MICE: GOING UPWARD BUT FAR FROM REALISING ITS POTENTIAL

India has always been an enthralling destination for tourists from all around the world. Gradually, it is emerging as a hub for MICE tourism as it caters to the need of various segments of tourists due to its varied offerings. With the expansion in the network of airlines operating on the international and domestic routes, numerous new convention centers, hotels and resorts, enhanced transportation system, new communication systems, India is slowly, but firmly, becoming a preferred MICE destination in Asia too following closely on the heels of Dubai, Malaysia and Hong Kong. According to the Association Meetings Market of International Congress and Convention Association (ICCA), India is 25th meetings market with 150 meetings globally. However, in the APAC (Asia Pacific) and Middle East (ME) region India was ranked on 8th position. In revenue terms India ranked 22nd globally and 5th in the APAC and ME region.

The global MICE industry is valued in excess of US$280 billion and the share of APAC and ME is in the region of US$ 60 billion of which India’s share is only 2 per cent. The latest report suggests that inbound MICE segment of India is growing at the rate of 15 to 29 per cent per annum. The conference market in India is valued at about $4.8 billion and is growing at a very fast pace.


Current status of the Industry

MICE industry is one of the fastest growing segments within the tourism industry generating millions in revenues. “Industry predictions indicate that the MICE sector is poised for vigorous growth especially in the Indian market,” Rajiv Duggal, Sr Vice President - Tourism, Hospitality & Leisure, Lavasa Corporation, said. Ranvir Bhandari, Vice President South & General Manager, ITC Grand Chola, Chennai agreed with the fact that MICE industry in India is fragmented. “MICE tourism in India is on a growth path and as the segment matures, all stakeholders, which include the destinations and hotels, will consolidate and it will eventually alleviate,” Bhandari added.

Agreeing with him is Sachin Malhotra, Hotel Manager – Mercure Lavasa Convention Centre, who opined that the MICE industry in India is fragmented, with less specialization than some other established MICE destinations. “India’s MICE industry is still very much in its growth stage, and we are receiving just 1-2 per cent of the global MICE pie. Moreover, the domestic MICE is strangled due to air connectivity and cost barrier. Also, MICE solution available currently in India are predominately in large cities or heavily crowded tourist attractions which makes us offer easy solution to the organiser but makes it difficult for other cities to develop and enhance the basket of offerings,” Malhotra said.

Experts in the industry believe that hotels, DMCs, event management companies, PCOs, airports, airlines, state governments and all other such stakeholders need to come together to form Convention/ Visitors Bureaus to build a platform to increase the option and choice of destination available to suit both the domestic and international MICE event. Balan Paravantavida, General Manager, JW Marriott New Delhi Aerocity, also feels the same. “India’s MICE industry is still in its growth stage, and we are witnessing the emergence of new destinations within the country. We are also seeing second tier cities developing quickly, attracting MICE business from major cities such as Delhi and Mumbai. This is further fuelled by the opening of new hotels with MICE facilities, increasing the focus of DMCs,” Paravantavida added.

Shagun Sethi, Director of Sales & Marketing, Fairmont Jaipur, also opined that India’s MICE industry is in its growth stage, and we are witnessing the emergence of new destinations within the country. “We are also seeing second tier cities developing quickly, attracting MICE business from major cities such as Mumbai and Delhi. We recognise that this will take time but we are confident that very soon India will be a key factor in uniting India’s MICE industry,” Sethi added.

Rajeev Jalnapurkar, CEO, Ramoji Film City, however, has new hopes for the sector from the new government. “Currently, with the stable new government at the Centre, there is an upswing in the market, as the mood of the prevailing business climate looks buoyant.The prospect of Indian MICE industry looks promising with a possibility of a significant rise in the business,” Jalnapurkar said.


Pull factors for MICE

Factors that influence global event organisers to select India as a MICE destination are affordability, accessibility and unique experiences. “Accessibility has improved significantly as more network carriers have started operations into India and there is no shortfall of airline capacity into India. We showcase a diverse range of attractions with each state having its own character,” Karan Anand, Head, Relationships, Cox & Kings, said and added that India may not rank very high in terms of it being a MICE destination, but it has the ingredients to become one.

According to Dipak Deva, CEO, Destination Management - India & South Asia, Kuoni Destination Management, India in itself is an attractive destination due to rich culture and experiences. “The knowledge base for a MICE event is widespread in India. Knowledge sharing is an important aspect for MICE events globally and India fulfills these criteria for conferences,” Deva said. “India has virtually everything a modern conference organiser has on its wish list. Destinations like Agra, Bangalore, Chennai, Goa, Hyderabad, Jaipur, Kochi, Kolkata, Mumbai, and New Delhi are few of the favorite destinations for MICE in the country,” said Rasika Singh, Director of Sales & Marketing Novotel Hyderabad Convention Centre & HICC.


Convention centres drawing good business

Despite MICE being an emerging business segment, convention centres in India are reaping the benefits of the growth in the segment. India Trade Promotion Organisation (ITPO), which operates Pragati Maidan, the most sought after venue in India, is hosting as many as 67 major events in the current calendar year. Two of its subsidiaries Chennai Trade Centre and Trade Centre Bangalore are also following suit.

