The MICE industry is not immune from the challenging economic conditions facing just about all of the world’s major markets. That’s regardless of whether you’re a meeting organizer, an incentive programme, conference or exhibition.
Throw in the unpredictability of the African market and the ‘up and down’ nature of the continent’s fluctuating fortunes – particularly as currently seen in some of Africa’s biggest economies – and you have a difficult job for those tasked with identifying trends and spotting recurrent themes.
According to Advito’s Industry Forecast, looking at 2016 and throwing forward to this year, “Africa has presented a mixed economic picture. Insecurity and political instability afflict the North, while growth has slowed in sub-Saharan oil-producing nations such as Nigeria and Angola. However, solid growth continues in much of the rest of the continent, and that means travel demand in most countries is firmly on the rise.”
The same source notes that the continent’s airlines are expanding their networks in response to the intensifying demand. Other nations’ carriers – outside of Africa – are also increasing their capacity, with Turkish Airlines “perhaps the most ambitious of all.” It has grown its African network from 13 to 44 destinations since 2009, including secondary markets like Benin and Madagascar. In that way, Turkey’s national carrier has followed the lead set by fellow Middle Eastern carriers Emirates and Etihad.
Reed Travel Exhibitions picks up on this favourable view on Africa in its ‘ibtm World Trends Watch Report 2016’, noting that “the supply of hotel rooms designed to western standards is increasing as chains such as Marriott expand their presence in Africa. Merger partner Starwood is expanding too, with an African pipeline that includes new properties in countries including Ethiopia, Kenya, Senegal and Tanzania. Other global chains, including Carlson Rezidor and Hilton, are also investing in the region, increasing consumer choice.”
“If you look at the considerable development in product (hotels) in Africa, this supports the notion that the MICE market is strengthening in Africa,” says Pauline Wilkinson, Group Sales Operations Manager, Protea Hotels by Marriott & African Pride Hotels. “MICE houses are looking to expand their offering to include tailored experiences for their customers, and this includes options to explore destinations and create more memorable experiences. With more flights into the continent, it has become more accessible to the global traveller. The continent has also seen great investment in infrastructure (better roads, better facilities, improved technology, internet connections etc), which are required to host a successful MICE event.”
The ibtm World Trends Watch Report 2016 goes on to identify additional infrastructural development in the form of the growing supply of convention centres on the Africa continent. Among them, the Centre International de Conférences d’Alger (CICA) is North Africa’s newest and largest venue for conferences, exhibitions, weddings and special events. Opened in the second quarter of 2016, this 270,000m2 facility is situated in the exclusive Club des Pins area of Algiers, and is expected to welcome hundreds of thousands of guests each year.
In West Africa, one could add the Calabar International Convention Centre, which opened in Cross River State, Nigeria in the past 18 months. A bit further east you have the Kigali Convention Centre, which opened in 2016, and which Rwandans hope will put the country on the conference map, whilst at the southern end of Africa, Cape Town’s relatively-new Century City Conference Centre now complements the renowned Cape Town International Convention Centre (CTICC). This development has only strengthened Cape Town’s positioning as an African conference and exhibition venue of choice.
Further to that, the second half of 2017 will see the completion of CTICC’s expansion project. CTICC East is 31,148m2 in extent and will offer 10,000m2 of multi-purpose exhibition and conference space, as well as 3,000m2 of formal and informal meeting space. Facilities in CTICC East will include six exhibition halls, four meeting suites, five meeting pod rooms, two terrace rooms, a rooftop garden and a new coffee shop.
“The expansion will not only enable us to host more events and larger events, but it will also provide us with the flexibility to host large-scale events concurrently,” says Julie-May Ellingson, CTICC Chief Executive Officer. “The expansion will offer more venue options to clients and will provide existing clients with more space to grow their events.”
CTICC and its fellow big South African convention centre players, Sandton Convention Centre (Johannesburg) and Inkosi Albert Luthuli International Convention Centre (Durban), will no doubt look to continue benefitting from the current low value of the Rand, which offers the potential of positioning South Africa as an excellent value-for-money destination.
Whilst South Africa remains, arguably, Africa’s premier conference and exhibition destination, the rest of the continent’s major MICE players are at least making up some ground, if one takes into account some of the developments already mentioned.
“Africa has excellent lodges and international conference facilities to select from,” says Anna-Lize Scully, International Sales Executive for Peermont Hotels Casinos Resorts, which operates 13 properties across South Africa, Botswana and Malawi. “For example, Botswana, Malawi, Morocco, Kenya and Ethiopia. South Africa definitely has competition right on its doorstep. Universities, organisations and companies are also exploring Africa to find niche encounters.”
