The MICE trap

Extravagant resort hotels may make the headlines, but prosaic business tourism still represents the bread and butter of the hospitality sector in the Gulf. Kathi Everden looks at the many recent MICE developments in the region and explores prospects for future growth

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By  Kathi Everden Published  December 19, 2006

|~|Big-5-Trade-B.jpg|~||~|When Dubai determinedly set its sights on the tourist market a decade ago, embarking on a foray of fantastical hotel developments and attractions — later followed by most of its neighbours — there was no doubt that the good times were around the corner for the hospitality sector. But management at even the most leisure-oriented resorts know that a hotel cannot live life as one permanent holiday. For a profitable bottom line, there has to be a healthy mix of market segments, and this is where MICE are proliferating. Meetings, incentives, conferences and exhibitions (MICE), the group side of business travel, are on the increase throughout the region, spurred on by investment in the requisite infrastructure and associated software by government authorities in terms of venues and targeted marketing and promotion. The plans are staggering in their scope, and are truly regional, as every state seeks to add a trade centre complex of one dimension or another. Dubai, true to form, has evolved one of the largest with Exhibition City at the World Central Jebel Ali project, a 120,000m² centre comprising hotels, apartments, storage, offices, airport and rail links and a massive exhibition venue, due for completion in 2009. Purpose-built to cater to large-scale exhibitions and trade shows, both consumer and trade, developer, the Dubai World Trade Centre (DWTC) is confident it will become an unrivalled hub and one of a kind in the MICE world. According to director general, Helal Saeed Al Marri, there will be no other venue like it in the world: “While we have taken components from a variety of locations, on a macro level there is no comparison, and we have built in flexibility to ensure we are not limited in any way for future growth,” he says. Al Marri says that while the current DWTC complex and Airport Expo will continue to host shows, there will be clearer segmentation, with consumer events that expect greater traffic taking place at the Dubai Exhibition City (DEC) complex.||**|||~|Bahrain_wtc-B.jpg|~||~|“In future, the Dubai International Convention and Exhibition Centre might be the more prestigious venue for specialised shows, while generic exhibitions can grow at the DEC, where the transport links will make it easier for consumers to visit.” In addition, the area around DWTC will be developed, retaining the existing conference centre and some of the halls but adding in more flexible space specifically designed with facilities geared towards corporate training, regional conferences and other specialised niches. Current capacity at DWTC is approximately 6000 in each hall, but Al Marri says the new complex could cater to meetings of 15,000 with the addition of extra rooms that could host between 500 and 1000 visitors. “No expense will be spared to ensure this is the most functional such complex globally,” he says. “Big conventions are a small part of the conference agenda and break-out rooms for between 100 and 2500 are more in demand than the larger spaces that we already have.” In another move that will boost the exhibition and conference sector, Al Marri says DWTC will operate an open door policy for organisers, doing away with the sector protection policies of the past and encouraging more international involvement. This proactive stance is echoed in Abu Dhabi, where authorities have joined forces with several major show organisers in a bid to fill the new halls currently under construction at conferencing venues around the emirate. Concurrent building works encompass a 57,000 m² exhibition showcase at the heart of Abu Dhabi’s Capital Centre, another multi-use arena with hotels, offices, retail and entertainment outlets and waterfront. And it is the same story around the Gulf: Ras Al Khaimah’s development plans include a MICE-oriented hotel, the Al Hamra Palace, as well as a conference centre in its Gateway project, while Oman tourism authorities have promised a dedicated conference and hotel project will be built in Muscat. Bahrain, perceiving potential to develop business as the gateway to the northern Gulf, has a new conference and exhibition centre, which is currently in the planning stages, with 60,000m² of space to cater to larger events. “We are seeing an overspill from Dubai and need more conference facilities in order to can bid for bigger events,” says Debbie Stanford, marketing head of the Bahrain Exhibition and Conference Bureau. Likewise, Qatar has its eye on MICE business and as part of its overall infrastructure development has a new conference auditorium set to open next year in the Qatar Foundation complex. This will be followed by the redevelopment of the existing Qatar National Exhibition Centre within the next 12 to 24 months. In Egypt, developments are also underway. Cairo’s exhibition and convention centre is being turned over to an international management companynext year, at which point a commercially-tuned convention bureau is expected to come in to the picture. Meanwhile, Port Ghalib’s dedicated conference centre and resort, operated by Sun International, will add a further dimension to Egypt’s overall MICE product. As well as all these meeting rooms, there are dozens of hotels also on the drawing board throughout the GCC, all of which will include ballrooms and boardrooms, adding to the huge rise in capacity that will occur on a regional level over the next three years. Filling all this space with MICE visitors will be a joint venture between the individual hotels and their respective tourist boards and convention bureau and, in several of the region’s smaller MICE destinations, hoteliers are taking a proactive route to establish their own niche in global markets. At the Dead Sea in Jordan, for instance, with just three big-brand players — Movenpick, Marriott and Kempinski — the hotels’ management have teamed up, coming together with the shared goal of positioning their properties, and the adjacent convention centre, as a MICE hub.