A slice of MICE

Indian hotels are slowly waking up to the potential of Meetings, Incentives, Conventions & Exhibitions tourism but infrastructural constraints remain a hurdle. By Gayatri Vijaykumar

Growth of a destination as a financial hub often leads to the development of Meetings, Incentives, Conventions, & Exhibitions (MICE) tourism in that country. Many south-east Asian countries are good instances of this evolution. They have used aggressive promotional techniques to woo MICE travellers to their countries.

The Sri Lankan Convention Bureau (SLCB) recently invited Indian corporate travellers to enjoy the facilities that the country has to offer as a MICE destination. For this, SLCB along with Sri Lankan Airways launched a special package of Rs 12,000 per person that covers the city of Colombo, the surrounding beaches and the countryside. Of course, proximity between the two countries and Sri Lanka's positioning has helped.

Even Singapore and Malaysia are doing their bit. According to Taposh Chakraborty, CEO of Boutique Hospitality Consulting, "Despite the SARS scare, Singapore had US$ 2.2 billion for MICE and about US$ 3 billion in 2005. Malaysia is aiming to achieve 10 per cent of world share which is about Malaysian ringgit (MYR) 30 billion.

India too is hoping to achieve these figures. Unfortunately, infrastructure is proving to be a major hurdle. Vishnu Murali Konduru, managing director of Saastra that provides software solutions to MICE planners, explains, "Typically, MICE is dominated by large conventions and conferences and India regularly misses out on inbound MICE consumption. The primary reasons for this are the lack of basic infrastructure and effective destination marketing - the most important aspects to attract inbound conferences and conventions."

Konduru adds that though internationally, MICE contributes to about 40 per cent of the overall hospitality market, this figure is not available within India. Another factor which hinders MICE growth in India is that multinational companies prefer "exotic" foreign locales. Meanwhile, Chakraborty says, "Honestly, MICE is at a fledgling stage at the moment but it holds immense opportunities and can reach as high as 10 per cent of total room nights if infrastructure is available. Nevertheless, cities like Delhi and Hyderabad that boast of proper convention centres witness high number of MICE tourists."

Infrastructural woes

Poor infrastructure has been blamed for the lack of MICE tourism in India. Chakraborty explains that nothing less than an international standard exhibition centre is a must in cities like Bangalore, Mumbai and Delhi. "Along with that, there should be an adequate inventory of hotel rooms in all segments. Transportation is the key to the movement of large traffic. Sightseeing, leisure spots, shopping, night life, departmental stores, man-made international standard amusement parks activities, entertainment, standalone high-end F&B outlets - all aid the growth of this segment," he adds.

A concern shared by many in the industry is the lack of activities post the convention. Says Chakraborty, "Most would hate to go to sleep after 11 pm. For this, the time limit for bars and pubs needs to be relaxed. In cities like London and Berlin, that are so popular for MICE, one does not feel the rush of traffic until one reaches the venue." Konduru agrees and says, "Delegates attending a typically large convention/conference tend to spend a large part of their time doing leisure activities in and around the region. For instance, participants at a three-day international conference may spend three additional days touring or visiting nearby destinations. An important aspect is the money they are willing to spend during the additional time they are there. Research shows that they tend to spend much more per person per visit in their free time than the average tourist to the same geography. But while they have a greater propensity to spend, they also expect some basics such as infrastructure because they aren't backpacking. It is easy to see why India continues to lose out." Lack of cost-effective accommodation is considered as another drawback. Explains Konduru, "Planners who want to include India in their list of MICE destinations get discouraged when they get harried to get hotel rooms at the right prices."

Pricing MICE

MICE participation costing is done taking into account several parameters, which in turn depend on how large or complex the event is. Konduru explains some of the components involved in pricing:

• Scope of the event - domestic or international
• Size of the event, and therefore the venue and the supporting activities to make it work
• Marketing expenses to reach target audience
• Price tolerance of the target audience
• Profit margins necessary to make it a worthwhile proposition
• Negotiation ability of the organisers in managing costs

Chakraborty feels that fancy pricing would not work at all. "That is why there needs to be rooms in every category for MICE to grow. This is actually happening in Delhi and its surrounding areas for the Commonwealth Games," he says.