CONFERENCES
No surprise to hear that cost-cutting is a major theme in the conferencing space, and this was one of the standout responses from those canvassed in the South African MICE industry. That being said, the mood remains fairly positive.
“The MICE market continues to perform well, although cost containment is a major feature in an economy under pressure,” says Zoleka Skweyiya, Sun International’s Group Communications Manager. “But the South African events industry is fairly robust and we continue to be bullish about its sustainable growth potential.”
“From an international conferencing point of view, the weakening of the Rand does help, but this isn’t enough on its own. Convention organisers are looking for superlative value for money and are thinking twice about how much they spend getting to a destination. In this, South Africa is at somewhat of a disadvantage being a long-haul destination.”
The general cost-cutting approach clearly has an impact on what types of events clients are now looking for and accepting are within their budget.
“We have noted that the spending is more conservative (wanting the basics), which also leads companies towards doing in-house conferencing or opting for video conferencing,” says Celeste Schroder, National Sales Manager for aha Hotels & Lodges. “Some companies also opt for same-day conferencing to avoid travelling costs and overnight hotel costs.”
“Clients are more conservative in their requests and opt for the lowest costs. For bigger conferences, clients opt for schoolroom-style seating with break-away rooms. For smaller conferences, they normally opt for u-shape-style seating or boardroom-style.”
Speaking of smaller events, Adriaan Liebetrau has a similar view. He’s the Sales & Marketing Manager for Tsogo Sun, looking after the ‘Sandton Mile’, which incorporates the Sandton Sun, the InterContinental Johannesburg Sandton Towers, Sandton Convention Centre, and the adjacent Garden Court.
“The trends in this sector have been consistent in recent years: smaller conferences, fewer conference days, closer to home venues and less extravagant entertainment programmes,” he says. “In the past, as with the rise in ‘ConfEx’ events, where delegates would attend a conference with an exhibition component, we are seeing more of what are deemed ‘bleisure’ trips, where delegates are combining their business trips with leisure downtime and bringing the family along for pre or post-conference holidays.”
A reduction in spend not only has an impact on what types of events clients are now looking for, but also the types of venues that now come into play.
“There is a huge cutback that we are experiencing from government departments,” says Guy Stehlik, CEO of BON Hotels. “This doesn’t mean that conferences are not taking place, but we definitely note that this market is looking at the mid-market hotels, rather than the properties they previously supported. There is huge competition within the mid-market, which is good for the end-user, but can be dangerous for the hotel market. Within the mid-market South African conference space, we are incredibly reliant on government conferencing. With government budget cutbacks, hoteliers are going to be challenged to find alternative market segments or niches within the market to encourage conference business. Clients will be swayed by price and vote with their feet, which can often lead to a price-cutting downward spiral.”
The Birchwood Hotel & OR Tambo Conference Centre, situated in close proximity to South Africa’s biggest airport in Johannesburg, is one of the country’s largest conference venues and usually a good bellwether of the state of the industry.
Founder and Director Kevin Clarence has just about seen it all before, and whilst he admits that spend is down, he remains positive about the year ahead.
“Based on the first few months of 2017, we certainly can be positive about the current state of the industry,” he says. “The trend of taking delegates away from their own offices to meet and conference certainly decreased in 2016, as so many groups were saving costs. However, in light of the requests that we are currently receiving, we look forward to a change from last year. What is also evident is the need for less traditional set-ups and requests. Meetings and events are breaking away from the norm, and this alludes to the need for clients to make use of external facilities that provide specialized environments with the tools to host such a unique conference or event.”
Consolidation appears to be a by-product of the reduction in spend available.
“Clients are rather combining their requirements,” says Clarence. “For example, where a client used to hold a conference and later in the year, their exhibition – they now combine all of that during their time with us by conferencing and hosting an exhibition in an adjacent venue.”
So, that’s the view on the impact of cost-cutting, but let’s drill down even further and delve more into the actual events themselves, the format, and what clients are looking for in this current climate.
Cape Town International Convention Centre is one of South Africa’s premier conference and exhibition destinations. The CTICC hosted 39 international conferences and 28 national conferences in its 2015/16 financial year, so is well-placed to comment on some of the trends in the conferencing space.
“In conventions, the buzzwords are flexibility and interactivity,” says Ellingson. “According to a trend report by the International Association of Convention Centres (AIPC), conference producers are trying out new conference and meeting formats and are focusing on creating different types of engagement and networking experiences. They want multi-functional, less formal spaces that can adapt to different types of seating structures, new technology systems and digital tools.”
