Tourism Boards and CVBs Offer Incentives to Attract Groups

A growing number of tourism boards and CVBs are offering cash incentives to attract meetings and events

Money in hand

When Nick Woodward-Shaw, director of global events for Forever Living Products International, a manufacturer of wellness products, started planning the 37-year-old firm's 2015 flagship annual event, he looked to Asia.

With 9.5 million distributors of its aloe vera-based wellness and beauty products in 155 countries, the multibillion-dollar firm tries to rotate its main incentive trip and conference for the year between different regions. With Global Rally 2014 in London and 2013 in Hawaii, the Asia-Pacific region was a natural choice for Global Rally 2015. As usual, Woodward-Shaw says, he began by choosing three potential destinations he could present to the firm's chairman and CEO, among them Singapore. Ultimately, Singapore won out.

One of the reasons for Singapore's victory, according to Woodward-Shaw, was the financial assistance that the Singapore Exhibition and Convention Bureau (SECB) was able to offer Forever Living through its year-old Singapore MICE Advantage Program, or SMAP.

A collaboration between the SECB, Singapore Airlines, and Changi Airport Group, which operates the city-state's airport, the SMAP program offers the meetings, incentive, convention, and exhibition (MICE) industry substantial financial and non-financial support, says Kershing Goh, regional director, Americas, for the Singapore Tourism Board, the SECB's parent organization. SMAP is in addition to the 10-year-old Business Events (BE) in Singapore program, which covers up to 70 percent of qualified costs (not total costs) of an event.

This support, broadly known as subvention, "was not quite critical, but very important," in the decision to select Singapore, Woodward-Shaw says. "Singapore is a very expensive destination, and the package they offered helped edge them over the top. It kind of made it a level playing field, financially."


The Growth of Cash
While far from universal, a growing number of national tourism boards and even city-level convention and visitors bureaus are offering some form of cash incentive to attract companies and associations that are considering bringing a large meeting or event to their destination.

"It is getting very competitive out there," says Goh. "Ten years ago, with BE in Singapore, we were one of the first [to offer direct financial support]. Now everybody does it and the amounts are getting bigger."

Countries with subvention programs range from Abu Dhabi and Malaysia to Scotland and South Africa, which announced its first subvention fund last year. Cities are also getting in on the action, with destinations from Glasgow in Scotland, and Prague in the Czech Republic, to Boulder, CO, and Tuscon, AZ, offering planners funds to host meetings and conventions within their borders.

So far, many destinations that offer subvention are working to avoid bidding wars. When the SECB offered Forever Living an SMAP incentive package, the bureau made it very clear that it was Singapore's final offer, Woodward-Shaw says. He did bring it to the other two destinations under consideration for Global Rally 2015, "and both said they couldn't match it," he adds. One came back with an offer that was about one-quarter of what Singapore offered, and the other offered nothing, citing the high cost of Singapore.

Related: In our companion feature "Common Non-Cash Incentives Used to Attract Meetings," read about how CVBs and tourism boards offer non-cash incentives to groups considering bringing a meeting or convention to their destinations.


For Global Rally 2015, Forever Living Products expects to pay the expenses of about 6,000 incentive qualifiers, Woodward-Shaw says. He adds that about 1,000 additional Malaysian distributors will likely pay their own way -- Singapore is located at the tip of the Malay Peninsula, less than four hours by car from Kuala Lumpur, the capital and largest city. Qualifiers will be hosted for five to nine days, depending on qualification level. "People paying their own way might do it for the last three to four days," Woodward-Shaw says.

Besides covering 30 to 50 percent of qualified costs, Singapore's SMAP program offerings include gift vouchers at the airport as well as local public relations support. SMAP can also offer a limited number of free flights and perks such as increased baggage allowance on Singapore Airlines. As in nearly all subvention programs, the cash comes after the event, and is based on hitting specific targets.

After what Woodward-Shaw describes as a fairly rigorous process that involved looking at the dates of the trip, the number of room nights, the class of hotels to be used, and the number of international visitors who would attend, as well as company financial data and the budget of its previous two events, Forever Living was offered a package that included financial support -- essentially a cash rebate -- equal to "about 4 to 5 percent of the total event spend," Woodward-Shaw says. "When the event spend is in the millions, that is significant."

Planners can also play destinations off one another if the event is desirable enough, says Karyl Leigh Barnes, executive vice president and partner at New York-based Development Counsellors International. "When it's down to a couple of final destinations, tourism boards will go head to head if there is good return on investment for an event."

And that favors large groups. These offers "are usually based on volume," says Julie Benson, director of procurement and planning for Minneapolis-based loyalty and engagement firm Aimia. "Everything is negotiable."

And while some tourism boards and convention and visitors bureaus (CVBs) try hard to keep the details of their subvention offerings opaque or limited to favored clients and planning companies, planners would be wise to seek out peers who recently held similar-sized events in cities they are considering, Barnes says. "This is a tight community," she adds.Cash for the Right Group
Factors beyond group size and room nights also play an important role in helping groups obtain subvention funds, Barnes says. "One of the reasons that CVBs exist is to provide economic development opportunities for the community," she says. "We are now seeing economic development corporations (EDCs) partnering with CVBs as a way to engage [desirable groups]. If the EDC wants to attract certain industries, you are more likely to get funding if you are in the right industry."

