Tuesday, August 16, 2022

Attracting MICE


Macau saw a 62 percent spike in MICE visitation in the first quarter, helped by government subsidies, though the territory still faces considerable hurdles to reach its full potential as an events and exhibitions destination.

Macau has lost out to regional rivals due to a lack of hotel capacity, limited venues, poor transport links and a branding problem. These problems are gradually being addressed but progress is slow.

“We haven’t been able to make a shift of Macau’s brand image from a gaming destination. We have made small, incremental shifts, but I don’t think we’ve made a fundamental leap, what we would need to do to bring in any substantial type of MICE industry,” says Glenn McCartney, associate professor in International Integrated Resort Management at the University of Macau.

“We have to think about, what is the message of the Cotai Strip, the destination. And we haven’t got it yet,” he added, noting the same question was asked in 2008, when the city’s MICE industry was first taking shape.

During 2016, the city welcomed 1,276 MICE events, drawing 1.72 million participants. This was up from the 1,263 events in 2015, but down in attendance from 2.56 million participants seen that year, and the over-two million seen in each of the previous two years.

In Q1, there were 366 MICE events, up from 191 in the same period of last year. Sands China President Wilfred Wong said at G2E Asia in May that his company has seen a strong increase in delegations scouting out Macau as new destination.

The gains have been largely due to the efforts of The Macao Trade and Investment Promotion Institute (IPIM) which heavily subsidizes the sector, with the majority of its fourth quarter 2016 budget going towards supporting MICE events. It was also recently put in charge of coordinating MICE industry development, according to the Macau Government Tourism Office (MGTO), which is the body responsible for promoting Macau’s image internationally.

IPIM said it has been specifically targeting Asia Pacific rotational conferences that have not been to Macau before, plus international conferences in industry sectors such as technology, creative industries, finance, tourism, leisure & hospitality and education.

Macau has 190,000 square metres of exhibition space and 37,000 hotel rooms, which are expected to expand to 48,000 in the coming years with new capacity opening on the Cotai strip. Still that’s far short of the average number of rooms of about 100,000 in other major Asian destinations.

Room rates have eased with the added capacity, but they are still high compared with other venues with a large concentration of luxury hotels. There was a 2.4 percent drop in the average room rates in the city year-on-year in the first quarter  with an average occupancy rate of 85.4 percent, up 6.4 percentage points. .

The MICE business at present is heavily reliant on Sands China, which has 90 percent of total capacity, mostly in its Venetian and Parisian properties. But with the opening of new Cotai resorts, there are other options.

MGM Cotai, the next integrated resort to open in the second half of this year, recently gave details of its 2,850 square metres of ‘versatile’ meeting space and 2,000-guest theatre.

Creating a space that “allows us to provide many different activities,” was the goal, says MGM China CEO Grant Bowie, specifying “headliner acts, MICE, product launch, production shows, cabaret entertainment and potential uses of educational development as part of our MICE incentive and convention business.”

Nearby competition includes Melco Resorts & Entertainment’s Studio City which boasts 4,000 sqm, together with a 1,820 sqm ballroom.

The real game changer for the MICE industry in Macau is expected to be the opening of the new Hong Kong-Zhuhai-Macau bridge, which is expected to open next year. This will provide direct access to the Hong Kong International Airport, which has a capacity to handle 68 flights per hour and links to over 190 locations worldwide, 42 of which are in Mainland China.

Bowie said the airport connection “will be particularly relevant for the MICE industry,” as it’s an “easy hub distribution airport”.

IPIM calculates the trip between the cities on the 35-plus-kilometre bridge will take about 30-45 minutes, compared with the 70 minute ferry ride.

Though McCartney says that even here, the government is missing an opportunity. This connectivity is not being actively promoted in Hong Kong or to the celebrity bloggers in China, with their millions of followers.

It may also prove a double-edged sword, making it easier to MICE visitors to hop back to Hong Kong once the event finishes, rather than staying on in Macau, with its limited range of entertainment options.

One return visitor is Andrew Jones, Chairman of the Pacific Asia Travel Association (PATA), which will hold its annual travel mart in September.

He says the government, in cooperation with the private sector, has put together a strong offering to create a very inviting, easily accessible, manoeuvrable and safe environment. While the conditions exist, Jones notes that: “these days it is about creating unique content and experiences and sharing those (storytelling), that will attract the MICE organizers and clients.”

 

 

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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