Meetings make money

Despite shrinking corporate budgets reducing demand, MICE-driven business is still critically important to boosting the bottom line of the region's top hotels, as Andrew Kennedy discovers.
Meetings make money
By Andrew Kennedy
Wed 24 Dec 2008 04:00 AM

Despite shrinking corporate budgets reducing demand, MICE-driven business is still critically important to boosting the bottom line of the region's top hotels, as Andrew Kennedy discovers.

With the global financial crisis looming over the Middle East, companies are inevitably wondering where they should look to get them through the tough times if and when they arrive.

One area that is being looked toward to provide a solid base is the lucrative MICE sector. For many hotels in the Middle East, in particular the UAE, MICE is the mainstay of their business, but to maximise revenue they are looking to diversify when it comes to what they provide for MICE clients.

For many hotels in the Middle East, MICE is the mainstay of their business.

One trend that is starting to appear is the hotels looking to combine the leisure and corporate businesses. Grant Thornton Hospitality and Tourism Consulting general manager Grant Salter has been in the industry for more than 30 years and was employed by Al Ain Wildlife Hotel and Spa Resort last year to conduct market studies and feasibility work into the growth of the resort.

Salter has studied the corporate market around the world and how it has become a key component in the hotel industry, but he has identified that there is a demand for meetings and incentive facilities across the wider leisure industry.

"Dubai's meetings and incentive market is looking for somewhere to go," says Salter. "Given its proximity to Dubai, Al Ain is appealing to the city's breakaway corporate market for meetings and conferences, and the wildlife park provides something out of the ordinary."

This has led to the development of a new conference centre at the resort, with a planned opening date of 2009. The centre will be separate from the resort, but linked by a tunnel, which enables the MICE packages that will be offered to combine the two aspects of the business facilities and the extensive leisure facilities of the resort.

Packages are likely to include early-morning and lunch-break wildlife tours, safari, night drives, functions set in the bush, wildlife-themed events and buffets outside the typical conference environment.

Salter says that as well as the immediate benefits of this, there are longer term benefits that may stem from this combination of facilities, with MICE guests more likely to return as leisure guests with their families after experiencing the leisure side of the resort themselves.

This is not a new idea to some hotels however, with some business orientated hotels such as the Courtyard by Marriott Dubai Green Community, having looked at that from opening. Their approach is that of offering to extend a corporate client's stay if they wish some leisure time too.

"It happens a lot that delegates of a conference have little time to enjoy the leisure facilities of the hotel or to go out of the city. Therefore if any guests attending a conference or meeting would like to extend his or her stay even after the conference, we are more than happy to offer them the group rates or a special rate for their extension if they extend over a weekend," says Howard Liem, Marriott cluster PR and marketing executive.

This combination of leisure and corporate business is also being exploited elsewhere. The Four Seasons in Doha is making use of the small, compact nature of the Qatari city to combine the two sectors.

"Doha is largely a corporate destination and uniquely as a business hotel we have a private beach and a spa and wellness centre built over three levels, which is different for a business hotel to offer so many leisure facilities," says Simon Casson, general manager of Four Seasons Doha.

This is speculative by Four Seasons, with Doha being a largely business orientated market currently, but they are optimistic this is set to change. "The market in Doha is 95% corporate, but there are signs that the leisure area will grow here, there has been a lot of growth of tourist infrastructure and as that grows the tourism will come."

"That's why when building a business hotel we built it with significant leisure facilities too so that we can capitalise as the tourism grows. We are seeing a lot of stop-over business that leads to some leisure business already," explains Casson.

Four Seasons is also looking to the differences between Doha and Dubai to play to its advantage in the MICE sector. Casson explains that the financial crisis is yet to hit Doha and feels that because of the somewhat insular nature of the city, the city will feel the effects far less than its UAE counterpart.

"To some extent we are protected a little from the dramatic downturns we see elsewhere because Doha is seen as a little isolated compared to many of the other areas in the Middle East and as Qatar is relatively a small country with very high revenue and differently to Dubai it has very little debt so we are more protected."

"The country is not immune however, as we are of course part of the business world and we have seen the effect on other companies," adds Casson.

Four seasons is looking to the differences between Doha and Dubai to play their advantage in the mice sector.

Four Seasons hopes that this will be an attraction to MICE clients, as well as the cheaper prices for meetings and incentive events, especially compared to Dubai.

This does not mean that the MICE sector has yet seen a big decline in the UAE however. Four Seasons itself is still seeing a strong market across the Emirates, as Jane Burnell, regional director of sales for the EMEA region comments.

