Southeast Asia & Mainland China:

An Emerging Meetings Market

David L Jones, PhD.Associate Professor

Hong Kong Polytechnic UniversitySchool of Hotel and Tourism Management

1

What Ever It Was That Got You To

Where You Are Today, Is Not Sufficient to

Keep You There

What Do We Need to Know About SE Asia and Mainland

China?• MICE industry growth

– Hardware & software• Outbound – Mainland China

– Your attendee• Inbound

– Holding a convention or event

MICE INDUSTRY GROWTH

• Background

– Historical Perspective

– Comparing Western and Asian Meetings

• Why is China changing what we thought we knew?

– China’s new convention centers

• People !!!!

My Perspective

Historical Perspective• Personal experience – since early 90s

• Large meetings and conventions– North American and European

organizations coming to SE Asia, but not really Mainland China

• Exhibitions and tradeshows– Focus on attracting Westerners to Asia

• Small Meetings– Local offices of North American, European

and Japanese companies• What does this mean?

Western Meeting Specifications

• Typical meeting set-ups– General sessions– Breakout rooms

• Size of the meeting sessions• Exhibits are associated with meetings

– 54% of tradeshows managed by associations

• Basis of how Western hotel meeting rooms are built

Typical Meeting Set-ups – North America

Breakout Session

General Session

Differences in Size of Various Types of Meetings

Size of meeting rooms for conferences – North America

Differences in Asian Meetings

• Meeting room set-up– Requirement of head table at all sessions– Formality of meetings

• Simultaneous interpretation• Size?

Asian Meeting Set-ups

Forum General Session Head Table

Breakout Session

Photo to be Added

Today’s Perspective - Meetings

• Intra-Asia meetings and forums• Ease and cost of travel have led

to increases in regional meetings– Mainland China’s high-speed trains

• Associations are growing in Asia– APac CHRIE 2011 – Hong Kong– Mainland China’s Alliance of China

Conference Hotels

Mainland China Perspective

“The government has recently begun to realize the value of the meetings industry”

– Haiyin Lieu, CEO of the China National Convention Center

Size!!

What Size Should Meeting Space Be?

0.06

0.3

1.3

0 0.2 0.4 0.6 0.8 1 1.2 1.4

China

USA

UK

POPULATION

Are We Prepared?Financial industry employees per institution

Hotel ballroom sizes – Hyatt Hotels

Are We Prepared?Financial industry employees per institution

Hotel ballroom sizes – Hyatt Hotels

Grand Hyatt Macau – 20,742 Sq. Ft. – 2,500 Theater Style

Future Convention Center Venues in Mainland China

Anticipating the trend?Two Case Studies

Convention Venue Landscape

• Still about exhibitions– 150 exhibition halls of 10,000 m2– 3,500 official exhibition worth CNY

16.2 billion (USD 2.63 billion)• China National Convention Center

– Changing the landscape– 690 events in first year

• Corporate – 38%• Associations – 24%• Exhibitions – 12%

China Research & Intelligence 2010

CNCC

China National Convention Center - Beijing

Shanghai Expo Center

Size Specification Highlights

• Convention Hall – 6,400 m2 (5,700 people)

• Ballroom – 4,860 m2 (3,000 for banquets)

• Shanghai – Auditorium seating 2,500• Shanghai – 106 meeting rooms

– 11 can seat more than 200 people each• Beijing nearly 100 meeting rooms

– 3 can seat more than 540 people each

Wal-Mart – China - 2011

Wal-Mart - China

• CNCC – January 2011• 4,000 attendees from 329 stores

in China• 79 suppliers – 13,000 m2 of

exhibits

People!!!!

What about the “peopleware”?

War for Talent

• By 2025 Mainland China will have 23 cities with 5 million or more population– No shortage of people

• Getting best and brightest, then keeping them– 60% of college grads don’t find jobs

– Yet, they well change jobs for RMB 500 extra per mos. (less than USD 86)

• Expat or Local?– Salaries in Mainland MICE industry almost equal to

those in Singapore

• Biggest issue – Lack of Middle Management

What About Service Quality and Industry Knowledge?

