MICE sector set for growth

Business tourism is on the rise, and regional initiatives are boosting the role of the Middle East as an expanding source market for the lucrative MICE sector. Kathi Everden reports

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By  Gemma Greenwood Published  September 21, 2006

If leisure tourism has traditionally been viewed as the glamorous side of the travel industry, the financial edge has always been weighted towards the corporate sector – with its higher rates and bigger margins. This business tourism sector generally comprises two major elements; individual executive travel, and mass movements for specific purposes that can include meetings, incentive travel reward programmes, conferences and exhibitions, or MICE as it is generally known. And, while many travel agents have spotted the potential of company travel accounts, upgrading their capabilities to provide dedicated corporate services, the MICE sector has been traditionally perceived as an inbound market within the region. Jordan, Egypt and Dubai have long been positioned as attractive destinations that can provide a venue for incentive travel programmes and product launches, generated by clients from Europe seeking sunshine along with that essential ‘wow’ factor. This has proved big business for some DMCs, but locally generated corporate incentive programmes have been thin on the ground in a region where a salary has always been viewed as the only required staff motivation. But as the region undergoes a sea change in terms of corporate culture, and more global companies set up offices in the Middle East, the trend to incentivise and reward staff and build loyalty through team-building days out, is on the rise. Together with a consequent expansion in business and government conference traffic, additional meeting facilities in both dedicated centres and new hotels, and a growing trend towards exhibitionism, the buoyant MICE scenario is one that regional agents can capitalise on in a bid to offset the law of diminishing returns in airline commissions. Already, players such as Dnata, Emirates Holidays, Alpha Tours, Sharaftravel, MMI and Al Tayer are dedicating staff or entire departments to serving these group movements, and the focus of country tourist boards and hotel groups on the MICE sector is another indication that there is serious money to be made from this business travel. Hoping to augment its buoyant leisure market from the region, the Malaysia Tourist Board is one organisation that has broadened its horizons and taken its hotels and agents on series of workshops around the Gulf to target MICE business, while South Africa’s Sun International is pitching for MICE traffic in Sun City and Cape Town and the Cyprus Tourist Organisation (CTO) has revitalised its activities in the region with a focus on meetings and incentives. According to Vassilis Theocharides, CTO director for the Middle East and Arabian Gulf, the aim is to attract leisure travellers, plus conferences, incentives, golfers and other sports tourists that can fill beds outside the peak summer months. “We can offer a good priced destination, particularly compared to European cities, and one that is competitive without being cheap,” he says. “Many businesses are now pan-Arab in their reach and we offer a convenient meeting place that is close-by with easy access, but is still an ‘overseas’ option.” By reaching out to the major travel agents in the Gulf, Theocharides says awareness of Cyprus as a MICE destination has grown and the results are seen in increased visitor numbers from the region during the first half of 2006. “Figures from Saudi Arabia are up more than 50%, 34% from Jordan and 10% from the UAE, and it is MICE that has kick-started this growth, with several big groups taking 500 rooms in March, for example.” And, while acknowledging the competitive edge of Asian countries such as Thailand and Malaysia, Theocharides says the efforts of their tourist boards would help in boosting MICE as a sector in the region. “We cannot compete head-to-head against these destinations as they offer a different experience, but the shorter travelling time [to Cyprus] is a plus point.” And, while short-haul journey times or value pricing has a role to play in the meeting and incentive sector, there is also potential for the pure reward trip, where suppliers can organise an all-expenses ‘holiday’ as a loyalty-building thank-you to a principal. The Travel Collection recently organised one such trip on behalf of a UAE company to Vienna, encompassing business class flights, horse-drawn carriage rides, a Mozart concert, private display of the famed Spanish horses, river cruise, visits to the Schonbrunn Castle and the Ferris Wheel at the Vienna amusement park, plus accommodation at the prestigious Hotel Sacher, for a small group of top executives. “The appeal of these trips is to include things that are exclusive, such as the private horse riding display,” explains managing director, Jacqueline Campbell. “The budget is not the issue.” Keep it local But, while outbound incentive travel trips are now venturing further afield – from South Africa and Eastern Europe to Australia – there is a huge market within the region, one that many hotels have been quick to latch on to. To a degree, this trend has been driven by two factors: one, that the principal corporate centres in Dubai and Saudi Arabia are not always the most attractive or practical places for meetings, team events and incentives, while, two, there is now a growing collection of hotels in less populated centres that are making determined efforts to tap in to business tourism. Salalah, the Dead Sea, Sharm-El-Sheikh, Doha or even the depths of the UAE desert dunes; resorts in these spots all offer