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MICE: REALITY AND POTENTIAL
Few props for business powwows and incentive breakaways
MICE tourism is on an upward curve but despite its potential India has a long way to go before it can emerge as a preffered destination for holding international meetings and events.
Issue Date - 16/02/2012
 
Two decades of economic liberalization have brought about untold opportunities for doing business in India. The country today counts among one of the most preferred go-to investment destinations in the world. In 2010, India ranked second as a foreign direct investment destination, according to World Investment Prospect Survey by United Nations Conference on Trade and Development (UNCTAD). Thanks to a booming economy and the rising tide of investments, enormous business opportunities have been unleashed in India in sectors such as IT, medical, telecommunications, banking, insurance, oil and petroleum, health care, pharmaceuticals, agro products, food and water management, among others. The country’s growing potential as a global economic hub and its still pristine and largely untapped market make it a very potent choice for investors, developers and operators alike looking to explore, establish and expand their business and brands in the country. This frisson of commerce has given a boost to business travel which, in turn, has resulted in tours linked to meetings, incentives, conventions and exhibitions (MICE) taking off bigtime in India.

With its spreading business clout, continuously evolving infrastructure and fabled hospitality, India is increasingly being considered as the venue of choice for meetings, incentives, conferences, conventions and exhibitions. The country has a young and voracious economy, a bulging middle class with money to spend and a febrile market, which collectively make it a compulsively attractive business destination and a happy hunting ground for organising business conventions, meetings and trade fairs. In fact, business travel in India has become the ‘in thing’ and many corporate houses are zeroing in on the Indian MICE destinations for their offbeat business meetings and corporate vacations. According to the Global Business Travel Spending Outlook 2011-2015 study, compounded annual growth in business travel spending in emerging markets such as Brazil, Russia, India and China is projected to grow two to three times faster than in developed economies like the U.S., France, Germany and the U.K. In the case of India, business travel spending is expected to grow to double digit percentages in the next couple of years while business travel index is estimated to rise to 365, up from the current level of 197. The study says that the boom in exports, particularly in services, coupled with a growing domestic consumption propelled India to become the 12th largest business travel economy in 2010.

With India emerging as an ideal destination for the business travellers from all over the world, MICE tourism is fast catching up in the country. According to a research report by the International Congress and Convention Association (ICCA), India held 100 internationally recognized meetings in the year 2010, thus garnering 31st rank in the global list of top meetings destinations, but coming in behind Malaysia, Thailand and most of Europe. While New Delhi performed reasonably well coming in at 64th position, Mumbai bagged 153rd rank, a few notches below the surprise city - Hyderabad - which came in at 114th position. Bangalore and Chennai ranked low down towards the very bottom of the list, managing to show up at 231st position. In terms of foreign tourist arrivals, India ranks 40th amongst its global peers, having received 5.8 million foreign tourists in 2010, while our regional neighbours Malaysia and Thailand, ranked 9th and 16th respectively, attracted 24.6 million and 15.8 million tourists. Even Indonesia fared better, receiving 7 million inbound foreign tourists in the same period.

 
So despite the potential of the MICE industry in India - growing at 15 to 20% annually - two facts stand out. The first is that India has a long way to go before it can even think of closing in on its much smaller neighbours for tourism revenues. Even the relatively small island state of Singapore, a country with three truly world class international convention venues, claims 40 million tourists every year. By contrast, tourist traffic in India was less than six million. The second is that China, the country perhaps most commonly compared with India in terms of size, growth and international potential, has almost four million square metres of convention space now and, as a result, a conventions and exhibitions industry more than 10 times larger than India’s.

India now ranks 22nd in the world and fifth in Asia, in terms of revenue generated by the MICE industry. The world market for MICE tourism is estimated to be in excess of $280 billion. Of this, the share of Asia-Pacific region alone is $60 billion and India accounts for $4.8 billion which is less than 2% of the world market. In comparison, 30% of Singapore’s tourism revenue is from MICE. A global hospitality report by HVS International reveals that convention or meetings tourism accounts for over 20% of all international arrivals worldwide. In several nations across the globe MICE business is a key contributor to the overall hospitality industry and has the potential to add to the overall development of India as a destination. Sadly, India, very much in the nascent stage, remains unable to capitalise on the potential that the MICE industry presents. When compared to some of the other Asian countries like Malaysia, Dubai and Japan, India’s performance in MICE tourism comes across as a sad story, but nevertheless one with immense potential and a tremendous growth opportunity.

Till the late 1990s, North America and Europe dominated the conventions and conference markets. The US still holds the top spot for the highest number of meetings as a single country destination. However, several Asian countries have successfully captured a growing portion of MICE business in recent years. With the emergence of India as a key economic hotspot along with China, convention tourism has enormous possibilities in the country. India’s growing strength in the information technology and other business arenas has prompted a few prominent international bodies to host trade shows and conventions in the country. While meetings, events and exhibitions take place in key cities of Delhi, Agra, Jaipur, Mumbai, Goa, Cochin, Chennai, Bangalore, Kolkata etc, incentives have shown keen interest in the cities of Delhi, Jaipur, Agra, Jodhpur, Udaipur, Goa etc. Thanks to the increasing prominence of these places as MICE destinations, they have seen a steady growth of infrastructure and accessibility over the past few years. As businesses like bio-technology, pharmaceuticals and manufacturing scale up, these cities will most likley bring in greater convention revenues to the country in the coming years. According to industry analysts, MICE business is said to generate 2.5 to three times more revenue than the leisure business, per person.

          

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