"UAE has a strong meetings and incentives business and we are still seeing this growing currently, and we are keeping an eye on that with a dedicated sales team looking at the meetings and incentives business especially in Dubai, though we are not taking anything for granted and really keeping our eyes on the ball to see what might happen," she says.

"We have seen a new trend of third party incentive agencies starting up [in the UAE] and business is growing."

"I think it's more of the Western influence of incentive travel and meetings that have started to influence the UAE a lot."

Despite this, Four Seasons is not standing still and realise the need to expand their business while the market is still relatively stable in the region.

"I think the finance is still there for the corporate travellers, but I think that we need to diversify our business slightly and not just look at the finance houses and investment houses, but look more at the automotive industry, pharmaceutical industry and the IT industry too, as these are all very important to us, and will become increasingly so," Burnell explains.

Private eye

One trend that is appearing in the MICE sector, especially with regard to these industries, is the request for privacy for the meetings and events.

 Private and secure meetings are a crucial factor in attracting MICE guests, and as a consequence hotels and event companies have had to prove they are willing to go to great lengths to provide a truly private event in order to secure meetings planners' business.

There are generally certain types of client who traditionally require privacy in the Middle East, according to director of events for InterContinental Dubai Festival City, Robin Stewart.

"Privacy has always being a major factor in selecting the venue for a meeting or conference, initially with competitors traditionally in the banking sector and pharmaceuticals," he explains.

Stewart said that companies take it extremely seriously, and some often will not sign with a venue unless it can be guaranteed that a competitor is not using the same hotel.

"Sometimes it goes as far as the meeting space, sometimes it can go as far as who is staying in the hotel. We obviously don't disclose any information about names, but we will have to turn down a piece of business because a competitor has already confirmed with us," he says.Many hotels operate a member of staff on the door outside the meeting room to ensure no unauthorised entry, which may seem excessive, but clients for many venues are expecting this: they are paying five star rates for a meeting room, so they expect five star service.

Just as leisure guest may be waited on for his or her every whim, corporate guests expect the same for their needs.

"When you break down the components of what a client is actually paying for, they are paying for a piece of private real estate that they can rent on a short term basis to conduct a meeting," says Stewart.

Privacy has always been a major factor in selecting the venue for a meeting.

The hotel provides the food and beverages, but they also must provide the provisions for the meeting or event to be private.

This security and privacy concern has impacted upon the way MICE business is planned. The traditional routines have been changed in order to accommodate the privacy needs of many companies.

Sales and marketing colleagues used to be the ones to visit the property in advance of a MICE booking, but first of all there is often a detailed conference call with the planner and the events manager from the property, and usually the security manager before a client even sets foot at the hotel or resort.

"On a number of occasions large multi-nationals have sent an advance party - not its sales team, but the security team - to check everything out, from the level of floor they are on, to fire exits, to the privacy of the meeting rooms," Stewart explains.

The security does not simply stop at the privacy of the actual meeting itself, but the end product of the meeting too: all charts, sheets and notepads can be disposed of in a secure manner, or alternatively the documents can be shredded fully.

The high-level nature of many of the MICE events that take place at the InterContinental in Festival City even dictates that it offers a service to get rid of unused sheets of paper that may contain pen imprints.

This is the other side of the MICE industry - many things associated with MICE is about showing off a product, meeting or event and wanting as many people to take notice as possible.

But as this security conscious approach demonstrates, the meetings industry has a quiet and discreet side that is just as important to both the companies involved, and the hotels and resorts that hold the events.

And according to Stewart, the demand for greater privacy is a trend that shows no signs of abating in the near future.

"Hotels are being used more because of the big changes happening within companies, where the management can't hold meetings inside the company offices - staff know that if x, y and z are meeting,something big is being discussed."

The MICE industry appears to be as vibrant as ever in the Middle East, even in the uncertain times of global financial crisis. However it is clear that hotels and resorts in the region need to pay attention to clients' needs in ever more increasing detail - and indeed they appear to be doing just that.

As Howard Liem confirms, MICE business is one not to be missed out on: "Any business opportunity or request will be given full attention to either get it confirmed, or if not, cross sold to any of the Marriott properties for the revenue to remain within the company".

Hoteliers also appear to be realising the need to adapt their remit and their hotels facilities to cater for both MICE guests and leisure guests, and to attempt to combine these two revenue streams. In the long term this might prove to be a good move, whether the financial crisis has an affect on the habits of either type of guest or not.

For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.