The challenges

Infrastructure has been cited as the main challenge for the promotion of MICE. Hygiene, sanitation and cleanliness comes a close second. Konduru adds that in the recent years, the Incredible India campaign has done more to market India successfully than any effort in the last 50 years. The stereotype of India (land of snake charmers and elephants) does not achieve the desired result. Therefore, according to him, successful marketing must achieve the message about India being a land of opportunities, knowledge, culture and tradition combined with a modern and cosmopolitan lifestyle.

Chakraborty feels that in order to promote MICE tourism in India, some parameters have to be met. "Providers in this segment must primarily differentiate themselves from their competitors through additional customer benefits. These may be with fast and simple processing of bookings, cheap rates and low transaction fees through standardised or automated processes, or uniform cancellation and deposit conditions. This underlines the enormous potential of the internet," he explains.

Chandrajit Bannerjee, deputy director general, Confederation of Indian Industries and CEO of Bangalore International Exhibition Center (BIEC), feels that there is a huge opportunity for MICE promotion in India, not only in terms of international MICE travellers but also in terms of domestic travellers. "What we really need is software infrastructural development for MICE. Apart from that there has to be better accommodation facilities around convention centres. You have good quality hotels, serviced apartments and transport facilities around convention centres the world over. Bangalore scores a point as we have a number of hotels and serviced apartments coming up," he adds. Though technology is not a big bottleneck, it is an important enabler of the MICE business, particularly in areas such as marketing, operations, CRM, e-commerce and payment systems and customer service.

MICE the HICC way

The Hyderabad International Convention Centre (HICC) located in Cyberabad is one of the most successful instances of promoting MICE in India. Hosting a large number of events this year, including the 58th annual International Astronautical Congress 2007, HICC has been developed by Cyberabad Convention Center, a joint venture between the Emaar group and Andhra Pradesh Investment Infrastructure Corporation (APIIC) and is managed by Accor.

The public-private partnership has the Andhra Pradesh state government holding 26 per cent stake in the project with Emaar holding 74 per cent. According to Philip Logan, general manager HICC and Novotel, it is more profitable to have a convention centre attached to a hotel. "The joint staffing with HICC and Novotel helps cut costs," he explains.

However, according to him, the Indian MICE is a slightly immature one. He adds that organising conventions in terms of getting people together and catering to the needs of the participants is not a problem, but India lags behind in terms of infrastructure. Also, incentives, which is potentially the biggest market in the world, is nearly non-existent in India. "The main problem is that hotel rooms are too expensive in India," Logan explains.

The way ahead

Despite the infrastructural bottlenecks, a few states in India are doing their bit in promoting MICE tourism. Hyderabad and Delhi have already shown the way. The facilities provided at BIEC have helped in attracting a large number of MICE travellers into Bangalore. According to Bannerjee, countries like Germany are increasingly looking at holding events at the exhibition centre primarily because of the infrastructural facilities, which are considered to be on par with international standards.

Various public-private partnerships are also building up to promote MICE in a big way. "The good news is that efforts are underway to pick a few geographies and develop these in public-private partnership. Goa is a good example. The National Capital Region is another. Rajasthan has great potential but needs infrastructure. The upcoming convention centres being developed near the Bangalore International Airport and other places are good examples of increasing importance being attached to MICE as important to spur the next phase of growth in tourism," states Konduru.

He adds that co-ordination between various governments is essential and mandatory to promote MICE the way our neighbours have done. He concludes, "Even within a government, various departments must co-ordinate and work together. Announcements of policies are good basic starting steps, but to realise MICE potential at least to the half-way mark, we need to implement them. I personally believe that private enterprise needs to lead the government here via the private-public partnership model."