03 Jul 2012
The Thailand Convention and Exhibition Bureau (TCEB) in cooperation with the Asian Federation for Exhibition and Convention Associations (AFECA) and the US-based International Association of Exhibitions and Events (IAEE) held the inaugural Thailand MICE International Forum (TMIF) 2012 in Bangkok on 21 June 2012 at the Sofitel Sukhumvit hotel in Bangkok.
Addressing the theme, “Connecting Asia, Connecting Success,” over 450 attendees from over 21 countries heard the latest insights, trends and forecasts pertaining to the present and future of the MICE industry in Asia.
The objective of the forum was to both enhance the appreciation among Thailand’s MICE operators of the importance and potential of the regional MICE industry and to highlight Thailand’s capabilities and readiness as a gateway to the regional MICE market in Asia
International perspectives on Thailand’s and Asia’s MICE challenges and opportunities were addressed by a highly experienced mix of MICE professionals.
Top Level Political Support
Giving the official opening address, Deputy Prime Minister of Thailand, Mr Chumpol SILAPA-ARCHA told the audience that MICE is on the national development agenda in Thailand. “Our policy puts high priority on the MICE industry as an engine of economic growth”.
With ASEAN Economic Community (AEC) planned by 2015, trade, investment, manpower and capital will flow much more freely within the region and MICE will be a key sector.
The Deputy PM told the audience that Thailand is positioned to play a strategic role in the future of MICE events in Asean due the country’s location, benefits and the privileges that it offers to business event organizers.
In his welcome address, Mr Edward Liu, President of the Asian Federation of Exhibition and Convention Associations (AFECA) disclosed that TCEB, the Thailand Incentive and Convention Association (TICA) and the Thai Exhibition Association (TEA) should be commended for organising the inaugural TMIF in light of the Euro zone crisis.
With MICE experts from USA, Singapore, Taiwan, Hong Kong, Indonesia, Germany, Thailand and other countries addressing TMIF, Mr Liu said that he was confident that public servants will be better informed after the forum.
Ms Doreen Beila, Chairperson of the International Association of Exhibitions and Events (IAEE) said that her main objective was to advocate the value of exhibitions and events to create demand for events in the USA and to ease any difficulties over visas.
“The “Click Here First” initiative on clickherefirst.org was working well as a vehicle to promote face to face meetings.” She said that IAEE was supportive of bringing Americans to Asia to hold events. She noted that 60% of all trade shows in the United States are organized either by trade associations (such as the poultry industry etc) and professional societies – such as those for accountants and doctors.
Thongchai Sridama, Acting President of the Thailand Convention and Exhibition Bureau or TCEB, told the audience that TMIF would promote Thailand and that TCEB wants to work with all sectors that are MICE relevant. TMIF will be a platform for participants to explore and discuss opportunities for growth.
Keynote: Asean Economic Community - Double Impact
In the TMIF keynote address, Mr Phongsak Assakul, Chairman of the Thai Chamber of Commerce and the Board of Trade of Thailand, addressed the theme, “Asean Economic Community (AEC): Double Impact on the Economic Development and MICE Industry.”
As Asean moves toward making national boundaries less important and boosting the free flow of trade, goods, capital, labour and services, Mr Phongsak told the audience not to just look at the bright side of AEC. He said that businesses need to be more effective or they would run the risk of obliteration. He warned that low quality goods may now enter the market and that there may be a brain drain in areas of medical and engineering services to areas of Asean that pay higher salaries.
Intra-Asean trade will move from around 25% to 40 to 50%. “Painful as it maybe, the majority of Thai businesses are not prepared for AEC. Only a minority are getting ready,” said Phongsak.
He warned that Thailand needs to add value to its products and services. It could do this by product and service innovation, human resource development, improving quality and standards and building Asean market intelligence.
For SMEs wishing to capitalise on AEC, they need to focus on consumer behaviour in ASEAN and capitalise on the flexibility that comes from being small. SMEs need to thoroughly understand their customers.
He said that the public and private sectors need to create closer partnerships to fully realise the potential of AEC.
Future Trends of the MICE Industry in Asia
In the session, “Development and Future Trends of the MICE Industry in Asia,” Marisa D Nallana, Chairman of the Philippine Association of Convention and Exhibition Organizers and Suppliers (PACEOS) told the audience that the 2009 Tourism Act and Development Plan was a very good platform for the Philippines to improve market access, tourism governance and human resource. Eight development areas in the Philippines are currently benefitting from the Act, she said.
