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Domestic Market

51,724 9838,626 10112,297 71EastRegion

268,835 1,664 172,963 1,551 136,426 1,066Total

31,224 33127,216 32923,215 339South Region

20,095 12515,713 15913,362 113North Region

163,717 1,09190,158 95386,543 537Central Region

No. No. ParticipantsParticipants

No. No. EventEvent

No. No. ParticipantsParticipants

No. No. EventEvent

No. No. ParticipantsParticipants

No. No. EventEvent

200420042002200220012001

ProvinceProvince

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Discussion Questions1. Identify and review the factors that have lead to the

recognition of Thailand as an important conference and meeting destination.

2. Critically discuss the potential benefits that the convention and meeting sector provide to an economy.

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Discussion Questions3. Identify and explore the factors that have constrained the

growth of the international and domestic market for conventions and meetings in Thailand.

4. Discuss the importance of the National Strategy for the MICE Industry and subsequent government initiatives to the development of the industry.