Convention Centers: Bigger is Better

A new crop of "big-box" convention centers in Asia is aggressively pursuing American planners, as competition among them for U.S. groups is heating up.

"They're going after quality from the United States, not quantity," said expo consultant Jim Papineau, who once sold Suntec City, the largest convention center in Singapore. "A U.S. group can be an extremely lucrative piece of business."

U.S. planners can expect a flood of marketing space. Malaysia jumped into the international arena in June with the Kuala Lumpur Convention Centre, with just over 200,000 square feet of usable space.

Hong Kong opened the first phase of Asia World Expo, with 735,000 square feet within a private train station, in September. And in January the Harborfront Hong Kong Convention and Exhibition Centre will start work on a 200,000-square-foot addition that will boost usable exhibit space by 40 percent by early 2009.

Bangkok, Thailand's Impact Center opened a 600,000-square-foot expansion, in September, that made it the largest indoor exhibition space in Asia. Next up is the 200,000-square-foot meetings addition to the Central World Plaza Hotel in central Bangkok, slated for January.

Meanwhile, a 1.5 million-square-foot center is planned to open in Incheon, South Korea, in January 2007. And China has announced about 80 new convention and exhibition centers, including $30 billion worth of facilities in Beijing tied to the 2008 Olympic Games.

"Eight to 10 years ago, big boxes were few and far between in Asia. Now they are everywhere and selling in the U.S.," said Ed Tromczynski, president of OnVantage, a meetings sourcing company based in Santa Clara, Calif. "International hotel chains are moving U.S.-style group product to Asia. Without 9/11, the international market would be even bigger than it already is."

Associations in particular already rotate through Asia along with London, Las Vegas, Cape Town, Rio, Sydney and other global destinations. Other organizations have significant membership or business interests in Asia, but seldom or never meet there. Asian meeting marketers are targeting both types of organizations.

Pacific World Singapore, a local destination management company, expects to get 35 percent of its corporate business from U.S. firms that have set up regional headquarters in the city-state.


Creating Inducements

Singapore is the regional conventions leader, but has no significant new space under construction. While its neighbors tout their new facilities, Tourism Singapore is flexing its marketing muscle with "Make It Singapore Plus."

Planners who sign event contracts by the end of 2005 can get up to 30 percent of their marketing, speaker and DMC fees refunded. Other incentives include free hotel space, VIP room upgrades, F&B discounts, special rates for set-up and tear-down days, airport welcome messages, and special clearance for customs and immigration.

"The U.S. is seen as the big spender in what we call the MICE market — meetings, incentives, conventions, exhibitions," said Pacific World sales director Victor Seah. "U.S.-led events often involve large numbers of participants, and budgets are generally sizeable. Regional markets such as China and India may have the quantity of events and attendees, but not the quality insofar as the propensity to spend."

International Congress & Convention Association data show that the U.S. consistently holds more international association meetings than any other country. But no individual U.S. destination made ICCA's Top 10 meeting cities list for 2004. Barcelona came in first with 105 events, followed by Vienna at 101. Singapore was third at 99 while Hong Kong catapulted from 18th to No. 5 with 86 events.

Asia's market share is also growing. Europe fell from 62 percent to 60 percent of the association market last year, according to ICCA, while Asia grew from 16 percent to 18 percent.

"Most planners simply don't see the shift yet," said Washington-based meetings consultant Joan Eisenstodt, with Eisenstodt Associates. "They see the economic shift from the U.S. and Europe to Asia, but they aren't realizing that the meeting business will follow as a matter of course. China in particular is becoming an economic superpower. It is just a matter of time until planners and their clients recognize that it is smart and necessary to meet there."

Jane Schuldt, president of World Marketing Group, the U.S. affiliate of Pacific World, sees a similar imperative to meet in Asia. Associations are as eager as their corporate counterparts to expand into growing markets, Schuldt said. Whether the operation is for-profit or not, a growing base in Asia will mean more meetings there.

In fact, many destinations in Asia are financially attractive. Barney Lusina, president of Expanding Horizons, a meeting and incentive planner in Orange County, Calif., noted that exchange rates still favor the U.S. dollar. Taxes and service fees are also lower than in major U.S. destinations, and Asian resorts seldom charge resort fees.

"That can add up to significant savings," Lusina said. "Yes, you will pay more on air, but the land savings can offset transportation costs. There are some really good values out there."


Attracting Attention

Schuldt said the steady drumbeat of country and city marketing campaigns should help planners look at Asia more seriously. Hong Kong launched World Expo Asia at The Motivation Show in Chicago in September, and Thailand has its own MICE incentives under the Tourism Authority of Thailand.

Singapore's cash payback may be the most effective marketing tool of all. A 30 percent rebate could help fence-sitters at both corporations and associations decide that Asia is worth the additional travel.

"This is new revenue against some significant expenses," Schuldt noted. "It will have a powerful effect on helping planners decide. And when you look at flight schedules, Europe and Asia are effectively equidistant from most U.S. gateways, especially with the expansion of nonstops."