19 Feb, 2001
Thais Plan Convention Bureau, But Remain Unclear About Its Role
After some initial hesitation and, indeed, suspicion, the Thai travel & tourism industry is warming to the setting up of a convention and exhibition bureau solely to market the country’s growing range of opportunities in this lucrative sector of the travel business.
However, backers of the bureau still need to convince the Thai cabinet to cough up an estimated 220 million baht, while the private sector is waiting to see how it will be structured and managed.
Last week, the Tourism Authority of Thailand’s deputy governor for administration, Mrs Juthamas Siriwan, held what was referred to as “a public hearing” to brief the industry on the bureau and get some feedback on its plans, operations and structure.
The bureau’s primary purpose will be to bring more meetings, incentives, conventions and exhibitions (MICE) to Thailand. MICE delegates are a much sought-after segment of the travel business because most are on company accounts and hence spend more money than regular visitors. Many later return on private holidays with their families.
In addition to the many hotels with extensive space for Mice events, Thailand recently has seen the emergence of convention and exhibition centres like the Bangkok International Trade and Exhibition Centre (BITEC), Impact Muang Thong Thani complex and the Pattaya Exhibition and Convention Hall (PEACH). This has meant plenty of surplus space to sell.
The country’s recovering economy plus its increasing trade and infrastructure links with the neighbouring countries of the Greater Mekong Subregion, especially Cambodia and Laos, are opening up further opportunities for industry and investment, a harbinger of the MICE business. At the other end, strong competition has arisen from Singapore, Malaysia and the Philippines, all of which boast equally huge convention centres, as do Australia, New Zealand and Hong Kong.
In principle, the Thai travel industry agrees that Thailand should have a Mice promotion bureau to ensure that it can meet the competition and not lose market-share. The private sector feels that as long as it does not have to fund the new bureau, there is no reason not to back it.
The existing MICE-promotion body, the Thailand Incentive and Convention Association (TICA), is half-funded by the private sector, the other half by the Tourism Authority of Thailand and THAI Airways International. But TICA’s budget is only about 12 million baht while the new bureau is projected to need 220 million baht.
The TAT’s board of directors has approved formation of the bureau “in principle”. After last week’s hearing, Mrs Juthamas is in a position to claim that the private sector, too, backs it. The next step is to win additional support from other trade and industry organisations, plus government agencies before sending the entire package to the Cabinet.
After the new bureau is formed, TICA will become just another trade body to represent the interests of the Mice sector. It will lose its marketing powers as well as the matching fund provided by the TAT for its operations.
Legally, the bureau will be registered as a ‘juristic person’ with some kind of a special status under the government. It has not been clarified under which government agency it will come under, but backers of the bureau seem not to want it under the TAT.
The main question is what will happen to the TAT’s Convention Promotion Division. Mrs Juthamas has indicated that this unit may be transferred out of the TAT, and its functions (along with the budget, naturally) be turned over to the new bureau. This will mean that the Cabinet will have to approve no extra funds, just divert the money from the TAT. For obvious reasons, the TAT does not like this idea.
As for the TAT’s convention division staff, initial indications are that, if they want to move, they will have to re-apply for jobs at the new bureau, or simply stay on at the TAT and be transferred to other departments.
Privately, many in the industry are questioning how it will be run. Mrs Juthamas appears to be wanting to head the bureau but some private sector executives say she will need the support of a high-profile marketing personality with the clout and connections in the specialised and highly-competitive MICE business.
Mrs Juthamas herself does not have a marketing background and never served at a TAT office abroad. At the TAT, she rose through the development side of the agency and oversaw the tourism job-creation programme under the money allocated by the Miyazawa Fund to alleviate the social-impact of the recent economic crisis. In 1999, she lost a controversial bid to become TAT governor.
With the new Cabinet line-up featuring three heavyweight former TAT chairmen, the bureau is expected to sail through. One of Thaksin Shinawatra’s companies is also part-owner of NCC Management and Development, operator of the Queen Sirikit convention centre.
Even without a bureau, the Thai MICE business is not doing badly. In Jan-October 2000, convention delegates to Thailand totalled 70,436, up 18.66% over the same period of 1999. Some of the largest source-markets for convention delegates are Singapore, Hong Kong, Malaysia and Australia, all of which have reported big increases.
The existing convention and exhibition centres are working with the TAT and THAI to bring in more business. Last year saw a number of high-powered meetings like the UNCTAD X conference and the Asian Development Bank Board of Governors conference.
Former foreign minister Surin Pitsuwan also came up with the idea of promoting Bangkok as the Geneva of Asia, to capitalise on the city’s existing lock on the UN business through the Economic and Social Commission for Asia-Pacific. This market alone is expected to yield big dividends, especially now that the US is beginning to pay its arrear dues to the UN.
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