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EVENTS

The Great Indian Small City MICE potential!

India MICE Micepoint

The story so far! In an electoral year, the pundits continue to scream ‘disaster’ on losing employment opportunities amid the GST, demonetization, fluctuating oil prices, the high cost of imports, etc. What has stood out is an industry which has been notorious for being accused as simply one of ‘under-performing’. The Indian hospitality industry is adding more inventory than ever before. With the new entrants primarily from the real-estate domain, who’s new found love to create wealth, go multi-utility and don the Hotel Owner hat and hope they play the ultimate host!

While major cities still continue to hog the headlines in terms of inventory being added, the tier-2 and tier-3 cities are the ones grabbing the action! Realty consultancy JLL India indicates that over the past two years, top-notch hotel chains, domestic and international, are mushrooming in a surprising new segment: Tier 2 and Tier 3 cities.

 The study shows that cities such as Bhubaneswar, Ludhiana, Itanagar, and Nagpur are witnessing a spurt in the construction of big hotel chains. In 2016, 40 hotels signed up to launch properties in Tier 2 cities. In 2017, twenty more companies invested in smaller cities. And by 2018, the total tally of hotels being set up in the Tier 2 segment was 65. Total room counts across sixteen Tier-2 cities went from 4,465 in 2016 to 6,113 in 2018.

Karan Rahan, Senior Associate, Hotelivate, told in a recent interview that said approximately 50 per cent of the supply pipeline of rooms will come up in tier 2 and tier 3 cities such as Lucknow (1,200) Agra (1,200), Kochi (1,100), Udaipur (1,100), Dehradun (900), Vijayawada (900), Varanasi (700), Guwahati (700) and Gorakhpur (400).

 The realty boom continues to add to the semi-urban growth story in India. According to JLL, the retail sector is estimated to grow to Rs 1 trillion by 2020, at a compound annual growth rate of approximately 12-15 percent. Malls have seen investments of over $ 750 million in 2017, almost double of what the segment saw in 2016. The retail sector in Tier-2 and Tier-3 cities has witnessed a much higher investment of $6.2 billion between 2006 and 2017, as against $1.3 billion of the same in Tier-1 metro cities during the same period, according to a CII-JLL report.

One of the key drivers is the UDAAN (‘Ude Desh Ka Aam Nagrik’) scheme offered by the Govt. of India, where tickets are being subsidized at re-activated airports and a growing economic spotlight. 235 routes cleared by the Aviation ministry cover 16 unserved and 17 under-served airports and six water aerodromes. There are 50 airports which are already being served and will be connected to these under-served and unserved airports. The winner of the bid gets a three-year exclusive right to operate flights on the route. The fare for half the seats in a flight is capped at ₹2,500 for an hour of a plane journey of approximately 500 km and a 30-minute helicopter journey. The selected airline provides 50% of the flight capacity – with a minimum of 9 and a maximum of 40 seats for planes and a minimum of 5 and maximum of 13 seats for helicopters.

With increased purchasing power, the advent of bigger brands into tier 2 and tier 3 cities seems a natural market acquisition process. As more event management companies take flight in smaller cities, the realm of booking technology for events has also exploded. The event and movie booking App, Townscript (A BookMyShow-owned DIY ticketing platform) has been seeing phenomenal growth. Townscript is now looking to move beyond urban cities and focus on expanding aggressively in tier 2 cities. One-and-a-half years ago, tier 2 cities contributed to only 10% of Townscript’s total tickets sales, which has now increased to 33%. Townscript is looking at increasing this further by entering more markets and expand its presence to towns such as Jaipur, Patna, Kochi. The App helps event organizers to go live within 10 minutes. Having the world’s lowest Mobile data charges, the cheaper access to technology has catapulted this genre. With events generating higher profitability than movie tickets, the scope to delve further into this market is a natural upswing! Even the Food delivery App ‘Foodpanda India’ has smaller cities and towns contributing over 40 percent to the company’s business in the country.

