10 Dec, 2007
EIBT Industry Report Rues Impact of “Age of Turbulence”
Macro, big-picture issues are becoming far greater sources of anxiety than micro trends within the meetings, incentives, conferences and exhibitions (MICE) industry, according to a research report presented at a trade show in Barcelona last month.
The annual report indicated that while industry issues like airline and hotel capacity, technology and costs were impacting on business, there is far greater concern about the consequences of “the age of turbulence” such as wars, terrorism, oil prices and currency fluctuations.
“One marked trend that has emerged in the past 12 months is the location of international meetings. What is becoming clear is that planners are choosing destinations closer to home, whether in the US or in Europe. This trend is almost certainly a result of on-going anxiety over the threat of terrorist activities and downward pressure on budgets,” says the report’s author, Rob Davidson, Senior Lecturer in Business Travel and Tourism, University of Westminster.
The report adds, “Despite their anxieties over increasing costs in the US, American planners clearly indicated that, for 2007, the impact of terrorism and war on business travel was their greatest concern, receiving a first, second or third place ranking from 38% of respondents in the Futurewatch survey.
“Behind terrorism and war (the principal concern), increasing costs were expected to have the greatest impact on the industry. The cost of oil and gas was expected to have the second-greatest impact, followed by general inflation.”
The report expressed concern over the impact of high oil prices on international business events as a result of the rising price of air travel and the threat of an economic slowdown. It said the deceleration in US housing prices would affect consumer confidence and also make “a number of advanced countries’ housing markets vulnerable to a correction.”
At the same time, currency fluctuations and the fall in the dollar’s value are expected to continue.
“Given the importance of the US market for inbound meetings and incentive travel to Europe, a continuing weak US dollar is likely to depress demand from that country, for Europe-based business events. In that case, the incidence of the type of ‘dollar-assured deals’ designed to transfer the risk caused by currency fluctuations may be expected to grow in the future.”
Barring these clouds, the report says, the MICE industry is doing better than ever with a never-ending flow of countries and cities deciding to position themselves as destinations for meetings and incentives and a continuing growth in the number of convention centres worldwide.
The report says, “Nowhere is the growth in infrastructural development more evident than in Asia and the Middle East, where new, world-class venues are set to open at an increasing pace over the next few years. China alone will add considerably to the 100+ conference facilities that have sprouted up in that country over the past three to four years.
“Also, in matured business destinations such as Hong Kong, Singapore and Australia there are enhancement works taking place to upgrade facilities and tourism products to encourage meetings and incentive planners to hold their events in these places.”
Two noteworthy new openings are the convention centre in Education City in Doha, Qatar, to be completed in 2008, projected be the largest convention centre in the Middle East, and the massive, multi-functional Beijing Olympic Green Convention Center, a part of the Olympics 2008 Games.
One major new trend is upgrading content of events, especially conferences and meetings. The report quotes one research survey finding as saying:
“No longer do people talk so much about a conference destination, the hotel they stayed in or the food they ate, unless of course they were bad. In the modern global village they take all these things for granted.
“No, what they talk about increasingly when they get home from a meeting is the content – what they have learned which will help them in their professional lives – and the contacts they have made and what these can lead to.
“With today’s pressures, no one actually wants to go to yet another meeting, however exotic the location, unless they are going to get something very concrete out of their hard earned time and money. There is a need for new meetings that bring value, both perceived and real, in terms of the education, motivation and opportunities for networking that they provide.”
Other key trends expected to impact on the outlook for meetings and incentives in all world regions in the year ahead are:
<> The growth in low-cost, long-haul airlines;
<> Green/environmental issues – creating pressure on individuals and organisations to travel less often or apply carbon offset for their travel;
<> Corporate social responsibility – encouraging use of destinations where they can contribute to the local area and population beneficially;
<> The growth in travel and trips being made from emerging markets; and
<> The change to US passport rules earlier this year – expected to result in more US citizens with passports and therefore a higher percentage finding it easier to travel outside North America.
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