Along similar lines, this appears to be the basis for Sun International launching its SunPark concept in 2016.
SunParks at Sun International’s various properties provide event organisers with a fully scalable multi-purpose facility with an indoor events venue and outdoor space for hosting exhibitions, events, product launches and even music festivals. The key is the versatility. The modular design of the entertainment space allows conference, events, or festival organisers to “plug in” their requirements and change the nature and look of the space depending on their needs and the size of event they’re holding.
“Existing exhibition and conference facilities in South Africa are primarily geared towards major event concepts and there are very few venues which cater specifically – or can be transformed – for small to medium boutique events,” says Skweyiya. This market currently represents well over 80% of all event activities in South Africa.”
“Over the past 15 years, we’ve noted a growing tendency towards boutique and specialised event concepts and brand activation initiatives. We identified a huge gap in the South African conferencing and events industry.”
That’s not just a South African phenomenon, with Marriott also picking up on this theme.
“Meetings planners are conscious of meeting spaces and are looking for greater flexibility to utilise space more effectively for the purpose of the event,” says Wilkinson. “Training venues versus brainstorming meetings need to create the right atmosphere in order to derive the right return on investment in hosting the event. There is a drive to engage with smaller teams in unique spaces, which enhance the interaction between participants.”
Another consistent theme or element in conferencing that keeps popping up is the reference to ‘technology’, which is obviously a broad term that could mean different things to different event organisers. No big surprise that technology pops up, considering our modern-day dependence on all things technological just to get through a standard day and be functional!
So, how is this being applied in the events space?
“Most corporates have started seeing technology as a way to work smarter and more efficiently, and they are looking to their travel agents and MICE organisers to offer solutions,” says Charmaine Chinappan, Sales Executive for Peermont. “One example is that often companies are requesting a more streamlined RSVP system. They want a dedicated website for their event, or even a dedicated app.”
“The diffusion of technology and devices mean that exhibition and conference organisers are demanding flexible technology (including wi-fi), audio-visual (AV) features they can control, and a connectivity offering that caters for a wide variety of devices,” says Ellingson. “Advances in mobile technologies have allowed for a plethora of devices and operating systems.”
Technology can obviously play a role in distinguishing an event from its competitors and possibly elevating it ‘beyond the norm’.
“In conferencing, technology is becoming increasingly important to offer exclusive experiences which are streamlined and memorable,” says Pascale Prinsloo, Marketing & Social Media Creative Coordinator for Tourvest Incentives, Meetings & Events. “Virtual Reality is fast becoming a buzzword offering that ‘Wow’ factor.”
“Customers are continuously looking at ways to enhance networking at their events,” says Wilkinson. “This includes personalised apps, social media and other forms of communication to drive participation. This can expand to pre, during and after the actual event, ensuring amplified communication between participants. There is a larger demand for higher quality bandwidth in order to accommodate larger volumes of traffic on the wi-fi network, which customers also anticipate will be complimentary as part of the event.”
So, that’s technology. What about that other major element that each event can’t do without? I mean, a delegate has to eat.
“Delegates and visitors have become more demanding when it comes to a food experience,” says Ellingson. “As food and dietary trends evolve, there is more pressure on convention centres to not just feed delegates but to impress them and satisfy individual dietary requirements.”
What this often means, it seems, is a greater focus on food that is better for you.
“Food and beverage is leaning towards healthier lifestyle choices,” says Skweyiya. “While fine dining will always be popular, there is a global move towards more casual dining environments that still offer high quality dining experiences.”
“Customers are more and more demanding personalisation in terms of the offering,” says Wilkinson. “The standard tea/coffee breaks are no longer sufficient with sandwiches and cookies. Customers are looking for us to cater to their individual needs, and as such we provide tailored menus and experiences to create atmosphere for the event.”
What are some of the other trends event organisers are seeing in the conference space?
“A lot more break-time during conferences,” says Stehlik. “Instead of delegates cramming activities, networking, meals, and conferencing, we have noticed that delegates are given a lot more free time to rest, prepare their thoughts and network. Also, a greater spacing out of events during a conference day is also an emerging trend, whilst natural light and natural ventilation are also often a request.”
“The ‘kidulting’ trend is making its way into the convention arena and we’ve spotted ice-cream and confectionery stations, colouring-in walls, and other ‘playful’ activities at recent conferences,” says Ellingson.
“Location can also be critical to the success of the event,” says Wilkinson. “Meeting planners are cognisant of how attendees will spend their spare time. If private time is important to the meeting, the location needs to facilitate options for delegates to experience the city or destination they are in. Conversely, there are events where the focus of the event is on team-building and where you don’t want to have attendees leaving the group to do personal activities. Here the location may be more remote, so attendees stay with the group during the event.”
