It's early morning in late August as a group of American meeting planners on a site visit passes through the lobby of the Grand Hyatt Shanghai, where American and Chinese businessmen chat over tea. Fifty-four floors below, executives from Honeywell and Johnson & Johnson are gathering in the hotel's ground-floor meeting space. At 87 stories, the Grand Hyatt is currently the tallest hotel in the world, but may not be for long—outside, construction cranes fill the Shanghai skyline as new international hotels go up, seemingly overnight.
"Asia is absolutely booming at the moment," says Ian Quartermaine, vice president of global sales for HelmsBriscoe International, a site selection firm in Scottsdale, AZ. Many multinational firms and associations have opened offices or chapters in the region, he explains, thereby fueling the meetings market. No wonder Pacific World, a consortium of destination management companies with a special focus on Asia, reports an "explosion" of interest in the region. "We're getting inundated with last-minute requests, especially for business meetings in China," says Jane Schuldt, president of the Minneapolis-based firm. As for incentives, "Asia is definitely an emerging market," reports Sally Armontrout, destination specialist for Maritz Travel in Fenton, MO, who recently returned from a site visit to Beijing. "Business has recovered since SARS, and there are lots of positive feelings for 2005 and 2006."
Rising Sun
Why Asia? Just as travel follows trade, so meetings follow business, and the business statistics for the region are striking. Eighty-one percent of Fortune 500 companies have operations in China, which—with the world's seventh largest economy and an economic growth rate of nine percent a year—is leading the regional boom. Business travelers now account for 25 percent of all inbound arrivals in China, which the World Tourism Organization predicts will become the world's number-one tourism destination by 2020. In fact, China is already gearing up to host two huge international meetings: the Beijing Olympics in 2008, and the Shanghai World's Fair in 2010.
Ping He, manager, meeting and event operations, for Conferon in Twinsburg, OH, has done three years of research on the business-travel trends in Asia. According to He, China and Hong Kong lead the pack, followed by Japan, which has a longstanding business relationship with the United States as well as an abundance of infrastructure; indeed, with Japan boasting the most exhibit space in the region after China, the average Japanese trade show is now bigger than its American counterpart.
Third is Singapore: Thanks to its favorable business climate and free-trade agreement with the United States, the city-state is home to the overseas headquarters of 1,300 U.S. companies and many multinational firms. Rounding out He's list of top Asian meeting and incentive destinations are Taiwan, Vietnam, and Thailand, not in any particular order. Meanwhile, Bali's tourism has rebounded since the terrorist bombings of October 2002, and even Malaysia is popping up on planners' radar screens, according to both Schuldt and Quartermaine.
Following the Silk Road
Twenty years ago, Starwood was the first international hotel company to sign a management contract in China; today, it's adding 10 new properties to its China portfolio in the next three years, and many of these new hotels will benefit from meetings business from multinational firms, says Hwee Peng Yeo, spokeswoman for Starwood's Asia-Pacific division, based in Singapore. "Because American travelers are familiar with our brands, such as Westin and Sheraton, it's easy for us to sell to that market," says Yeo. "But we're also getting [meetings] business form local Chinese companies."
Other hotel brands are expanding their Asian inventory. London-based Le Meridien added six properties this year, in Malaysia, Thailand, Hong Kong, and Singapore. Hong Kong-based Shangri-La Hotels plans to open 18 new properties in the region over the next four years. "We're looking forward to 2005 being the best year in our company's 25-year history," boasts Karen Gray, director of sales and marketing for Shangri-La's North American division, headquartered in Los Angeles. Hong Kong-based Mandarin Oriental Hotel Group is launching properties in Thailand, Hong Kong, and Tokyo in the next two years. And Peninsula Hotels, a luxury chain also based in Hong Kong, reports a steep rise in U.S. business travel—in Asia, more than one in four Peninsula guests are American—and is pursuing this well-heeled market with its first companywide ad campaign and new properties in Tokyo and elsewhere in Asia.