• Change in past 20 years• Spoken English – Very Good!• International brands versus

domestic brands• Commitment to training• Ability to develop and retain

Middle Managers• Service is part of the culture

Understanding The Lifetime Value

of the Customer• Lifetime value view, not

transaction view – Chinese guanxi

• Revenue and profits by average customer over a lifetime by segment

• Increase average purchase, frequency of visit, life

Development of Service Culture

Business

HomeEducationalInstitutions

Society

Shangri-la Philosophy Has It Changed?

BEFORE NOW

Shangri-La

Hospitality

from

Caring

People

殷勤好客香格里拉情

Shangri-la Signature Events - Example

• Super Value Dates to enable a quick search for the best available room rate across Shangri-La hotels, resorts and Traders hotels

• A written basic proposal and quotation for the event within six working hours of initial enquiry

• Group Online Reservations to save the trouble of consolidating bookings and rooming lists

• Central Credit Administration to facilitate a credit line with multiple properties

• Complimentary guestroom Internet service and function room wireless Internet access

• Total hotel experience with dedicated events specialists in key departments to provide seamless service throughout the hotel

• Streamlined planning with appointed events management professional to handle all event arrangements

• On-site service management with appointed meeting specialist to oversee all event requirements and service delivery

• On-site technical support with dedicated AV technician on hand throughout the event to ensure the smooth operation and functionality of equipment

Questions for You

• Has anyone had success with attracting attendees from Asia?

• Who is interested in increasing the number of attendees from Mainland China?

OUTBOUND CHINESE –YOUR FUTURE

ATTENDEE

100 million outbound Chinese tourists by

2015!!How do you reach them for meeting attendance?

Mainland China Travel

• Spending by outbound Chinese tourists ranked fourth-largest worldwide in 2010.– Up 20.4% year on year

• Top outbound market by 2020 – UNWTO

Approved Destination Status (ADS)

• Visa approval for leisure travel – Approved travel agents and

wholesalers• Selected countries

– Canada and USA are ADS countries• Biggest issue is USA Visa, not

China

Mainland Chinese Attendee Profile

eLong – Hotel Guest Decision Making

1. Prices2. Location3. Description of facilities4. Review of other users

Chinese Luxury Tourist (CLT) – Regions to be visited

Market Probe Travel & Tourism Group, 2011

CLT – Best Hotel/Airline Brands

Market Probe Travel & Tourism Group, 2011

CLT – Class of Service

Market Probe Travel & Tourism Group, 2011

Reaching the Mainland Chinese Attendee

Internet & Social Media• Number of Chinese Internet users has

grown by 1500% since 2000• Currently

– 456 million Internet users• 32% penetration compared to 80% in USA

– 800 million mobile users• Most engaged country online – 92%• More bloggers than Europe and USA

combined

Social Media in Marketing

• Social Networking Sites

• Review Networking Sites

Questions for You

• Who has held a meeting in SE Asia or Mainland China? What were your experiences?

• Who is considering SE Asia or Mainland China?

INBOUND – HOLDING AN INTERNATIONAL MEETING IN MAINLAND CHINA

International Arrivals

• International arrivals staying at least one night reached 55.66 million in 2010, up 9.4 percent on 2009

• China's appearance in the top three was its first, according to the UNWTO

Where did they come from?

Where did they go?

