Globally the MICE market, which includes around 400,000 conferences and exhibitions, is estimated at a size of US$280 $300 billion. Many nations’ tourism economy thrives on this sector. Asian MICE market has been one of the biggest growth stories with a rate of 38 per cent rise since 2006 which accounts for US$60 billion. Despite these phenomenal figures, India is one nation which is yet to tap the potential of this huge MICE business. Some of the key reasons behind this failure are lack of world class exhibition and conference infrastructure in the nation. Another major challenge is the higher taxation policies by the governments, due to which we lose the MICE business to the neighbouring competitors.
According to the ITB World Travel Trends Report, MICE contribution to the total travel market is 54 per cent. According to the figures from 2015, North America has the largest market share, followed by Europe and Asia Pacific which is further bound to grow.
But, when it comes to India, it only shares as low as one per cent of the global market share. In 2012, India as a MICE destination ranked 25th, but according to the 2015 statistics India has been downgraded to the 35th position. One of the most important features of the MICE business is that it is not sensitive to the seasonality factor. In that case, India needs to develop itself as one of the most lucrative destinations with its world heritage sites, culture and ethos.
Policy Initiatives
Tourism is one of the segments which the new government is looking at to boost the nation’s economy. Having realised that the MICE segment can be a game changer for tourism growth, the Ministry of Tourism had adopted an aggressive approach to promote this segment. In fact, the new Tourism Policy which is to be released anytime soon has identified MICE as a major growth driver for the Indian tourism industry. The Ministry is also looking to extend the e -Tourist Visa initiative to the MICE sector.
“The new tourism policy, which is just a matter of time, is going to highlight and emphasise a lot on the possibility of increasing MICE into India,” Vinod Zutshi, Secretary, Ministry of Tourism, Govt. of India said at the inauguration of a ‘Thought Leadership Meet on MICE Tourism in India,’ organised by industry body ASSOCHAM. The Ministry is also pushing the case that the facility of e Tourist Visa should be extended to MICE segment as well. “We had a meeting with the Ministry of Home Affairs a few days ago, we insisted on MICE e-visa as well, we have been trying very hard for e-visa for MICE and medical and we are hopeful to have this e-visa to see the light of the day, particularly for business tourists to begin with but we are insisting that ultimately the conference visa should also be done, which we have been assured that it will be, step-by-step.” Talking about India’s weakness in international bidding, he said, “We need to introspect and see what can be done, we tried in the last budget, as a pre-budget measure, we made a proposal to the Ministry of Finance to have a corpus by which we can be more aggressive while doing international bidding for MICE events, unfortunately it could not see the light of the day, but we will keep making those efforts.”
Speaking on the occasion, Suman Billa, Joint Secretary, Ministry of Tourism, Govt of India and Chairman, India Convention Promotion Bureau said that the new policy aims at pushing the current 0.68 per cent share of all MICE traffic to one per cent by 2020. “We further hope to double that share to two per cent by 2025,” he noted. He opined that India has all the ingredients to make it a fascinating destination. He argued that a friendly tax structure is the need of the hour to grow MICE. “Taxes have been a huge issue when it comes to MICE travel. In order to promote tourism in the sector, tax rates should be brought down to global standards.” He also said that single window clearance is required and online facilities to submit documents, for this dedicated desk is required at MEA to provide permissions related to international events. He said that central and state governments’ needs to work together to create a corpus of fund to engage in marketing and branding push in a major way.
Speaking about the new initiatives Chander Mansharamani, Vice Chairman, India Convention Promotion Bureau added, “There are number of steps that have been taken by MOT in the form of greater participation in MICE related shows in the world. We at ICPB have drawn a plan to market India as a preferred convention destination. The other good news is the new additional infrastructure coming up in various part of the country. To further tap this market, it requires very aggressive marketing and promotional activities. We are sure with the new approach; we will be able to achieve the target.”
Overcoming infrastructural woes
Presently, India lacks an integrated world class facility which can meet the requirements of global exhibition-cum-convention operators in terms of space, project facilities, and logistically, etc. Only a few centres in terms of organised space are available in the country. The lack of world-class convention centre coupled with other infrastructural challenges has been a major hurdle for the growth of this segment. Ironically, the Govt. of India itself is facing challenges to organise a mega global summit as was seen during Indo –Africa Meet which was organised in a stadium rather than a convention space. This prompted the government to expedite the process of developing convention centres across the nation.
“The infrastructural build-up to augment MICE has been nothing short of spectacular. We have noteworthy convention facilities in a number of cities like Hyderabad, Ahmedabad, and Greater Noida,” Billa said and added that the failure to promote MICE lies in our inability in connecting the dots. “I believe, where we are missing is connecting these singular efforts into a more meaningful chain. We need to be forthcoming in our pitch, story-telling, and bringing together all those who form an intrinsic part of the value chain,” he suggested.
The good news is that the Centre has now geared up to develop global standard convention centres. According to the Ministry of Commerce, India’s most noted venue Pragati Maidan is all set to go under re-developed and will be transformed into a world class convention centre. The proposal is to develop 326,065 sq. mt of built-up area including 119,445 sq. mtrs of exhibition space into a Convention Centre with seating capacity of 7,000 pax. The re-developed convention centre will have a number of different sized meeting rooms, space for public circulation, support facilities and parking space for about 4,800 passenger cars in the first phase. The second phase envisages further development of 86,255 sq. mtrs. of exhibition area. The project at Pragati Maidan is proposed to be implemented on EPC (Turnkey or Design Build) mode. The period for completion of the project in phase-I is envisaged as 36 months from the date of award of the project to the executing agency, subject to the statutory clearances.
