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GCC MICE OUTBOUND

March, 2016

MICE ARABIA CONGRESS

Karthik Ramamurthy, Head – MEA & India

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OPTIMISMNAVIGATING

tentative

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Source: IMF WEO, IPSOS Analysis

THE REGIONAL ECONOMY IN A STATE OF FLUX

Predicted Real GDP Growth for 2014

0

1

2

3

4

5

6

7

KSA UAE Oman Qatar Bahrain Kuwait

As of OCT 2013 As of OCT 2014

0

1

2

3

4

5

6

7

KSA UAE Oman Qatar Bahrain Kuwait

As of OCT 2013 As of OCT 2014 Actual 2014

Actual Real GDP Growth (2014)

2015(E) - 3.3% 2016 (F) - 2.8%

Oil

Forex Security

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WITH VISIBLE PRESSURE ON INDUSTRY

Source: Trading Economics, HSBC Markit

Manufacturing PMI (2012-2016)

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BUT, THERE IS OPTIMISM TO TIDE THROUGH, INDICATING RESILIENCE

Source: Korn Ferry Hay Group business outlook study, 2016; EIU

65% of the business are

forecasting their revenue to grow by 5 to 15% or more in 2016

30% of the business are expecting

business to look more or less the same as 2015

5% of the business forecast a

reduction of more than 5% in revenue

Business Outlook 2016

50% of the businesses have set cost reduction and higher

profitability as their strategic priority for 2016 as against 26% in

2015Cost Reductions Profitability

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BUILT ON FAVORABLE FUNDAMENTALS

Source: UN Population Data 2016, World Bank Data, IPSOS

8% 3% 2% 7%

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85+

Ag

e g

ro

up

FemaleMale

GCC Population Demographics

More than 50% of the population is in 26-45 years age group and contribute to

70% of outbound travel

GCC Population (‘mn)

2013 2018F

49.7 56.3

GDP (Nominal) Per capita

UAE KSA Qatar Kuwait Bahrain Oman

$96,732

$43,962 $43,594

$24,161 $24,855

$19,309

USA

$54,370

UK

$45,729

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SO, WHAT IS THE SIZE OF PRIZE?

2014 2020F

USD 13 Bn

USD 19 Bn

Source: IPSOS Estimates & Analysis

INHIBITORSSlowing

Economies

Increasing Security Concerns

Economic impact of oil price

ENABLERS

Favorable Demographic

Increasing presence of multinational

businesses

Increasing Connectivity

Major events

GCC Business Outbound

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KEY DESTINATIONS FOR MICE TRAVELERSMost frequented destination markets

Growing Destination Markets

USA

South Asia

SE Asia

Switzerland

GermanyUK

France

Morocco

17% to India,

Pakistan and Bangladesh

31% to North

America62% to Europe with

24% travelling to UK

Source: IPSOS Research

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DRIVEN BY…..

Key Purpose for MICE Travel

BusinessDevelopment

~80%

Conferences/Exhibitions

~45%

Training~25%

Sourcing~60%

Incentives~10%

Source: IPSOS Research

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PARAMETERS CONSIDERED FOR CHOICE OF DESTINATION

Business Relevance Security Access Weather Food

Promotion/ Packages BudgetShopping Social Media Entertainment

Source: IPSOS Research

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IMPORTANCE OF PARAMETERS BY SEGMENT

Meetings

Conferences

Incentives

Exhibition

Business ServicesFinancial

IT

RetailHospitalityFinancial

HealthcareTelecomFinancial

HospitalityBusiness Services

RetailConstruction

ManufacturingHealthcare

Food

Business Relevance

Security AccessPromotion/Packages

Budget Food Shopping Entertain

- Very Important - Less Important

KEY VERTICALS

Source: IPSOS Research

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KEY CHALLENGES FACED BY ORGANIZERS

SECURITY CONCERNS

VISA/IMMIGRATION PROCESS

MULTICULTURAL GROUPS

FOOD

Source: IPSOS Research

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TYPICAL GCC LUXURY TRAVELER PROFILE

GCC NationalAge: 25+Strong emphasis on family activities

Western ExpatAge: 30+Influenced by country of origin

9% increase in

outbound luxury travel in 2015

14% residents

spend $7,000 on a

family trip

GCC OUTBOUND LUXURY TRAVEL MARKET

LUXURY TRAVEL – SOMETHING THAT CHARACTERIZES THE REGION...

1/4TH

of GCC outbound

luxury travel is MICE

Source: Kippreport - Luxury Travel’2015, IPSOS Research

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AND THAT BUCKS THE ECONOMIC CLIMATE

On Air Travel

Travel in business class

On Accommodation

On Dining

SPEND BY GCC TRAVELER COMPARED TO REST OF THE WORLD

2.6X40-60%

4.3X

5.6X

LONDONPARISSOUTH OF FRANCE

ITALY

GERMANYSWITZERLANDAUSTRIA

Europe Continues to be the Most Popular Destination for Luxury Travel

Natural Experiences Drive New Trending Destinations

TURKEYCROATIASOUTH AFRICA

AUSTRALIANEW ZEALAND

PO

PU

LAR

DES

TIN

ATI

ON

S

TREN

DIN

G D

ESIT

NA

TIO

NS

Source: Kippreport - Luxury Travel’2015, IPSOS Research

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When the going gets tough,

the tough get going

the tough differentiate and standout!

TO CONCLUDE…

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