varyingly competitive rates, a change of scenery, easy access, a range of facilities from spas to small break-out rooms, and a venue without urban distractions. Future developments are being carefully constructed with an eye on the high-value MICE market. The Port Ghalib project at Marsa Alam, south of Hurghada in Egypt, is preparing for launch next year as an integrated destination resort that can offer an ideal environment for business travel and tourism. “MICE was a key part of the masterplan as we will have two hotels with around 900 rooms as well as a 1500-capacity conference centre,” says James Pringle, chief executive director for developer, Al Kharafi. Leisure facilities on site will include a 1.5km private beach with offshore coral wall, the world’s third largest man-made lagoon pool at 12,000m², a 750-metre corniche with up to 150 shops and 22 restaurants and bars, plus a golf course, casino, a marina, souk, apartments and space for another three premium hotels within the first phase development. “The resort is large enough to hold group functions without imposing on other guests, and there is a full range of facilities from a 1000m² gym and spa over the sea, to team building opportunities in the desert and mountains, heli-rides and shark feeding expeditions,” he explains. With developments such as this, plus new multi-faceted hotels such as the Shangri-La Barr Al Jissah in Muscat; The Ritz-Carlton’s new resort and spa hotel, Al Sharq Village in Doha, Kempinski Ishtar at the Dead Sea in Jordan and Emirates Palace in Abu Dhabi, there is ample provision for glittering reward programme itineraries in the region. Meanwhile, more spectacular venues are wooing corporate events too, offering firms competitive rates and more than adequate facilities for everything from management retreats to product launches. In Fujairah, general manager of Le Meridien Al Aqah Beach, Patrick Antaki, says the resort has gained international recognition for hosting car launches, B2B exhibitions and small incentives. “New hotels will help drive business and we are already speaking about working together to pitch for bigger groups,” he says, adding that rates are up to 50% cheaper than in Dubai. It’s a similar story in Salalah, where the Hilton and Crowne Plaza have jointly created a niche product that serves a demand for exotic Arabia. “We are seeing demand from GCC companies who want to hold team-building weekends for example; they like the idea of having all their staff in one hotel, having control over the group but with the potential to get out and organise events,” says an InterContinental spokesman. Hilton confirms that Salalah is, to an extent, picking up the overspill from Dubai and Muscat: “The ace up our sleeves is that we can cater to conferences/product launches at short notice, unlike Dubai in particular,” reveals general manager, Steven van Copponelle. “And for groups up to 100, we can offer accommodation in the same hotel – not always possible elsewhere – and with package pricing that is real value for money.” For General Motors, the resort was a successful base for the regional launch of its new SUV last year, a production that involved bringing in lighting, AV and vehicles from Dubai. But it was one voted well worth it according to Saada Hammam, who is based at the company’s Middle East headquarters. “We do this type of thing two or three times a year and it’s a challenge to find an exciting option,” she says. “The destination has to be part of the success of the event, the place and hotel are integral.” For simpler corporate entertainment packages, events such as the Formula 1 motoring Grand Prix in Bahrain and the Dubai World Cup horse racing are now a fixture every spring, and, everywhere, there are a growing number of choices, from film festivals and cultural performances to sports days of every hue. For companies who cannot afford or do not wish to make such a big gesture, there is also potential for the ‘day out’, either for a family picnic or a team-building soft adventure in dune or lagoon. In the UAE, Desert Rangers has established a niche in this market, offering a variety of day and overnight trips including kayaking, raft-building, abseiling, dhow cruises, rock climbing, treasure hunts, dune buggy races and more. According to director, Mark Miller, clients who have used the company’s imaginative itineraries to date include Shell, Siemens, Adidas, Microsoft and Dubal. “There has been a huge amount of corporate business coming in from team building to sports days,” he says. “We are the only company in Dubai that is doing this and we can offer agents and operators the opportunity to buy our products for their clients.” Other DMCs experienced in catering to inbound incentives can be equally creative in their offerings, making the regional experience one that can compete in appeal with those further afield where much of the budget is spent on airfares. Gulf Ventures, for instance, has been creating incentive programmes since 1989, with recent events including the Lear jet jaunt from Dubai to Emirates Palace for lunch; a dhow flotilla up the creek at sunset, a two-centre trip with the Only & Only hotels in Dubai and the Maldives and an Estée Lauder management challenge in the desert. “To be different in Dubai, you now have to throw money at an incentive,” says manager, Mary Anne Boyers. “Hotels take up much of the budget.” Opting for city hotels that on average charge less than their beachside counterparts is one option, according to Wendy Pettifer of ADA Events, a staunch supporter of the region’s capabilities to wow, should budgets permit. “You can do a progressive dinner at the Emirates Golf Club, a day trip to Muscat including a coastal cruise and Omani themed dinner, or a desert island