The Meeting Incentives Conferences and Exhibitions (MICE) industry has shown a growth trajectory across the globe. Corporates from all sectors are more than willing to shell out the extra money required to travel out of their home space to host an event in a destination that offers state of the art facilities, new experiences and the added value of travel. India, never far behind in developing products to keep pace with the world, has been hard at work building the necessary infrastructure to cater to this burgeoning segment. Their efforts have borne fruit and the domestic movement in the MICE segment has been trudging upwards in the last few years. According to International Congress and Convention Association (ICCA), India holds the 35th position in global ranking and 9th position in the Asia Pacific region and hosted 116 global business events in 2014.
Rajiv Duggal, Senior Vice President – Tourism, Hospitality & Leisure, Lavasa Corporation, opined that international travel for MICE has been at the front row for the last five years, especially travel to the Middle East, South East Asia and Europe, and driven largely by Incentive travel and not real time MICE. However, the ban on international travel by certain companies has led to a domestic MICE movement boom in the recent past.
“The MICE movements of larger groups are now domestic, and the industry is benefiting from it. We have seen a growth of almost 25-30 per cent in MICE over the years. Lavasa, for instance, saw 189 days of conferencing in 2014, and expects to cross 200 in 2015,” said Duggal.
Rajeev Jalnapurkar, CEO, Ramoji Film City opined that, today, the MICE segment has emerged as a significant component of growth in tourism, several corporate have been looking for perfect venues which can provide holistic experience. Since years, corporate India has been looking for finest conferencing facilities while blending business with entertainment. “Now there is a growing trend among corporates for locations away from city environs, finest conferencing facilities and options for relaxation and entertainment. If it is a one-stop solution for the business, recreation and has the ability to churn out a true variety of thematic events – then there is nothing like it,” he added.
Hotels accommodate MICE
Recognising the financial contribution of MICE in overall revenue, hotels made the effort at the beginning of the revolution to add inventory to suit the industry, thus enhancing the country’s infrastructure offering. India was (and to an extent still is) otherwise plagued with a lack of infrastructure, especially in way of convention centres. And this was not limited to the challenge of a small number of convention centres, but extended to the facilities that did not bring them at par with international counterparts.
Hotels, ever the epitome of cleanliness, exemplary service, latest technology, and the added advantage of room inventory to support the numbers that visited for MICE, thus had a great advantage in catering to the space. Fortunately for India, they leveraged this advantage to put India on the MICE map to a great extent. A spokesperson of the Taj Hotels Resorts and Palaces called the MICE industry in India one of the strongest segments within the travel and hospitality sphere and shown the most consistent growth rates over the last four to five years.
“MICE is a key segment which puts India as a important destination on the global map. It is not only inbound but also very strong in domestic market. As demand for MICE is growing in India we are expecting the demand to steadily outpace the increase in supply and that will help Gurgaon to develop into one of the strongest MICE city in the country,” opined Shuvendu Banerjee , Director Sales and Marketing, Crowne Plaza Today Gurgaon.
According to Shashi Razdan, Director of Sales & Marketing – South Asia, Golden Tulip Hotels & Resorts, industry is realising the importance of the MICE and India is increasingly on the rise of being the preferred destination for MICE travelers in India as it offers a work cum pleasure experience. “The 2014 EIBTM Trends Watch Report shares the positive sentiments of organisations operating in the global events and meeting industry. MICE travellers are increasingly considering India as an option due to its rich cultural heritage. Hotels are witnessing a consistent growth in the MICE with almost 10-12 per cent of hotels receiving their business through MICE events while convention centers with larger inventories received 20-25 per cent business through MICE events,” she added.
Melissa Colaco, Director of Sales, Goa Marriott Resort & Spa informed that, apart from assisting with volumes in terms of room revenue, this segment also touches upon incremental business from other streams such as catering, recreation, other food and beverage and overall, total hotel revenue. “In most cases, it helps with forming a base for the hotel which would assist with yielding and maximising room rates thus helping a hotel drive its occupancies,” she said. For Goa Marriott Resort & Spa, 2014 was another good year for MICE segment. “It contributed to around 28 per cent of the entire room revenue for the hotel. In terms of growth on a year on year basis, it produces approximately 8 to 10 per cent higher revenues compared to the previous year,” she stated.
Duggal lauded the hospitality sector’s efforts in the sector, stating that spurt of hotels, especially in the mid market segment, that accommodate MICE facilities, has grown infrastructure in India, although metros may lose business to these cities.
Challenges
When asked about the challenges faced in operating in the MICE space in India, as well as selling India as a MICE destination, it was surprising to see the industry point every way except the tired answer of infrastructure impediments. While Jalnapurkar and Razdan did name infrastructure as a challenge, it was not among their main woes. Jalnapurkar also lamented the challenges in terms of delivering end-to-end execution, opining that today, the corporate is increasingly looking for organising MICE events with finest venues and hotels at par with international standards and entertainment.
“To my view, it’s the coming together of the government and private sector which can combat the unwanted situation. And for the challenges related to the operation, logistics and others, we need to be not only equipped, but be perceptive and be on the toes,” he suggested.