The Philippine MICE Academy and the creation of local MICE associations in each city was key to continued MICE industry growth, she said.
From Taiwan, Ms Kitty Wong, Vice President of the Taiwan Exhibition and Convention Association (TECA), said that the MICE sector in Taiwan was under the control of the Foreign Trade Bureau. She told the audience that Taiwan’s MICE industry had rebuffed political demands for it to hold mega events. The industry was much more interested in holding an increased number of smaller more frequent and profitable events.
She said the maximum size event in Taipei could be one with 5,000 people, but that 2,000 to 3,000 were preferable.
Ms Wong further disclosed that the MICE industry in Taiwan was characterised by systematic efforts to professionalise the industry through certification and training programmes. There is a trend towards more social media and mobile apps and green benchmarking of carbon footprints for events, she noted. In addition, there are strong government incentive and motivational programmes to encourage organisers.
As a consequence, Taipei does very well for association meetings. In 2011, Taipei only ranked behind Singapore, Beijing and Seoul in terms of the number of association events held.
From Indonesia, Mr Iqbal Alan Abdullah, Chairman of the Indonesia Congress and Convention Association (INCCA) told the audience that the MICE industry in Indonesia was also doing well. He said this was due to investment growth of 6.9% and GDP growth estimated to be between 6.7% and 7.4% for 2011.
The MICE sector in Indonesia is built around 15 favoured MICE destinations and a commitment to transparent bidding processes. With a popular of 200 million, Mr Iqbal told the audience that Indonesia’s MICE potential is massive, increasingly resistant to crisis, is high yield, but only mid-sized in terms of number of pax per event. He said the sector was creating a wide range of job opportunities.
From Thailand, Mr Sumate Sudasna, President of the Thailand Incentive and Convention Association (TICA) told the TMIF audience that tourism is the “most perishable product in the world.” Nevertheless, UNWTO figures show that Thailand is now ranked 11th globally in terms of tourism receipts.
Mr Sumate said that the aim, after various national crises in Thailand, was to keep the MICE industry “stable and sustainable.” The TICA President noted that the MICE sector is responsible for about 6% of total international arrivals, with meetings and incentives being the strongest sub-sector.
He cited new markets as Eastern Europe, US, Brazil, Russia, India and China. The trend is towards green tourism and corporate social responsibility as well as free WiFi and constant connectivity. Mr Sumate said that in terms of free WiFi, Asian and Thai venues tended to offer such services more frequently than venues in Europe.
The session moderator, Ms Janet Tan-Collis, CEO of East-West Executive Travel, thanked the panel for their overview.
The Resiliency of B2B
One of the issues facing the exhibition industry has been the extent to which it has been threatened as a marketing medium due to digital developments and economic doldrums in the United States. In a session called “The Resiliency of Business to Business Exhibitions,” Ms Cathy Breeden, Chief Operating Officer for the International Association of Exhibitions and Events, told the audience that research from the Center for Exhibition Industry Research (CEIR) indicated that the business event industry is healthy and will continue to grow in the near term.
The period 2011-2012 had shown positive growth in exhibitions in America. There has been seven quarters of continuous growth. However, people are still cautious due to the Euro zone crisis and the US elections this year, said Ms Breeden.
The American economic crisis of 2008 has taken its toll. Ms Breeden said that IAEE economists are still forecasting that the MICE industry in the United States won’t rebound to pre-2008 levels until at least 2015.
Furthermore, CEIR research indicates that over the next few years exhibitors will purchase the same amount of booth space. There will be no increases. And it is likely that exhibitors will simply refurbish existing booths instead of buying new displays and furniture.
Ms Breeden reported that CEIR studies suggest that face to face will remain popular (even in a digital age) due to the primacy of face to face sales meetings. At the same time, hosted buyer programs are becoming more popular.
Recent CEIR surveys have underlined the importance of exhibition staffs’ behavioural characteristics and training. In surveys, attendees say that exhibitor staff need to be (in order of priority) knowledgeable about the product, service or solution, willing to provide information, credible, believable, knowledgeable about costs, willing to solve problems, not be pushy or aggressive, have technical experience, be friendly and have industry experience and good presentation skills.
Ms Breeden concluded that an intensive knowledge and a broad range of skills are needed by exhibitor personnel. Accordingly, she noted a new trend to more intensive exhibitor training in order to maximize results in a competitive business event environment.
