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Monday, 08 December, 2014, 10 : 00 AM [IST]

Opportunities and Challenges in Tourism in India - MICE

The travel and tourism industry has emerged as one of the largest and fastest growing economic sectors globally. The growth in the Indian travel and tourism industry is driven by a combination of rising income levels and changing lifestyles, development of diverse tourism offerings, and policy and regulatory support by the government authorities. Over the past year, this growth has reflected over all segments of tourism. TravelBiz Monitor speaks to industry experts about the top Opportunities and Challenges they currently see in individual segments of Inbound/Domestic Tourism, MICE Tourism, Outbound Tourism, Aviation, Hospitality and in the rapidly growing Online Travel Agents’ (OTA's) space. This is the first part of the two series of Opportunities and Challenges in India Tourism


Opportunities:
  1. Greater cost control and increased compliance
  2. Increased growth potential for mid-priced hotels
  3. Improvement in economy
  4. Indirect source of revenue for other travel components
  5. Growth in domestic and regional meetings
Challenges:
  1. Need for upgrading facilities for MICE
  2. Budget constraints
  3. Need for innovation in offerings to MICE clients

om_prakash_sahgal_id_1.jpg
OM PRAKASH SAHGAL
Director,
In ORBIT Tours Pvt. Ltd.

MICE is important for the tourism boards of various countries to attract events. The segment provides helps earn revenues for airlines, convention centres, hotels, restaurants, media, manpower, other modes of transportation, and many more avenues to promote host countries, and to drive direct benefit.

Participation in MICE events provides major opportunities to motivate achievers, be they dealers, distributors or in-house staff. It gives sponsors the benefit of the right audience or captive audience to whom they can convey their message most effectively.

The participants also get the opportunity to understand the importance of the sponsors’ projects and the various incentives that are offered to participants.

In the broad MICE segment, the sub-segments of Meetings and Conventions continuously face challenges. The major challenge is that of upgrading facilities for the two sub-segments, flight connectivity, and competitiveness.

For the travel trade, the Internet has opened Pandora’s box. Corporate Incentive groups are doing their homework with the help of online information. This leaves little scope for tour operators.

steven_smith_id_1.jpg
STEVEN SMITH
Senior Director, CWT Meetings & Events,
Asia Pacific

One of the opportunities of the MICE segment is that strategic meetings management places rigor on establishing and managing policies and procedures for travel, bookings, payments, authorisations, and approvals. With the right mix of end-to-end technology to generate data for tracking and reporting purposes, it benefits Meetings managers with greater cost control and increased compliance.

There is growth in domestic and regional meetings because of cost-saving benefits due to sharing similar time zones, language and culture, lower risk of cancellations, and focus on strategic sourcing. For instance, an incentive trip in Asia is more cost-effective than that in Europe because of savings like lower airfares and less travel time. We expect mid-priced hotels, specifically domestic, to be more popular in 2015, as companies are increasingly inclined towards accommodation that offers a professional standard of service at economical price levels. There will be increased convergence of live meetings along with videos and social media channels, and lesser focus on stand-alone events. The key question is how events can match the brand and marketing mix of the company, as well as leverage on the company’s digital and social media capabilities.

On the flip side, the Meetings and Events (M&E) industry is the largest area of unmanaged spends and works, accounting to about 2/3rd of the travel budget of most companies. Any development or change on the M&E front will have an impact on corporate travel spend.

Since the global financial crisis, we have seen a few prominent challenges arise in the industry. Meetings involve travel of a large number of people, thereby impacting travel budget. Companies are increasingly careful with planning travel costs. Hence, the trend is turning towards holding local or regional meetings, and making sure that money is spent on the right elements to make meetings as effective as possible.

Historically, there has been little done with respect to guidelines and procedures around management of meetings. We see that this is beginning to change, with compliance increasingly becoming an area of focus for companies as they seek to manage budgets.

With many people travelling for meetings and events, tracking and reporting pose a challenge. Take hotel bookings for instance. Managers need data to understand considerations like whether booking terms are favourable and consistent for the company.

rupen_vikamsey_id_1.jpgRUPEN VIKAMSEY
Managing Director, Orbit Corporate &
Leisure Travels (I) Pvt. Ltd.

Industry predictions indicate that the MICE segment is poised for vigorous growth. Recuperating after the recession, it is springing back, stronger than ever. The demand for Meetings is on the rise and though companies are not splurging, luxury venues are not being ruled out either. In general, there are some emerging trends which have been observed.

Budget constraints have not vanished and purse strings are far from being completely loosened. However, luxury resorts are not out of bounds either. Meetings demand is at its peak since 2008. There is growing demand across all sectors, telecommunications, education and insurance, healthcare, energy, and many more.

The traditional ‘boardroom-style’ space is being replaced by an innovative approach where huge outdoor meeting spaces, smaller cozy nooks for limited gatherings, and different kinds of seating are being requested. The focus is on creating conducive settings and it is no more a surprising sight to see delegates assembled around a campfire or at a bar. The improvement in economy is resulting in slowly increasing prices of meetings. Though value for money is still an important factor, the planners are yielding to prices being a little higher than before.

Venues, which offer creative options for team-building activities, are in demand. For instance venues with options for holding cookery classes, beach-volleyball or golf lessons are attracting more meeting planners.

The improvement in the economy brings with it fierce competition and no company can afford to lag behind in the race for supremacy. Training budgets are being revamped to ensure best-trained sales and management personnel for survival in the competitive global economy. Prospects for the MICE segment look bright. Indeed the changing trends clearly indicate that this segment is making a steady comeback as the Indian economy has started picking up. With the economy improving, there is once again a renewed demand for exhibitions, meetings and events to showcase latest products.

capt_swadesh_kumar_id_1.jpgCAPT. SWADESH KUMAR
Vice Chairman,
India Convention Promotion Bureau

There are many new opportunities available to promote MICE business, especially in the field of Conferences and Convention. India has got mega convention centres and we can now bid for larger conferences. We have new hotels coming up in Delhi and the prices are comfortable and rooms are available. With the new government at the Centre, there is an overall impression that the economy will boom by April 2015. This positive impact will help us face the challenges and move forward for better growth in the industry in the coming months.

The biggest challenge today for the tourism professional in general is to face the perception about India being an unsafe destination for women traveller. All of us need to think how to cope with this crisis as the solution to this problem is very difficult to find. Probably, the Indian government has to do something as it is a great PR challenge. The Incentive traveller, both long-haul and short-haul, has a constrained budget and the challenge for us is to fulfill their needs. For any international conference, sponsorship is the key, but due to budget constraints, it is difficult to find sponsors, which is another challenge for the organisers to meet the expenditure.

 
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