Airlift, too, is increasing. Singapore Airlines, renowned for its impeccable service, launched nonstop flights from Newark and Los Angeles earlier this year. Next year, Air China will add at least two flights per week to Beijing from both New York and Los Angeles. And with a U.S.-China aviation agreement inked in July, the number of flights between the two countries—including passenger and cargo carriers—will eventually rise from 54 to 249. Regional low-cost airlines are prospering too, says Quartermaine, making travel between Asian cities affordable.
The Tiger Roars
Planners who've organized meetings in Asia praise the region for its good value, excellent service, and wide variety of high-quality hotels and meeting venues. "It's becoming increasingly easy to host meetings in Asian countries, since so many international hotels are represented in the bigger cities," notes Kate Hood, meetings manager for the Alexandria, VA-based American Association of Airport Executives, which this year held meetings in Seoul and Beijing, the latter attended by 172 VIPs from Boeing, Lockheed Martin, the U.S. Embassy, the Federal Aviation Administration, and American Airlines, to name a few. Since the AAAE selects its sites based on invitations from the U.S. Trade and Development Agency and local airports, its growing presence in Asia is further proof that trade, and the infrastructure to facilitate it, are flourishing there.
"Fifteen years ago, we established a small group of software developers and salespeople in China," says Vickie Kress, director of event management for SoftBrands, a Minneapolis-based company that designs software for manufacturing firms and was one of the first such businesses to enter the Asian market. "Since then, we've done phenomenally in all of Asia, and as our client base matures, so does our need to get customers together." Eight years ago, Kress began organizing regional conferences for SoftBrand's Asian customers and by now is an Asian-meetings expert, having managed get-togethers "all over" China as well as in Hong Kong, Thailand, and Malaysia.
Another American planner who's seen her organization's need for Asian meetings grow is Jody Egel. As meeting coordinator of the Million Dollar Round Table, a professional association of top salespeople in insurance and financial services, Egel's watched her Asian membership increase fourfold since 1995; the association now has 30,000 members in 75 countries. In 1998, when the Park Ridge, IL-based association held its first Asian conference, in Singapore, attendance was 3,000; at Egel's next event in Bangkok in 2006, she's expecting 9,000 attendees.
"Asia is the future of the meetings industry," declares Kam Junejo, president and CEO of Adagio Conventions Group in Houston. "The United States drives the meetings market in Asia, but less than 10 percent of foreign event planning companies in Asia are American." Next month, Junejo plans to take advantage of this gap by establishing a regional office dedicated to Asia-based meetings: "It's virgin territory. There are a lot of American firms there but not many American meeting companies, and you need more people on the ground who understand the two cultures."
SIDEBAR
Get Oriented
Work with a local counterpart. If your organization has an office in Asia, find a local colleague to help you, urges Vickie Kress of SoftBrands. "That person can help you overcome cultural and linguistic challenges—and I'm sure you get a better rate that way!"
Meet and eat. Asians like to discuss business over a meal, says Kam Junejo of Adagio Conventions. "It's very important not to do business on the trade-show floor," he warns. "In America, we buy and sell on the floor all the time, but Asians prefer to exchange cards and set up a meeting for later, preferably during lunch or dinner. Also, unlike in America, Asian companies rarely send decision-makers to trade shows."
Be aware of business differences. Hotels in Asia typically charge for meeting space, warns Kress, and getting a 24-hour hold is uncommon: "It becomes an added negotiation point." On the other hand, Asian hotels are well known for turning meeting rooms over quickly, says Jane Schuldt of Pacific World: "They're very efficient, since they do it twice a day."
Bring gifts. In many Asian countries, tips and gratuities are neither expected nor accepted, says Jody Egel of the Million Dollar Round Table. Instead, bring souvenirs of your hometown; Egel hands out coffee-table books on Chicago to locals she wants to build relationships with.
Arrive early and stay late. If you can, get to your meeting site two to three days early, to get familiar with the venue and adjust to jet lag, suggests Kress. "And after your program's over, enjoy some local culture—even in industrial cities in China, the cultural opportunities are incredible."
Be yourself. Thanks to satellite television, Asians are typically much more familiar with American culture than we are with theirs, says Junejo. "They like American culture, so Americans needn't go overboard in being culturally accommodating." Translation? "It depends on your business relationship, of course, but they might like it if you wore jeans!"