excursion in Abu Dhabi, with a surprise party,” she says. This experience in incentives and events is growing too, with a number of international specialists setting up regional offices as well as home-grown developments. Dnata’s World of Events has teamed up with London-based creative consultants, The Bank to set up a joint venture to provide event management, while motivation and incentive specialist, MCI, has recently opened an office in Dubai to serve the region from Turkey to the Indian subcontinent. Manager Sumaira Isaacs says one element of the new office would be educational: “Part of the development plan includes knowledge transfer to bring the region up to global levels.” Convention centre boom But, while these forms of corporate business are new targets for travel agents in the Middle East, one enormous sector is set to get even bigger. Across the region, vast conference and exhibition facilities are under construction as each country or emirate notes potential to attract both regional and global industry events and meetings. While honeypot venues such as Dubai have been top of the list for many organisers, new options are offering quieter locations and better value accommodation, with equally convenient air or road access. Jordan, for instance, claims a central place in the greater Middle East, and its King Hussein Al Talal Convention Centre at the Dead Sea has already scored big in global conventions, launching with the World Economic Forum. With capacity for 2350 delegates in one hall, a vast 5000m² terrace overlooking the Dead Sea and plans for more hotels to augment the Marriott, Mövenpick and Kempinski trio sited alongside – plus an easy transfer to Amman and its international airport – the centre is one of several attractive regional options. Bahrain too is open for business, with plans for a brand new exhibition and conference centre opening in 2009 due to be announced shortly, according to Debbie Stanford, director at the Bahrain Exhibition & Convention Bureau. “Our USP is that we are at the heart of the Gulf and the gateway to Saudi Arabia, and we attract business because of this,” she says. “We don’t see ourselves competing with Dubai as we cannot compare for mega events – but, we can market ourselves as a boutique destination.” As an added attraction, the first Banyan Tree resort opens this month in the desert at Al Areen in Bahrain, offering a unique retreat option for small meetings on the island. “We wanted to make a big splash in a smaller pool and chose Bahrain as a debut for our first hotel outside of Asia,” says general manager, Arno Nicolussi Moretto. “For any event held on the island, we would expect the top executives to stay with us, but we can host meetings for up to 200 plus or small exclusive boardroom conferences.” Already Bahrain has attracted attention from the international MICE sector by hosting BITE in May, a leisure and MICE event that brings in buyers from major markets such as Europe, South Africa and India. According to event organiser, Magnum Exhibitions, the general reaction from buyers was that Bahrain did not yet have sufficient hotel rooms for conference business, but there was potential for smaller meetings and incentives – and the island represented good value for money compared to other neighbouring destinations. Value pricing is expected to be one selling point for the new 440-room Al Hamra Palace Hotel in Ras Al Khaimah, scheduled to open next year with a 1000-delegate capacity conference room plus an auditorium and plans to add another string to the northern Gulf emirate’s ambitious development strategy. Meanwhile, up in Kuwait, Refad Hotels has two conference centres planned in its new Monarch Hotel and The Square at Capital Tower, adding new capacity in an emirate that is enjoying a resurgence in economic activity, and the business activities associated with that. In Qatar, where the focus is on niches, from MICE to sports, a blueprint has been drawn up to create a 2000-seat convention centre at Science City, complementing other infrastructure developments there such as the world’s largest covered sports dome and a new airport. Current soaring hotel rates and a shortage of accommodation in the run-up to the Asian Games in December spell short-term pain, but long term gain, with around 40 hotel projects underway. According to Daniela Grendene, director of marketing and communications, Qatar Tourist Authority, the Sheraton Doha continues to shine as a venue for meetings and events with its 3000-seat auditorium – host of the GCC summit – but there is growing demand for new facilities. “After the Games, the current exhibition centre is expected to be upgraded and the new convention centre should open at the end of 2007. Meanwhile, the Games themselves have given us experience in hosting a major event and this will be positive in boosting professional standards here,” she says. Despite strong competition, the UAE continues to boost its meeting and exhibition facilities, with Abu Dhabi announcing the opening of the first phase of a new 57,000m² complex early next year. In Dubai, plans stretch far and wide encompassing a 120,000m² exhibition centre forming the basis of Exhibition City near the Jebel Ali airport site: “Storage, office space, logistics amenities, air, road and rail links, two-, three- and four-star hotels and furnished apartments will all be part of the mix,” says Helal Saeed Khalfan Al Marri, director general, Dubai World Trade Centre. A new 15,000m² exhibition hall opening this winter at Dubai World Trade Centre will cater to short-term growth, while the whole site will be redeveloped after the opening of Exhibition City, specifically to cater to meetings and conventions.

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