Private convention centres are also garnering good business. “The Hyderabad International Convention Centre (HICC) & Novotel Hyderabad Convention Centre have executed more than 13,000 event of various sizes in 2013 including APSCI 2013, 34th SICOT Orthopaedic World Congress, Hyderabad Fashion Week 2013 and World Congress of the International Society of Prosthetics and Orthotics & Congress of the Asia Pacific Academy of Ophthalmology among others. The upcoming events in 2014 are IAMCR, 22nd Cochrane Colloquium, ICSE, IOACON & CSI,” Rasika Singh informed saying that the ratio of domestic V/s international events is approx 70 per cent and 30 per cent respectively.

HICC and NHCC will work towards creating a synergised approach and a platform for networking opportunities with partners, associates, clients and International associations. While HICC is now established venue for the MICE, the newly launched Lavasa International Convention Centre (LICC) is also getting a good business from the market. “In 2013, more than 200 conventions were organised that included business conventions, product launches and residential weddings,” Duggal said, adding that 2014 has had multiple been movies been shot here. Mercure Lavasa Convention Centre is also notching encouraging business.

“The MICE business segment contributed to approximately 45 percent of the total revenue for Mercure Lavasa in 2013-14 and is growing at a rate of nearly 35 percent per annum, with about 60 per cent of the total occupancy driven by MICE last year,” Malhotra said. Ramoji Film City also organized around 200 events of different sizes in 2013 and is expecting a minimum of 10 to 15 per cent growth for the year 2014, Jalnapurkar revealed.


Revenue generator for hotels and tour operators

For ITC Grand Chola, Chennai, MICE is a growing segment and becoming a formidable contributor to the hotel’s revenue as well as occupancy. Pullman Gurgaon Central Park is also witnessing an increasing contribution from MICE. “In 2013, MICE contributed approximately 15 per cent to the overall revenue. This year, we are targeting at least 25 per cent incremental business from MICE,” Saurabh Bharara, Director of Sales & Marketing, Pullman Gurgaon Central Park, said and informed that 90 per cent of the MICE business came from the domestic market. Going a step ahead, Fairmont Jaipur is getting 50 percent of its revenue from the segment. “Last three years saw a strong resurgence on inbound incentive travel and meetings market is also growing,” Sethi informed.

JW Marriott New Delhi Aerocity is also beginning to get the benefit of MICE. “MICE contributes 35-40 per cent of the total revenue. Currently, we host 20 per cent overseas and 80 per cent domestic events at our hotel. In the near future, we expect overseas to rise to 40 per cent while domestic will be around 60 per cent,” Paravantavida said. MICE contributes to 60 – 70 per cent in both revenue and occupancy for Kempinski Ambience Delhi, Shalabh Verma, Director of Sales & Marketing of the hotel said.

“On an average approximately 10 per cent of our revenues come from meetings and conferences which again is expected to rise in the years to come,” said Ashish Rajput, Director of Sales, Courtyard by Marriott, Gurgaon. For Shangri-La’s Eros Hotel, MICE contributes 28 -30 per cent in hotel’s revenue and around 20 -24 per cent for rooms. “We receive 86 per cent of our events from the domestic market and remaining from overseas,” Alok Chakravarty, Director of Sales & Marketing, Shangri-La’s - Eros Hotel, said.

The Met is getting almost 60 per cent of its MICE business from domestic market and 40 per cent from the international market, shared Sanzeev Bhatia, General Manager, The Metropolitan Hotel & Spa, New Delhi.

Big ticket operators like Cox & Kings and Kuoni are also drawing increased business from MICE. “We have a healthy pipeline of events coming up in 2014 though we would not like to disclose the same,” Anand said. Kuoni Destination Management handled about 10 events in 2013 and the same number is planned for this year. “The World Agricultural Forum is one of the larger events we handled in 2013 with 12000 delegates. This year we are doing yet another large event in the same capacity called IAMCR in July,” Deva said. Interestingly, these players are further showing their appetite to draw more MICE business by introducing new marketing concepts.


Challenges galore

All respondents were unanimous that major challenges the Indian MICE sector is facing are lack of infrastructure and air connectivity. “India has a huge geographical reach. This makes the Indian MICE industry uneven and patchy, with less specialisation.
Also, India’s MICE industry is still very much in its development stage. Another major challenge at present faced is the global economic climate,” Duggal said. Bhatia further opined, “The problem is that the MICE tourist or the MICE aggregator is very choosy and a heavy negotiator. So, the challenge is the competitiveness of pricing,” Bhatia said.

Verma opined that the biggest challenge faced by us is no support from the government on taxation for attracting international MICE. “Non-availability of similar support hotels or international convention space within vicinity is another challenge while bidding in for international congresses or huge conventions,” Verma said.

According to Bhandari, better infrastructure, which includes larger convention spaces, is the basic need of the hour to match the growing MICE segment. “Moreover, culturally linking the convention to the destination and key tourist attractions will also help all stakeholders. For example, pre-convention and post-convention tours can be beautifully orchestrated to promote the destination,” Bhandari said.

However, these challenges are being overshadowed by the rapid development MICE related infrastructure in the country. Yes, India is poised positively on the MICE path! India is a heady cocktail of old-world charm and vibrant modernism – and that makes it an uber attractive MICE destination. Moreover, India is the world’s third largest economy and the Indian Inc buoyed by the recent elections are very hopeful and are staring at strong growth trends across industries which will help MICE to grow further.