Under another proposal of Department of Industrial Policy and Promotion, creation of a world class state-of-the-art Exhibition-cum-Convention Centre is planned in Dwarka, New Delhi. This proposed Centre will comprise a host of independent facilities like exhibition halls, convention centres, banquet halls, auditoriums, arena, financial centre, hotels, food & beverage (F&B) outlets and retail services. The project at Dwarka is being developed in Public-Private Partnership mode, utilising, if necessary, viability gap funding of the Union Government. Completion of the project is dependent upon confirmation and approval of various activities needed to be undertaken with regard to implementation of the project by respective authorities/agencies. Apart from these, the Centre is also encouraging state governments to set up convention centres in their respective states to draw more tourists.
The moot question here is that do we essentially need the mega convention centres to grow MICE tourism? Experts of the industry do not think so. Globally, it has been noted that around 90 per cent of the MICE business are small in nature with a maximum of 200-250 pax. In this scenario, India seems quite well equipped with a lot of large hotels covering up for these spaces. Still these hotels have not been successful in convincing these MICE groups. Roni Madhvani, Director, Marasa Sarovar Premiere, Tirupati explains, “For some of the key MICE feeder markets internationally, India is a long haul destination and therefore costs become prohibitive for effectively tapping this segment optimally. Lack of infrastructure has been the greatest challenge for the growth of MICE Tourism in India. The country is in need of additional convention destinations for both large as well as small meeting spaces. Currently, choices are restricted to a few destinations. The government should also roll out strict measures in place for the safety and security of the tourists and its people alike.”
Focused marketing key for hotels
With all the global hospitality majors eying the India market, the nation has an array of hotel with good MICE infrastructure. Despite, these facilities the hotels are not able to tap the inbound MICE business. One of the key issues is the lack of MICE focused marketing. On the other hand, hotels are witnessing a good footfall in terms of domestic MICE business. Hotels are also using the potential of MICE to cover up the lean season period.
Dipak Haksar, Chairman – Tourism Committee, ASSOCHAM and Chief Executive Officer, ITC said that that MICE tourism is natural extension of leisure and perceived as a ‘clean’ industry which drives “entire gamut” of economic activity. “MICE Tourism supports development in other sectors of the economy and bring dividends to the local community and the society at large,” Haksar said.
Mani Ravi, Director of Sales, Leisure & MICE – India, Hilton Worldwide claims, “The proliferation of large-scale Meetings and Events facilities within hotels and a corresponding increase in room inventory has instigated demand for events at hotels. Specifically, conferences as well as weddings and wedding-related events are productive segments for leisure destinations during shoulder and off season period. This has, to an extent, alleviated the significant disparity in occupancies between off season and peak months. Hotels in locations like Jaipur, Agra and Goa offer extensive facilities and services and are geared to host such gatherings.”
Recently, Hilton Worldwide introduced the Conrad brand in India with the launch of Conrad Pune. This hotel has been projected as a luxury MICE destination. “Cities like Pune and Chennai have seen an increase in demand from this segment, and specifically from the IT industries. Given the extent of upscale options that Pune offers and at exceptional value, the demand from conferences in the city has grown significantly. Our hotel in Pune that opened last month, Conrad Pune has all the ingredients to become the most sought-after address for exclusive business meetings and social gatherings,” added Ravi.
Echoing Ravi’s opinion Madhvani added, “Some recent hotels openings are focusing largely only on MICE. Sarovar Hotels & Resorts itself has significant numbers of hotels that are concentrating on the MICE offerings. But for the MICE market to grow, the states and MoT needs to work in tandem with the industry associations. MICE can be termed as a very niche product and needs to be marketed in a focused manner”. He also believes that although there is no hard and fast rule on attracting MICE clients, it is essential to form a proper team with airlines, hotels, transport companies, cultural organisations, boutiques, and travel agents to target markets potential MICE clients.
Tour Operators speak
Specialised MICE tour operators are extremely optimistic about the growth in this sector in 2016. Most of the tour operators have witnessed that MICE tourism originating from Indian corporate was encouraging in fiscal year 2015 for domestic destinations. Speaking about the challenges in this segment, MICE expert Om Prakash, Director, In ORBIT Tours states, “MICE targets are certainly on the increase and Indian travel industry is marching ahead to increase its share. The set back in India’s world rank can be also due to the aggressive promotion by some other countries and the increase in their numbers. To recover, India needs aggressive marketing. India also needs to be more competitive destination. Indian land operation cost is higher than our neighbouring countries, maybe due to higher taxation. Hence, Tourism Ministry needs to be pro-active to provide incentives to MICE Inbound to enable to compete with our neighbouring countries.”
Another challenge which the tour operators foresee is the fact that Indian restaurants are easily available in all European cities, USA, Japan, Korea and even in China. Whereas specific countries food are not easily available when their groups travel for various sight-seeing across India.
“The average expenditure by a delegate is US$ 278. A conference delegate spends 2.5-3 per cent more than an average traveller,” said Marsharmani. Talking about steps to promote MICE tourism, he added, “There is need for better infrastructure facilities and we shall recognise the potential of the cities based on their economic value. ICPB suggests that 20 per cent of the global budget should be dedicated to MICE and there shall be ease in the visa process for conference delegates.”
Overall, with the recent developments by the ministry for this segment, industry expects MICE to be the next big game changer for the Indian economy. Also, with a intent to develop this segment hotels are initiating novel innovations and developing focused marketing strategies.