According to a report by India Brand Equity Forum, Indian media and entertainment (M&E) industry grew at a CAGR of 10.90 percent from FY17-18; and is expected to grow at a CAGR of 13.10 per cent to touch Rs 2,660.20 billion (US$ 39.68 billion) by FY23 from Rs 1,436.00 billion (US$ 22.28 billion) in FY18. While the events and activations industry in India is expected to cross Rs 10,000 crore mark by 2020-21, as per an Ernst & Young – EEMA (Event and Entertainment Management Association) report. The industry, which was at Rs 5,631 crore in 2016-17 overall, has been growing at a 16% CAGR, even overtaking the Indian media and entertainment (M&E) industry, which is growing at 11-13% CAGR.

When smaller cities vie for action, meeting spaces continue to add opportunities in terms of weddings and social gatherings, corporate sales conferences, Product launches, etc. The country simply loves to celebrate! With made-to-order occasions created out of thin air or a six-month-long meticulously designed wedding, hotels in India never had it this good. The Indian hospitality industry’s unique revenue trait, where Food & Beverage contributes more to the revenue kitty than the segment is credited. The Meetings industry’s mite seldom goes challenged with the discerning Indian finds more occasions to celebrate! Events to celebrate anniversaries, birthdays, kitty parties, family and friend’s get-togethers, naming ceremonies and of course, the big fat Indian wedding all bring cheer to the table!

Trying to adopt a Hotel management model, where the focus is primarily on room sales will spell disaster for the owner-driven hotels in the country. Speaking about the new era hotels that seem to be flooding the market with imported standards especially from Europe and US, who seem more interested in getting to the magic number of 100 properties in India, than creating a right variation to their product to suit the Indian market. Service and amenity standards currently being enforced in the name of global parity is absurd. There have been investments made in crores to create a profitable entity, and have left Indian hoteliers in the lurch, not necessarily due to the economic situations we endure.

How do you explain to a prospective client, who wishes to book a hotel for his residential conference or wants to host his big fat Indian wedding, that he can take his room business, but has no venue to host the banquet! Indians, by trait, need an excuse to get a gathering on to host a lunch or dinner! The scorn for Food and Beverage sales is not justified, when in India, sometimes F&B sales constitute up to 50% of revenue. It should do well for hotels to broad base their client profile. Every hotel in the three – four-star range should have meeting spaces of a minimum of 3000 square feet. 

The idiom that India lives in the villages is out of place when the villages vie to become towns and towns aspire to be recognized as a city! The progression seems natural and the need for quality hospitality and event spaces is aspirational, to say the least!

What Prime Minister Narendra Modi says

“India is a young country where 65% of the population is aged less than 35 years, and we are enabling them to think of innovative solutions. Further, we have tried to localize the start-up innovation culture and you will be surprised to know that till now 44% of the start-ups are found in Tier II and Tier III cities, today. These start-ups have been founded across the 419 districts of India. Moreover, almost 45% of the start-ups are founded by women entrepreneurs.” 

CONFERENCES & INCENTIVES

OYO UAE reports double-digit growth in MICE visitors in 2019

OYO Hotels & Homes, South Asia’s largest, has seen a double-digit percentage rise in trade visitors within the MICE (Meetings, incentives, conferences and exhibitions) sector within the first two months of 2019. The company is currently one of China’s top five, and the world’s fastest-growing chain of leased and franchised hotels, homes and living spaces. OYO established its footprint in the UAE in the first half of 2018 and has already served close to 120,000 guests from 80 plus countries in 20+ hotels located across five Emirates and 40 homes in Dubai. OYO currently manages 1300+ exclusive rooms across Dubai, Sharjah, Ras Al-Khaimah, Fujairah and Ajman.

As per reports, the trade exhibition industry in Dubai saw over 500,000 visitors last year in addition to the regular leisure tourists.

“We have observed a significant increase in trade visitors since the start of 2019 due to the busy events and exhibitions sector in UAE. Dubai’s MICE industry is currently growing at a rapid pace and leads in several aspects when compared to other global MICE hubs such as the US, UK, Europe and the Far East. On the other hand, we are confident of also seeing a spike due to the highly active sports industry,”said Manu Midha, Regional Head, Middle East, OYO Hotels & Homes.