China Meetings

• ICCA – China jumped from #19 to #9 on the list of countries drawing the most association business

• PCOs– MCI– Kellen

USA Corporate Presences in Greater China

• Yum Brands (KFC, Pizza Hut) – 2011 China overtaken USA as top profit maker

• GM– China exceeds USA in 2010

• Las Vegas Sands and Wynn– Revenues are 3 times more in Macao than LV

• Dell Computer– China is 2nd

• Coach– China is fastest growing market

• Starwood & Marriott– Mainland China largest market outside USA

Holding an Association Meeting in Mainland China• Government policy on

attendance and exhibit size - 300 international attendees

• Other issues– Political issues– Visa– Registration costs– Venue cost– Security (copyright and patent)

Application Process for Approval

China Medical Society Example

Criteria for Support from CMA

• Support by China Medical Association & Specialty Society

• Background, scientific benefits, financial benefits

China Medical Association Meetings

• 30 annual meetings of 1000+• Orthopedics is largest• Preferred locations

– Suzhou– Xiamen– 2 most popular then Beijing and

Shanghai• Months – May then September

Key Points You Should Know about Mainland China

• Experienced conference management staff at international brand hotels– Not at lot of depth, however– Willingness to serve

• Local infrastructure is inbound operators – Transitioning from wholesale and incentive markets– Detailed contracts are a new experience– PCO’s very common

• No CVBs yet, but Tourist Boards are evolving to MICE– Beijing Tourism Administration (BTA)– Shanghai Municipal Tourism Administration & Shanghai

International Conference Management– Key players for association meetings approval

• GCMBE – Beijing in December

Where Do You Hold It?• Beijing• Shanghai and Yangtze River Delta

– Hangzhou, Suzhou, Nanjing, Ningbo• Pearl River Delta

– Guangzhou, Shenzhen• Second Tier Cities

– Chengdu, Xi’an, Wuhan, Xiamen, Dalin, Qingdao, Kunming, Chongqing

• SARs – Hong Kong & Macau

Secondary City in Mainland China

Chongqing Example• 50 – 4 & 5 Star hotels by 2015• International brands – Marriott

and IHG• Advantages:

– Convenient transportation– Cheaper than other big cities– Abundant tourism products– Different itineraries

Greater China and SE Asia

Hong Kong SAR

• Cosmopolitan city• Global mindset• Experienced

– Exhibitions– Incentives

• Great convention and exhibition venues

Hong Kong Convention and Exhibition Center (HKCEC)

Asia-World Expo (AWE)

MICE in Hong Kong• Meetings & Exhibitions Hong

Kong (MEHK) – Launched November 2008 – offer one-stop professional support to

MICE organizers• 2008-09 Hong Kong Budget

– earmarked HK$150 million (US$19.2 million) over 5 years to strengthen promotion on Hong Kong as a MICE destination.

Macau SAR• Sleepy fishing village to mega

gaming center• Themed integrated resorts

– Cotai Strip• Venetian• City of Dreams• Sheraton/St. Regis• Galaxy

– City• MGM• Wynn/Encore

• All inclusive themed resorts

• Privately owned & managed

• Extremely rapid development

• Issues, with changes seen every month– transportation– infrastructure– HR

Different business concept

Singapore• Largest MICE destination in SE Asia• Theme integrated resorts

– Marina Bay Sands– Resorts World Sentosa

• Convention hotels– 7 surrounding SUNTEC

• Experienced• Easy transportation• Chinese/Indian/Malay cultures

Singapore

SUNTEC

Other SE Asia MICE Destinations

• Thailand – Bangkok– Political issues

• Malaysia – KL– Muslim country

• Taiwan – Taipei– User friendly for Americans

• Philippines – Manila– Best American English

• Viet Nam – Ho Chi Minh City/Saigon– Not ready yet

UNDERSTANDING ASIA

Cross-cultural Negotiation

Key Points• Decision process

– Collective versus individual– Trust factor – guanxi

• Role of the Players– PCO’s– International brand versus domestic hotels

• Understanding the lifetime value of the customer– Relationship versus transactional

• Negotiations not done over the phone

Asian Principles“3 Plus 1 Factor”

• Respect for Elders• “Face”

– Giving It • Work Before Self

– Importance of the Status of Working for a Hotel

• Plus Factor: Educational Sponges

The Possession of Facts is Knowledge,

the Use of Them is Wisdom

Thomas Jefferson

To Be Fond Of Learning Is Near To Wisdom

智者乐学Confucius

孔子

Thank You

Xie Xie

谢谢！