So, what does the future look like?
“Despite a volatile rate of exchange, bookings are expected to remain fairly static with even slight increases in demand on the horizon,” says Charmaine Chinappan, Sales Executive for Peermont. “Unfortunately, we can’t expect massive increases in budgets as a result of the weak Rand. However, a slight increase in budgets is likely and the truth of the matter is that meetings will have to take place in the corporate and local government industry. Lead times will remain quite steady with two to three months lead time for smaller events, and six months to one-year lead time for larger events and incentives.”
INCENTIVES
The ibtm World Trends Watch Report 2016 states that one of the most authoritative annual surveys of the incentive travel market is the one conducted jointly by MeetingsNet and the Incentive Research Foundation (IRF). Most of the planners surveyed are North America-based, but the ibtm report argues that “given the international importance of that market, the survey’s findings are of interest to suppliers worldwide.”
The 2016/2017 survey points to a continuing rally in demand for incentive travel, as it indicates that budgets are expanding and incentive programmes are growing, building on the turnaround in the market seen in 2015. In 2008, the MeetingsNet/IRF survey marked the average per-person spending on incentive travel programmes at $3,659, but it was all downhill from there. For seven years, spending took a steady dive, hitting a low of $2,397 in 2014. Finally, last year, things started to change in a positive direction, with rising budgets and rising per-person spending on incentive trips. This year, according to the report, the recovery continues, with respondents’ 2016 average per-person incentive spending at $3,165. This represents the largest year-on-year jump since the recession, an average incentive budget change in 2016 of +2.69%.
All of this provides interesting insight into the global incentive travel market, but obviously doesn’t take into account the vagaries and unique characteristics of the African incentive space.
Speaking to some of the major players in the South African market, once gets the sense that spend is still very much the prevailing theme.
“The spending with regards to incentive travelling has been reduced,” says Schroder of aha Hotels & Lodges, which offers MICE venues across South Africa, Botswana and Zambia. “More and more companies now tend to offer local incentives, and it’s not as ostentatious and glamorous as it used to be.”
“Economising is fast becoming the reality, with many factors at play influencing decisions,” says Prinsloo. “There is a big drive to remain relative and innovative during this progression.”
And that’s the key, isn’t it? Trying to remain relevant and innovative despite the challenging economic environment. This is where incentive operators are really having to earn their corn.
Some of those operators are actually quite bullish and believe the industry isn’t as challenged as some would suggest.
“The incentive travel industry is growing and is predicted to continue to grow at a steady pace throughout the year to come,” says Chinappan. “Although in South Africa the volatile rate of exchange is likely to continue to impact on the travel industry, the demand for meetings is on the rise and MICE budgets remain steady.”
So, what is the incentive client of today looking for?
“Incentive customers want tailor-made before or after excursions to experience South Africa’s natural beauty, but keeping their own interests and privacy in mind,” says Scully of Peermont. “They are always keen to find a new and more exclusive venue. Convenience and safety remain the ultimate decision makers.”
“Exotic destinations such as Vietnam are popular for 2017,” says Chinappan. “Although companies rarely allow delegates to bring along their spouses on a MICE trip, once the conference is finished, delegates are keen to fly out their loved ones and extend their stay by a couple of days to explore the destination.”
“Wellness vacations and yoga retreats are not a big hit with South African travellers yet. For a large majority of the population, travelling is still a bit of a novelty. They usually want to experience the destination to the fullest and are not ready to concentrate on just one niche aspect of their destination. Also, social responsibility projects are not high on the list of priorities for South African companies yet, although this could become more of a focus in the year to come.”
EXHIBITIONS
According to the Association of African Exhibition Organisers (AAXO), the exhibition industry in South Africa alone is valued at R75bn ($5.7bn), if one takes into account direct, indirect and induced spend. That’s an impressive number and an indication as to just how important the exhibition industry is to the overall MICE mix in South Africa.
“The tourism impact of exhibitions in South Africa alone is R23bn,” says Carol Weaving, AAXO Chairperson and Managing Director of Thebe Reed Exhibitions. “Exhibitions have always been underestimated in terms of the value they bring to a city, province or country, and it is time that governments take notice.”
These statistics are according to an AAXO-commissioned Grant Thornton study on the economic impact of the exhibition industry, which also showed that the total number of jobs created by the exhibition industry in South Africa during the period surveyed totalled around 153,000.