The Impact of Asean Integration on Exhibitions
A large measure of Asean economic integration known as Asean Economic Community (AEC) is scheduled for 2015 among the 10 main countries of Southeast Asia. How will this impact the exhibition industry?
Mr Edward Liu, President of the Asian Federation of Exhibition and Convention Associations, told the audience in his presentation, “Trends of the Asian Exhibition Industry Beyond Asean Economic Community 2015,” that in the MICE sector it seemed to be Thailand that was most focused on AEC opportunities and challenges.
With a single market of 600 million people and per capita average income of around US$3,106 and growing, Asean offered huge potential, said Mr Liu. Specifically, while Cambodia, Laos, Myanmar and Vietnam (CLMV) have 28% of Asean’s population, they only have 13% of its GDP. Therefore that’s where the real potential for business growth is, he said.
Mr Liu added that it was likely that intra-Asean trade would grow from around 25% now to 40-50% by 2015. The market share of the EU, Japan and the United States was dropping as Asean increasingly starts to trade with itself and with China.
The key to where new exhibition opportunities lie depend on a given country in Asean having a critical mass of manufacturers to run an exhibition. Asean countries’ main exports and imports are electronics, integrated circuits, micro assemblies, petroleum products, oil (not crude), petroleum gasses, computer parts, office machines, palm oil and rubber. These are the sectors where there is most exhibition potential.
Looking to AEC in 2015, Mr Liu told the TMIF audience that AEC would be based on the principles of no restrictions, no barriers, no hindrances. It would be similar to Europe’s common market.
Specifically, AEC is predicated on a strategic policy platform comprising:
* total elimination of non tariff as well as tariff barriers to intra Asean trade
* promotion of transparency of all actions in international trade transactions
* simplification, harmonization, standardisation and automation of customs processes
* adoption of standardized customs transactions
* reduction or elimination of investment restrictions
* harmonization of capital market standards
* implementation of Asean visas
* implementation of regional measures to extend connectivity and access between Asean countries via high speed networks
* harmonisation of legal infrastructure for e-commerce
The aim is to achieve a tariff free zone for all products and services in Asean, greater investment opportunities and seamless customs, processes and transactions, said Mr Liu.
As a consequence of Euro zone economic difficulties, a new wave of European event organizers are now moving into Asia. China’s exhibition market is fairly saturated, said Mr Liu. Therefore, mergers and acquisitions are being used to get fast entry into the Asean market place of 600 million people, which, as a bloc, is expected to average 6% GDP growth in 2012.
Mr Liu predicted that beyond 2015, Asean, China and India will become the major regions for the staging of international trade shows and exhibitions. Japan, Korea and Taiwan will also attract more local and global organisers. Korea, for example, is still looking for more partners to internationalise its events.
The AFECA President also forecasted that:
* In Asean, Indonesia is likely to be the new battlefield among local organisers, more established foreign players and the new entrants
* Another major player will be Thailand with its vast market and world class infrastructure
* With its new tourism and MICE positioning, Singapore will attract new event organisers from the United States
* Vietnam and Philippines will draw more interest after 2015
* Singapore, Malaysia, Thailand and Indonesia will stay at the forefront of the MICE sector.
However, Mr Liu warned that as many organisers are unable to compete with foreign counterparts in terms of expertise, resources and market connectivity, many are likely to face challenges or extinction in the years to come. Therefore strategic partnerships are vital.
In summary, the AFECA President said that he believed that companies such as Reed Tradex, GL, UMB, Messe Berlin and Messe Frankfurt, would continue to enter and dominate the Asian exhibition industry.
They will be attracted to Asean because AEC will transform Southeast Asia into an economic powerhouse. The region needs to facilitate more mergers and acquisitions. “We are in a very good position, but we must prepare ourselves,” he said.
Mr Liu concluded his presentation with the simple statement: “The Asean region is the future.”
Managing Business Challenges
Moving to very much a session based on private experience and realities on the ground, four experts debated, “Managing Business Challenges and Opportunities Beyond AEC Integration.”
Mr Sarnit Karunyavanij, the Business Development Director of Bangkok International Trade & Exhibition Centre, told the audience that, for perspective, the whole of Asean currently has an economy equivalent in size to that of Germany’s economy.
He said that there were indications that in 2015 and beyond, skilled labour would move more to Singapore and Malaysia, where salaries are higher.