Colaco sees the emergence of newer destinations which are relatively lesser expensive and unexplored as the main challenge. According to her, there is also an increasingly worrying trend where the MICE industry moves to confirm their plans closer to the date, as compared to other International marketing who start their planning process well in advance.
Duggal stated that catering to Indian customers demands has never been a challenge as there is enough expertise and facilities available in the country. However, the aspirational value of a MICE traveller is lower when travelling within India than when travelling internationally.
Razdan attributed the growth in outbound MICE footfall to the global slowdown in countries such as UK, Germany, France, Belgium and USA. “It is leading to a decrease in the number of international delegates participating in conferences organised in India. Also, the increasing airfares by major airlines, increasing airport fees, and imposition of high taxes by the government are adversely affecting outbound travel,” she opined.
Saeid Heidari, General Manager, JW Marriott Hotel Mumbai Sahar suggested that Mumbai now needs a MICE bureau to further fuel business from this segment. “The new government’s policies are helpful. Now all we need is a MICE office and stronger infrastructure,” he opined.
S.M Azmat, President, Sales & Marketing, Jaypee Hotels & Resorts believes that the states can play a major role in attracting biggest numbers by developing interesting spots, local entertainment theme parks etc. where group activities can be organised. “These could be developed around or in the backdrop of the historical monuments, places of tourist or religious interest or modern architectural marvels. Ease of local licenses and permissions for holding group events at hotels, resorts or at public places with proper safety and security in place is the need of the hour,” he added.
The international market
Despite growing as a MICE destination, India is yet to attract a sizeable amount of international travellers from the segment. This is not to say that properties have not benefited from international MICE movement. Taj Hotels Resorts and Palaces, for one, has always seen a steady demand from international markets, though the specific source market keeps changing depending on the economic factors there. According to a representative from the company, the recent economic and policy initiatives by the government has certainly helped even further.
Banerjee agreed, informing that there has been a slight increase in growth from last year. The inbound MICE segment, he added, has grown with alacrity due to increase in international trade, sporting events like Commonwealth games, F1 has increased participation in International Congress, exhibitions, seminars, product launches and corporate meets. These factors have evolved the growth of the inbound MICE segment.
The others were not so optimistic in their outlook about inbound MICE travel. Razdan revealed that Golden Tulip Hotels & Resorts has seen a very slow growth in MICE travellers from the International market, stating that servicing international MICE travellers is very different from Indian MICE travellers as they need facilities as per International standards and qualities which may be difficult for some hotels to fulfil.
Duggal called inbound MICE growth a farfetched aim, as India does not come across as a strong MICE destination for international groups. “There may be groups coming in that are sector driven, especially in the medical field as India has many good doctors. However, India struggles to give them an experience equal to an international destination as we are not developed enough to give them an entertainment factor,” he opined.
Azmat stated that, the growth in demand for MICE from international market is very slow, though the volumes available are very high. “While selling MICE to the international market, Indian MICE destinations are compared to the well established MICE destinations around the world. The competition offers tax exemptions, state receptions, other incentives and well developed infrastructure,” he added.
Agents play critical role
India is still one of those countries that, despite having made significant headway in technology and moving to the ecommerce platform in drones, still depends on the industry for their travel plans. And we are speaking of just holidays and short sojourns. For a sector as vast and diverse as MICE, the industry is most definitely banked upon heavily, not just by consumers, but also by the suppliers themselves. It was hence little surprise that each of the spokespersons contacted by T3 revealed that the travel agents in India play an important role in their success story. Taj Hotels Resorts and Palaces sees its relationship with the agents in India as a symbiotic one – one cannot sustain without the other.
Duggal revealed that, at the start of the MICE industry in India, the agents played little role in the sector as the corporate dealt directly with the suppliers. Now, with the advent of the segment, travel companies have begun adding an events portfolio to their profile to better benefit from a segment where margins are higher.
Colaco stated that the travel trade fraternity plays an extremely key role in driving the MICE business to any destination or hotel. “The fraternity influences decisions makers to lean towards a certain destination. It is very vital to keep the agents engaged on a regular basis. We hold regular travel and trade shows along with FAM trips inviting the agents over to experience the destination on a first hand basis,” she said.
Banerjee views the industry as more of a business partner in the sector. He stated that the Crowne Plaza Today Gurgaon works very closely with trade partners as they are close to the industry’s consumers and also often play a key role in determining the type of travel and leisure services that travellers purchase. “We work hand in hand for mutually beneficial growth,” he said.
Duggal further informed that the travel associations are already actively involved in working with Lavasa. Furthermore, the company participates in all travel shows and conventions to promote the convention centre facilities. “70 per cent of our business comes in through the trade,” he said.
According to Azmat, in the recent past, looking at the growth of this segment some large travel companies have also added MICE department to their portfolio, which is a good sign. They are already in related business and deliver well. “We work very closely with all such companies and develop and create attractive and engaging products and custom made packages for the prospects.”