“The exhibition industry has seen significant growth over the past ten years with many international organisers setting their sights on the South African and African exhibition industry as a new frontier for growth,” says Weaving. “They have either entered the market via acquisitions or geo clones from their mother brands overseas. Over 50% of the events in South Africa, 60% in Nigeria, and over 70% in Kenya are run by international companies, many with local offices.”
Ellingson would seemingly back that up.
“The exhibitions industry in South Africa remains strong,” she says. “In fact, according to the 17th Global Exhibitions Barometer by the Global Association of the Exhibition Industry (UFI), 44% of South African companies in the industry experienced an increase of more than 10% in annual profits over the past year. The report also indicates that expectations remain high that the industry will continue to grow in 2017. We’ve hosted 33 exhibitions in the past two years.”
Looking at the African continent as a whole, the AAXO report goes on to say that the economic future for sub-Saharan Africa looks very positive and is increasingly attracting international investment interest.
“Thanks to positive government reforms and political stability across many markets, the business environment continues to improve, with Kenya, for example, moving from 129th in 2014 to 92nd in 2017 in the World Bank Group’s “Ease of Doing Business” index,” says Weaving.
Venue capacity is a barrier to the growth potential in these markets, with the venue capacity in Nigeria making up only a third of the venue capacity in South Africa.
“While Africa is becoming less dependent on mining, oil, gas, minerals and commodity prices, its economies are increasingly being driven by domestic demand in the consumer-facing and services sectors, such as banking, telecommunications, construction, infrastructure and FMCG,” says Weaving. “Yet, regardless of how quickly the demand and economies are growing, these industries are still not sufficiently represented when it comes to exhibitions and events.”
So, that’s the backdrop. Once again, lets drill down to see what’s currently being done on the ground with exhibitions and what some of the trends are, as it relates to the industry in Africa.
“Organisers are paying more attention to the delegate experience,” says Liebetrau. “Key focus is given to pre-exhibition arrival and aspects such as how to co-ordinate that the right people meet and how we share information that is relevant to build excitement around their event. Technology is also playing a larger role and organisers have become more aware of how people move between passages. Allowances are now being made for pause areas where delegates can catch up with the office and enjoy social connections.”
“The ‘confexing’ trend has been with us for a number of years, as event organisers realise the benefits of combining exhibitions with their conferences,” says Ellingson. “We regularly host large medical and scientific conferences that incorporate an exhibition component. For delegates, an exhibition component offers a richer learning experience, an opportunity to gain product knowledge, and the chance to access innovations first-hand. From the exhibitor’s perspective, the company knows that it will have access to a bespoke target audience, and for the organiser, the exhibition offers an opportunity to provide value-add to sponsors and generate revenue.”
“One recent example is the World Congress of the Royal College of Obstetricians & Gynaecologists in March, where the scientific programme was well supported by an exhibition of the latest in surgical and medical equipment, procedures, and technology related to obstetrics.”
Liebetrau and Birchwood’s Kevin Clarence are on the same page.
“This is certainly not a trend that will go away soon,” says Liebetrau. “The ‘ConfEx’ approach allows for the delegate to gain practical insights and exposure to products in person, instead of relying on the traditional conference approach for imparting knowledge and upskilling delegates. This is also an effective way to boost conference profits making the event more sustainable.”
“I foresee a massive increase in ‘confexing’ from this year,” says Clarence. “Not only is this good for our delegates, but for business owners and new product entrepreneurs who are given the opportunity to exhibit there as well. The conference, seminar or product launch is in conjunction with the exhibition – whether that is in the same venue or nearby. Clients opt for an ‘experience’ rather than standard agenda, leaving them with memorable event, instead of a meeting that could have been likened to any other one.”
Looking back at the AAXO report, it says that in terms of consumer shows in South Africa, there has been a trend which has shown significant growth in terms of the number of shows, but that the number of visitors who attend some shows is declining slightly.
“It’s important for consumer show organisers to re-invent, ensure the visitor is entertained and gets value for money,” says Weaving. “We are now seeing this shift in offering more content, ‘educationals’ and live entertainment, and ensuring the consumer gets bang for his buck.”
2017 MICE Trends
This is according to Top 3 Meetings, a leading Malta-based destination management company that specialises in organising meetings, incentive events, conferences, exhibitions and more.
- Increase in pre/post-event connections
- Personalised experiences
- Social and local impacts
- Virtual Reality and beyond…
- Virtual assistants
- Shared facilitating
- Non-traditional meeting spaces
- Social media
CONCLUSION
Whether you’re a meeting, incentive, conference or exhibition, that’s surely what it’s all about?
Weaving hits the nail on the head – you’ve got to ensure that there’s a return on investment, and you’ve just got to show value.