Mr Sarnit said that Asean was increasingly defined by four realities: the growth of intra-regional tourism, the existence of the largest Muslim population bloc in the world, a growing middle income economic class, and an aging population.
If Asean is to do well, it needs to leverage core competencies, such as health care, food processing and integrated infrastructure and transport networks, not just telecoms, said Mr Sarnit. Physical north-south transport links with China will be increasingly important.
Mr M Gandhi, Managing Director (Asean Business) of UBM Asia (Thailand) told the audience that his company was now heavily focused on Asean growth with offices in six Asean countries. UBM would grow through three strategies: launching new events, acquisition and partnership with existing players, and new joint ventures.
The same strategic approach of new events, partnerships, investment and acquisitions is being followed by VNU Exhibitions, Asia Pacific. The company’s Managing Director, Mr Gerard Leeuwenburgh said that such a strategy by VNU would help its partners to professionalize their events and services.
There are significant exhibition industry changes underway. Mr Gandhi said modern exhibition organizers increasingly have to understand the metrics -- the return that their customers are getting. Specialization is also increasing.
But, being Asia, relationships with government bodies are still vital. Governments may support an event organizer based on the metrics and expected outcomes. Other times, “It’s because they like you,” said Mr Gandhi.
Culturally, event organizers have to understand the nuances of each country and market. Flexibility is key. Mr Gandhi said that UBM’s show at BITEC in Bangkok dedicated to environmental technology has evolved over six years to be show more focused on renewable energy, with environmental technology now less important. Be responsive to, and facilitate, such evolutionary change, he said.
Willingness to take risks and sometimes fail is also important, said Mr Gandhi.
Myanmar has been at the forefront of international attention recently. However, Dr Andrew Kay, Managing Director of CP Exhibition – China Promotion Ltd of Hong Kong, said that exhibition space in Myanmar is small (the biggest hall is 2,500 sqm), with land prices and costs rising fast. While more associations and private enterprises are emerging in Myanmar, Dr Kay suggested that, mostly for cost reasons, the country would remain a “difficult market” for some time.
Having a small show strategy for Myanmar could still work, said Mr Leeuwenburgh. Small shows often have a desirable spin off -- or feeder effect -- on the organizer’s larger regional show, where they can make money.
Regional shows in Asean with critical mass have a good future. It is likely that clients in Europe will come to Asean for one regional show a year. The panellists agreed that Singapore, Thailand and Malaysia are the preferred regional show bases within Asean. Indonesia, despite its size, was not yet close to its regional show potential.
Mr Edward Liu, the AFECA President, said that an event can grow to become a mega show over time providing that there is sufficient demand from the market that the event serves. “You can hold the event anywhere, as long as you get good enough buyers to attend,” he said.
Citing the sample of the Singapore Air Show, Mr Liu said it was vital that strategic planning takes place first and that a new mega show is backed up by a slew of government policies such as tax free support for exhibitors and relevant industries.
Mr Leeuwenburgh emphasized the need for government support. For example, policies in Thailand (via TCEB) and in Singapore, he said, motivate newcomers to invest and attend shows. “You need government support,” he said. “The openness in these countries to cooperate with private operators is very good. They can see the benefits.”
Accordingly, Mr Leeuwenburgh said Europeans would continue to invest in Asean events because it is a transparent market with a lot of development and growth. While Europe may have certain professional standards, many shows there are downsizing, with organizers having to work harder each year to maintain a show’s position. “It’s logical for Europeans to move to Asia to add value,” he said.
Mr Gandhi echoed the sentiment. “I’d rather put my money in Asia now where the potential is significantly higher.”
However, he cautioned that for AEC to work “barriers in the mind” have to go first. “Only then will AEC work,” he warned.
As an example, Mr Gandhi said that pharmaceutical associations in Asean didn’t really talk to each other. If an event organizer can broker partnership between the associations, the potential for a regional show could be realized.
Dr Kay agreed that having 10 countries coming together would create huge bargaining power and economies of scale.
Mr Leeuwenburgh said that forums such as TMIF needed to be followed up. Educational aspects need to be included as human resource capabilities are a huge challenge.
The panellists admitted to being slightly worried about demographic trends in events. Visitor age is rising. Younger people are not attending events. Exhibitions need to start attracting young people. We can’t take exhibitions for granted, said the VNU Managing Director.
Mr Gandhi said that being close to your visitor is very important. “Listen to them and understand what they want...Face to face will never go -- even if you’re young or old. Keep your events relevant to all generations.”