Aligning economic development strategy with international-meetings strategy is central to making subvention worth a destination's money, says Martin Sirk, CEO of the International Congress and Convention Association (ICCA). "If this is the case, as it is in many of the most successful destinations, then the question changes," Sirk says. "Instead of asking how much financial support the destination is offering to win a bid to attract an international congress with X-thousand delegates generating Y-million dollars in direct economic impact, the tourist board has to consider the role hosting this event will play in attracting inward investment and creating new business links in this strategically important growth industry. Many destinations spend millions of dollars or euros to attract such inward investment, and when they see certain congresses as critical to this objective, then the financial subvention offered to those specific events ... makes economic and financial sense."

For planners, Barnes adds, the lesson is clear: "Review news headlines or economic-development marketing plans for a region. You can make a business argument to a convention bureau as to why your convention is worthy of a financial incentive, since it will help meet the area's broader economic development goals."

In some cases, like the Abu Dhabi Convention Bureau's Advantage Abu Dhabi program, the board is fairly upfront about what it is looking for from conferences and exhibitions seeking financial support, citing 13 economic areas ranging from financial, telecom, and media, to metals, petrochemicals, and aerospace/defense.

Whenever tourism boards and CVBs provide cash, they see it as a way to strengthen their own bottom lines. The $3.2-million VisitScotland Conference Bid Fund, which requires matching funds from cities seeking to tap into it, takes responsibility for attracting 50 international conferences worth $162 million to the country since its founding in 2012.

But beyond that, the fund is aimed at conferences that are specifically linked to Scotland's areas of expertise in industry, commerce, and science -- and thus to industry leaders who can invest in Scotland.

This article appears in the November 2014 issue of Successful Meetings.

Questions or comments? Email [email protected]lc.com

The Ethics of Subvention
"Ethics in bidding has been a hot topic in many [MICE] industry discussions, and the general consensus was that the most important issue is transparency," says Martin Sirk, CEO of the International Congress and Convention Association (ICCA). "Any financial offers should be clearly stated to all involved parties, should not accrue to the benefit of individuals, and should not break any local or international laws. Offers which are hidden, illegal, or which benefit the involved individuals in any way are, I believe, unethical."

He's not alone on that. It's important to differentiate subvention from incentives that some hotels and occasionally CVBs offer directly to planners, rather than to the client's master bill, says Julie Benson, director of procurement and planning for Minneapolis-based loyalty and engagement firm Aimia. These range from cash and gift cards to merchandise and free vacations at the property, and it is generally left to the planners' discretion whether to turn it over to the client or not.

Many third-party planning companies, including Aimia, ban these incentives on ethical grounds, Benson says. "Sometimes I have to remind hotels and CVBs that our planners cannot accept iPads. These incentives need to be client-focused," she adds.

Cash for the Right Group
Factors beyond group size and room nights also play an important role in helping groups obtain subvention funds, Barnes says. "One of the reasons that CVBs exist is to provide economic development opportunities for the community," she says. "We are now seeing economic development corporations (EDCs) partnering with CVBs as a way to engage [desirable groups]. If the EDC wants to attract certain industries, you are more likely to get funding if you are in the right industry."

Aligning economic development strategy with international-meetings strategy is central to making subvention worth a destination's money, says Martin Sirk, CEO of the International Congress and Convention Association (ICCA). "If this is the case, as it is in many of the most successful destinations, then the question changes," Sirk says. "Instead of asking how much financial support the destination is offering to win a bid to attract an international congress with X-thousand delegates generating Y-million dollars in direct economic impact, the tourist board has to consider the role hosting this event will play in attracting inward investment and creating new business links in this strategically important growth industry. Many destinations spend millions of dollars or euros to attract such inward investment, and when they see certain congresses as critical to this objective, then the financial subvention offered to those specific events ... makes economic and financial sense."

For planners, Barnes adds, the lesson is clear: "Review news headlines or economic-development marketing plans for a region. You can make a business argument to a convention bureau as to why your convention is worthy of a financial incentive, since it will help meet the area's broader economic development goals."

In some cases, like the Abu Dhabi Convention Bureau's Advantage Abu Dhabi program, the board is fairly upfront about what it is looking for from conferences and exhibitions seeking financial support, citing 13 economic areas ranging from financial, telecom, and media, to metals, petrochemicals, and aerospace/defense.

Whenever tourism boards and CVBs provide cash, they see it as a way to strengthen their own bottom lines. The $3.2-million VisitScotland Conference Bid Fund, which requires matching funds from cities seeking to tap into it, takes responsibility for attracting 50 international conferences worth $162 million to the country since its founding in 2012.

But beyond that, the fund is aimed at conferences that are specifically linked to Scotland's areas of expertise in industry, commerce, and science -- and thus to industry leaders who can invest in Scotland.

This article appears in the November 2014 issue of Successful Meetings.

Questions or comments? Email [email protected]