Defending its crown is Hong Kong, the undisputed business king of North Asia.
The challenger is Macau, with its image of colonial quaintness mixed with legalised gambling. A recent injection of foreign investment is transforming part of the island into a replica of Las Vegas, a known winner for combining business with leisure… a hot mix for MICE.
Here’s how the contenders line up. According to the Hong Kong Tourism Board (HKTB,) Hong Kong welcomed more than 25 million visitors last year, an 8.1 per cent jump over 2005. Results from the first half of 2007 show a similar growth rate of 7.7 per cent with more than 13 million arrivals, more than half of whom arrive from the mainland. The Macau Government Tourist Office (MGTO) posted slightly fewer visitors than Hong Kong at 21.99 million in 2006, but with a far greater growth rate of 17 per cent. Through May of 2007, Macau’s arrival tally reached 10.72 million, a 21.5 per cent leap over the same period last year. Like Hong Kong, more than half its visitors arrive from China.
The tale of the MICE tape shows Hong Kong hosting 296 conventions and exhibitions last year, bringing in around 780,000 foreign visitors, according to HKTB. Compared to 2005, the number of exhibitions soared 41.3 per cent from 55 to 78, resulting in a 30.6 per cent rise in visitor numbers to over 740,000.
However, convention numbers fell eight per cent to 218, and attendance tumbled 40 per cent, mostly due to inflated 2005 figures from two major international events. Meeting and incentive data was not available.
In 2006, Macau organised 31.2 per cent more international events than the previous year, lifting the total to 360 with 57,000 participants. Association meetings leapt from 129 in 2005 to 162 last year, and attracted nearly 25,000 visitors. The number of tradeshows and exhibitions eased ahead 4.2 per cent in 2006, but attendance soared 117 per cent. MGTO statistics indicate the incentive trade is its strongest growth segment with 14 groups last year up from five in 2005.
At a glance, casinos appear to be the powerful magnet behind the big leap in Macau’s MICE traffic, but industry insiders tend to disagree. General manager of MV Destination Management Limited, Clemson Lo says: “I don’t think it is the casinos that attract our clients. It’s more the facilities, overall cost and the government’s support that draws attendees.”
Senior vice president of CMP Asia, Michael Duck’s sentiments are similar.
“I know of very few exhibitors who come to Hong Kong and then go gambling in Macau. Most business people are cautious with their money by nature, so is it a lure? Sure, but will they spend as much money as the VIP gamblers? No,” Mr Duck says.
A bigger temptation may be the Cotai Strip project, the highly touted Las Vegas replica, which begins to come on-line this year. Its anchor is the US$1.8 billion, 32-storey Las Vegas Sands Venetian. The property boasts 3000 suites, a 111,484 square metre exhibition hall and a 15,000-seat arena. When the entire strip is complete it will offer 20,000 rooms and 92,900 square metres of additional convention space.
Surely this mass development implies Macau is a blossoming MICE destination and poses a threat to Hong Kong, but Mr Duck disagrees.
“Macau’s MICE industry has not ‘blossomed’ yet, so it’s an unknown,” he says.
“There is no doubt that the investment that has been put into the industry will have an effect. Usually such investment stimulates industry and therefore it stimulates interest in the region.”
Mr Duck views this regional appeal generated by Macau as a plus for Hong Kong. He reasons that even if meetings occur in Macau, the businesses will be set up in Hong Kong, which “has a strong legal track record for rule of law, freedom of movement and people have confidence in Hong Kong’s financial and commercial systems”.
Mr Lo segments MICE when analysing his position.
“I don’t think Macau will take away too many exhibitions and incentive travel business, but it certainly will take away some of the conference and corporate meeting business,” he says.
“Ten to 20 per cent of my conferences are now covering Macau. I think this percentage will grow to about 40 to 50 per cent in the next five years.”
Rather than a threat, Macau could be viewed as a potential partner in creating a single regional MICE destination in which both SARs play a role.
According to Mr Duck, and backed by a Hong Kong Exhibition & Convention Industry Association report released in early August, Hong Kong has a firm grasp on the exhibition component.
“It’s important to understand that exhibitions are recurring annual events and so annually bring people together to the same place,” he says.
“The ‘M, I and C’ are usually itinerant in nature and so are not as attractive in the amount of income for Hong Kong… and it’s very difficult to get a handle on the figures.”
Even without solid statistics, Mr Lo remains optimistic for Hong Kong’s MICE future.
“There is still big demand; still a guarantee for success. The problem is the lack of facilities,” he says.
MICE facilities are soon to be the least of Macau’s worries.
MGTO deputy director Maria Helena de Senna Fernandes says, “As of 2007, we are taking another big step forward, and can take our place as one of the best-equipped and most modern MICE cities in the world.”
Ms Fernandes says with the opening of the Venetian and other high-end properties this year, Macau will have 18,000 rooms, a number that will skyrocket to 28,000 next year and 50,000 in 2009.
The speed of Macau’s expansion leads to questions of oversupply, but all of the city’s new MICE venues had pre-booked events before construction started. In the long term a wealth of rooms and waiting conference space will keep costs down, far lower than Hong Kong, and this is music to organisers’ ears.
But the battle starts now, and upstart Macau’s Cotai Strip is ready to rumble with its tried and true Las Vegas approach and new MICE strategy. Meanwhile, the venerable Hong Kong will rely on the fundamentals that has carried it this far.
Will there be war in the Pearl Delta or will cooperation lead to a super MICE destination? Only time will tell.
• A major battle is brewing between Hong Kong and newcomer Macau for MICE business.
• Hong Kong welcomed more visitors in 2006 to Macau but Macau has had larger growth compared to 2005.
• Hong Kong had more exhibitions in 2006 but less conferences than in 2005.
• In 2006 Macau organised more international events than in 2005 (a 31.2 per cent jump).
• Industry insiders disagree that casinos are responsible for Macau’s MICE growth.
• Hong Kong lacks facilities, according to insiders.
• Developments in Macau could result in an oversupply of inventory.
• The interest in Macau is a plus for Hong Kong.
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