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EVENTS

Singapore roots for Indian MICE market

With a track record of hosting Asia’s most prominent events, Singapore continues to deliver innovative solutions for the transfer of knowledge, ideas and connections to drive new possibilities for the Meetings, Incentive, Conventions and Exhibitions (MICE) sector in Singapore. Singapore has been recognized by the World Bank as one of the easiest places in the world to do business (Doing Business 2018 Report, World Bank) and was named the Best BTMICE City at the prestigious TTG Travel Awards in 2018. While Singapore had welcomed 2.46 million BTMICE visitors in 2017, the city saw 1.3 million BTMICE visitors in the first half of 2018.

Kicking off its first MICE-focused event for 2019 in India, the Singapore Tourism Board (STB) organized a MICE thought leadership seminar in Mumbai on the theme, ‘Meetings & Incentive Travel to Singapore – Forging New Possibilities.’ The program included a keynote presentation by Gokul Bajaj, Head of Sales and Partnerships at Cvent, a cloud-based enterprise event management platform with solutions to optimize the entire event management value chain. A panel discussion followed on the topic of “How can the MICE industry leverage technology to better engage their audience?” Gokul Bajaj,  Aikta Tyagi, Vice President & Head of Special Events at Amway India, SD Nandakumar, President & Country Head – B2B for SOTC Travel Ltd formed the panel. The discussion was moderated by GB Srithar, Regional Director (South Asia, Middle East, and Africa), Singapore Tourism Board.

A team-building activity focusing on Lego Serious Play, conducted by Ludovic Odier, the CEO of Outdoor in Asia, highlighted innovative, high impact and experiential team engagement activities possible in Singapore for M&I travelers. The attendees were updated on new MICE venues, incentive schemes provided by the STB and diverse and exciting array of experiences available in Singapore for M&I groups. The program was well attended with 150 Indian travel agents and 40 Singapore stakeholders representing hotels, airlines, attractions, Destination Management Companies (DMC) and cruise operators.

Speaking on STB’s efforts to showcase Singapore as a destination of choice among the MICE travelers, Srithar, Regional Director (South Asia, Middle East, and Africa), Singapore Tourism Board said, “India continues to be a key source market for MICE travelers to Singapore. Thanks to the support of trade intermediaries and corporates, we have witnessed healthy growth in Meetings and Incentives ‘visitorship’ over the past few years. This thought leadership MICE Seminar is relevant, as many in the M&I space are contemplating the role of technology in enhancing their groups’ travel experiences and program. The trade engagement event enabled Indian travel trade to exchange ideas and deepen relationships with the Singapore tourism partners. We look forward to inviting and delighting a good number of M&I groups to Singapore this year.”

Considering all travelers, including MICE, from January to November 2018, Singapore welcomed 1.32 million Indian visitors, a 14.4% increase over the same period in 2017. India continues to be Singapore’s third largest visitor arrivals source market.

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CONFERENCES & INCENTIVES

India’s mega-meeting infrastructure gets going…at last!

micepoint MICE tourism India

Are we in India ready for holding Monster conventions? The clear answer is a very loud no. India, if one considers the competing destinations such as Malaysia, Singapore, Hong Kong, Macao, Indonesia, and China have lost more opportunities to bid for Mega Conferences than others purely on the reasons of being infrastructurally challenged. Living in a country the venerable Maha Kumbh where over at least a crore people congregate once every twelve years is considered an event only the gods can play the ultimate event organizer; mere mortals are left to create an infrastructure regime that seems to fall apart at every second turn! An estimated USD 280 Billion of marketspace out there and we don’t seem to have a will to create a half decent Mega Convention Centre out here! All this is about to change with the Government’s putting money where their mouths are to upgrade existing pre-historic venues and commit to a new mega greenfield Convention and Exhibition Centre in Delhi.

The Government of India, in all its sudden burst of enlightenment, have finally harped upon creating the country’s largest Exhibition and Conference showcase. With a primetime investment of USD 4 Billion, the ‘India International Convention & Exhibition Centre (IICC)’, occupying an area about half the size of Bangalore’s Lal Bagh. The venue is expected to play host to marquis events such as the G-20 Summit. GoI’s Department of Industrial Policy and Promotion is implementing the project and will be operated by South Korea’s Korea International Exhibition Centre (KINTEX) and eSANG Networks. Thankfully, with the Government deciding on partners such as L&T and Korea’s KINTEX to execute and operate the venue, this will be the gamechanger and catapult India into the world of Mega 20,000 plus delegate conferences. The venue is expected to have a massive exhibition space of 200,000 Square Metre and a 60,000 Square Metre in meetings and conventions space. The venue will also include 3,500 hotel rooms for delegates. Also, the multi-purpose arena in the venue will have a seating capacity of around 20,000 people. The complex will have a 30,000-vehicle car parking.