||**|||~||~||~|According to general manager for the Jordan Valley Movenpick, Bruno Huber, to grow the destination as a venue for conventions, the three companies are working together to produce a ‘bid book’, focusing on technical information for conference organisers, with just 10% of its column inches devoted to the promotion of the individual hotels. “We need to start with a branding exercise and complement this with a ‘ready to buy’ product, backed up by a destination team,” he says. “Clients are not yet looking favourably on Jordan as a convention centre, but organisers need to put more than one destination to a client and what we are asking is that they put us in as one option to get it in the frame,” adds Marriott’s regional sales and marketing director, Jan Heesbeen. In a similar vein, Fujairah’s new hotels are already talking group sales in a bid to boost the destination as a venue for smaller meetings, alongside its established leisure role. Le Meridien Al Aqah Beach Resort in Fujairah has ploughed a lonely furrow for nearly four years now, and has succeeded in attracting both regional and international groups, but with new neighbours the Rotana, Iberotel and JAL opening in 2007, co-operation has been established early to pitch for more corporate business. “We have one of the largest ballrooms in the region and can take conferences and corporate meetings, but we don’t have the rooms to match,” says Le Meridien Al Aqah’s general manager, Patrick Antaki. “Working together will benefit us all.” According to Daniel Hajjar, vice president of sales and marketing for Rotana, the new hotel influx gives the emirate mass credibility. “We are promoting MICE, but the challenge is the destination image, since destination marketing plays a key role and hotels are having to take up this role too.” The possibility of a joint ‘bid book’ for Fujairah has been discussed too, and here Hajjar says that the first hotels could set the standard, obliging newcomers in the future to join in the process. If start-up destinations are propelled in to self-help promotion and co-operation in order to trap their MICE business, however, hotels in the honeypot venues such as Dubai can also pick up a few tips to help sustain the good times. Event specialist MVM established an office in Dubai a year ago in order to capitalise on the emirate’s central location between Europe and Asia, but director Kate Bowery has noted distinct operational difficulties due in most part to the city’s success. “Operators here are no longer hungry for business and the shortage of hotel rooms and high rates are another challenge,” she says, contrasting this with the situation in Oman where, she says, local destination management companies (DMCs) are “willing to go the extra mile”. Thinking outside the box about ways in which to differentiate the Dubai product is one way Bowery sees of bringing back incentive and conference business in particular. “Adding in a team-building element can add a differential for those who have been here before and done the dune dinner and dhow options,” she suggests. “Dubai has almost costed itself out of the equation with rates that are equivalent to Paris, for instance, and it has become very hard to entice groups to come here, particularly from the region.” Hotels have been able to justify these rocketing rates due to the staggering levels of demand that has been seen from all industry sectors thus far. For MICE organisers it has made the bid process all the more difficult, however, with most of the budget now going to cover accommodation and leaving little over for the frills that distinguish an individual event. “For an incentive to be different, you have to throw money at it and now hotels take up the budget,” says business development manager for Gulf Ventures, Richard Hawkins. “If a client wants beach, executive club rooms or whatever, then they have to cut back somewhere else.” For big businesses, organising conventions with delegate numbers in the thousands that are booked out several years in advance, the excessive and ever-rising room rates makes forward planning especially difficult. Pitching a bid for those association entails offering a range of accommodation and projected prices, a process that cannot simply be satisfied by taking estimated projections that take the current rate and add 15% a year for every year until the event takes place, a scenario initially faced by the Dubai Convention Bureau (DCB). Flexibility with rates and co-operative working practices will all help when the going gets tougher — DWTC’s congress management division, for instance, has recently set up a hotel booking service to secure accommodation for visitors during the emirate’s busiest periods, a move that was not easily accomplished, according to the organisation’s general manager-commercial, Christina Anthony. “We have had to work hard to establish relationships with hotels in order to achieve firm allocations, and this has been a difficult process given that occupancies can run at more than 90% for many months of the year.” However, when doors open to the massive influx of rooms currently under construction in Dubai, and elsewhere in the region, those with such agreements in place may pat themselves on the back for their long-sighted management strategies.||**||

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