The Indian Convention & Exhibition Industry’s grand old lady ‘Pragati Maidan’ is poised to get a make-over and being redeveloped into a world-class Integrated Exhibition Cum Convention Centre (IECC) at a cost of Rs. 2254 Crores and the first phase expected to open by May 2019. The project will be updated to 1.19 lakh square meters of exhibition space against the present 65,000 and will get a Convention Centre for 7,000 people. The venue will also include a hotel complex to be built on a 3.7-acre plot within. Presently run by the ‘India Trade Promotion Organization’ which wear any hats such as an Exhibition Organizer, a trade body and venue manager all rolled into one. Hopefully, this will change its domain as the multiple ‘conflict of interest’ purporter! Changing times sure needs a more professional and expert set-up, than the current management practice who are living ‘sublime nirvana’ since the early 1970s.

India as a host and a probably the world’s most diverse destination backed with a growing economic might will ensure business opportunities seldom seen in the region. The past hubris against mega projects especially in aid of the tourism industry has died down. Convention Centres such as this will fuel a complete eco-system that generations will thank.

Was indeed surprised to note the Government’s initiative to use the building of Convention centers across 21 African Nations as to further the growing diplomatic connect. Who would have thought about a few years back, that India would actually recognize the Convention Centre industry as a sunrise industry!

Asia accounts for a mere 14.3% of the Meetings market in the world and, and India’s share accounts for just 4.9%. In comparison, China accounts for 68% of the Asian share in MICE business and trails only the US in the market globally. In terms of Meeting infrastructure, China has 92 purpose-built exhibition sites spread over three million square meters. India has just 12 exhibition venues that occupy barely 2.6 lakhs Square Metre of space. India is 40% of China in terms of the size of the economy, but in the exhibition’s infrastructure sphere, we are only 9 percent of what China does. Germany on the other extreme has over three million square meters of exhibition space, which considering India’s exhibition industry, is on a different planet altogether!

With longer gestation periods, no Convention Centres make money on the quick run. It is the City Municipal Corporation, to ensure, we create world-class convention facilities. With increased footfalls, increased tax revenues and adding a new employment engine, the city eventually benefits more! The Indian industry, irrespective their sectors, and verticals need quality meeting infrastructure. The current ‘Make in India’ mania is useless if we do not have avenues to display and exhibit to a global audience. Any place, which houses an airport should have a minimum 30,000 square feet of multi-use Convention Centre as part of the City’s infrastructure.

The advent of International Exhibition companies into India has got the industry tremendous respect and enhanced its professionalism. With the marked increase in the number of stakeholders using the exhibition medium, the industry is only poised to grow! As much it will benefit the allied services such as the hospitality, car rental and travel industry, the industry across various sectors are deemed to be the primary beneficiary.

When the global exhibition and trade-show industry is a USD 65 Billion industry with over 31,000 major events taking place and the Indian space is estimated to be worth at Rs. 65,000 Crores with over 700 shows, how can the Indian travel-industry be far behind! The ‘Indian Convention Promotion Bureau’ states ‘Of a total of 8,294 events tracked, India has a market share of 1.1% (Asia & Middle East has 19.5% share) with an estimated size of the MICE industry in India around Rs 4,000 – 5,500 crores. Still a minuscule part of a global market space of over USD 65 Billion!

Even cities like Mumbai and Delhi have no world-class event facilities. Making do with present Event infrastructure and current permissions and license regime required to organize trade-fairs is time-consuming and a sure dampener. The industry should demand a single window agency as procedures are getting more tedious than ever before. Venues should assist in permissions and here the efforts of Chennai Trade Centre are adulatory!

Being part of the Travel Event industry, it is quite mandatory for us to be at various events across the world. The quality of the event infrastructure had always been a point of envy. Most International travel events across the world also enjoy tremendous patronage from the National Tourist Organization and Government bodies, which they see as a booster to their economy and the sure wind beneath their wings!

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