THE credit crunch may be shattering economies, but the mood within Malaysia’s business tourism industry is almost crackling with electricity.
Unperturbed by a world on a brink of recession, Malaysia is busy re-packing its image as a value for money, no nonsense business centre.
With Malaysia’s aim to seal itself in the meetings, incentive, conference and exhibition (MICE) market, this has resulted in the birth of a new programme called Myceb (Malaysian Convention and Exhibition Bureau).
During Myceb’s launch in Dec 8 last year, Deputy Prime Minister Datuk Seri Najib Tun Razak said that Myceb will be Malaysia’s one-stop center to co-ordinate the needs of exhibition organisers and to establish the country as the preferred MICE destination worldwide.
While admitting that the country’s tourism may not be able to completely insulate itself from the global crisis, Najib says it will nonetheless “embark on an aggressive marketing campaign to promote tourism despite the adverse world economic conditions”.
For starters, an initial budget of RM5mil has been channelled to the bureau. This figure is small compared to what countries like Singapore and Thailand are spending.
Nonetheless, MyCEB director Mohd Rosly Selamat says active efforts are already being made to create more impact in the MICE market.
Kuala Lumpur Convention Centre (KLCC) general manager Peter Brokenshire says that before 2003, the awareness level on Malaysia as a business destination was low, as MICE was not a priority.
Back then, Tourism Malaysia’s priority was on the FIT (Fully Independent Traveller) and group tourism segment.
“The potential was there. But people were not aware of Malaysia being the centre of business meetings. Back then, there wasn’t much follow up or bidding. To get the international businesses to come here, we need the support of the local associations to be interested enough to extend invitations internationally,” says Brokenshire.
Nonetheless, things changed since the formation of ‘Team Malaysia’ in 2003.
In 2003, with the realisation that business tourism was big money, Team Malaysia was formed to jointly work on garnering MICE events in Malaysia.
Members of Team Malaysia include the KLCC Convention Centre, Tourism Malaysia, Malaysia Airlines System Bhd, (MAS) Kuala Lumpur City Hall (DBKL) and Malaysia Airports Holdings Bhd.
Since then, it has gained traction and has been successful in getting the relevant associations to bid for events.
Statistics wise, a total of 1,013,104 tourists visited Malaysia for MICE purposes in 2007.
It was an improvement of 23.5% compared to 2006 (820,243 tourists). MICE tourist arrivals contributed 5% of the total 20.7 million tourist arrivals to Malaysia.
These conference delegates collectively contributed a total of RM3.17bil in revenue for the country in 2007 or 6.9% of the tourist receipts.
The average per capita expenditure of a MICE tourist was RM3,133 compared to an average per capita spending of RM2,196 by a leisure tourist.
Rosly says that in many cases, MICE tourist expenditures are 3 to 5 times more than an average leisure tourist.
Hence, despite its small share of total visitor arrivals, the MICE market has been seen as a lucrative market due to its higher per-capita expenditure.
Certainly, its no easy task as Malaysia will be competing with established neighbours such as Singapore, Thailand, Hong Kong, Macau and other big names in Asia Pacific.
For instance, in the current economic slowdown, Singapore has gone ahead to release a US$90mil stimulus package specifically for MICE purposes.
Rosly says Malaysia’s selling points include its value-for-money proposition, the state of the art convention centres, its many tourism attractions and appeal, cultural diversity, strong business community and a very supportive government in facilitating ‘business events’ as well as its English speaking population.
“There are plenty of opportunities for us. We are among the best convention centres in the region. Right now, we are trying to encourage our local associations, for example the medical, professional and scientific associations to be more active in bidding for international events,” he says.
Rosly says the bureau aims to bid to host at least two international events per month and hopes to achieve a 20% increase of conference participants by 2011, from one million last year.
For 2009, the bureau is looking at a 10% increase in the number of delegates.
“This would be a challenge in view of the global financial crisis where some of our exhibition organisers are reporting cancellation as well as some down-sizing in their participation.
“Some incentive groups have postponed their trips and some of the convention planners are reviewing their participations,” he says.
Rosly explains that many of the international meetings are done on a rotational basis. The bidding process sometimes take up to six years in advance.
“For example, The Malaysian Association Study on Obesity won the bid to host the International Obesity Conference which will be held in 2014. For events held in 2016, we are already actively putting in bids now. What we’re doing now is to give the push to the associations, and let them know the government is giving them assistance,” says Rosly.
Per year, there are about 6,000 events worldwide.
The International Congress and Convention Association reported 6,768 events in 2006 and 6,681 events in 2007.
While MyCEB is unable to bid for extremely large shows, due to Malaysian centre’s having limitation in capacity, Rosly says this does not really matter as the extremely big shows normally make up only 10% to 15% of all shows.
“We still have the 85% of shows we can bid for,” he says.
From the regional market, MyCEB is now targeting countries like Indonesia, the Philippines, China, the Middle East and India.
“As the awareness on Malaysia as a MICE destination is not enough, what we do is to bring in the event organisers for site inspection. Many of them are headquartered in Amsterdam and Paris. So we bring them in, spoil them and impress them with our service and infrastructure,” he says.
Situated at the centre of Kuala Lumpur’s Central Business District, the Kuala Lumpur Convention Centre (the Centre) is a RM550mil investment with a total of 20,059 sq m of function space.
A component of the Kuala Lumpur City Centre, (KLCC) is managed and operated by Convex Malaysia Sdn Bhd, a joint-venture company between KLCC (Holdings) Sdn Bhd and AEG Ogden Pty Ltd, Australia.
The Centre’s general manager Peter Brokenshire feels that as the present economic crisis deepens, Malaysia will become more attractive as a value-for-money MICE proposition.
“With the formation of MyCEB, it’s going to take Malaysia to another level in business tourism. MICE is gaining momentum. My feel is that, there is now a strong desire to come to Malaysia for MICE purposes.”
“We’re winning bids again and we’ve received very good feedback with regards to the KLCC precint. It’s right smack in town, and has the premier shopping complex and the Petronas Twin towers just beside it. We’ve also had comments on the warm and friendly people. MICE delegates have been delighted with the airport arrival,” he says.
Brokenshire certainly has reason to cheer, The Centre has been noticeably successful in attracting MICE events since it officially opened in 2005.
In 2008, the Centre recorded a remarkable 51% growth over 2007 to 45 events, the highest so far since the Centre’s opening in 2005.
Of the 45 conventions, 38 (82%) were international and the remainder were local events, which attracted 51,919 delegates representing 147,312 delegate days (67% increase over 2007).
The Centre was also the venue for 543 events comprising 153 banquets and functions, 45 conventions, 53 exhibitions, 255 meeting and events and 27 entertainment productions. Of the 543 events, 17% were international events.
The event size grew from an average of 3,300 attendees per event to 3,800 while room occupancy rate increased by 12%.
These events attracted 2.06 million delegates, representing 2.2 million delegate days and generated an estimated RM568mil in terms of economic impact to the city against RM469mil in 2007.
Hence, since its opening in June 2005 up to December 2008, the Centre has contributed more than RM1.8bil to the city and secured a total of some 1,800 events.
As at February 2009, the Centre had secured more than 360 bookings for this year plus 24 international and regional conferences for 2009 and beyond.
Brokenshire says that the Centre is now targeting events from countries such as Australia, Europe, and Britain.
It also regularly participates in trade shows in the Middle East, the US, Australia and Europe.
He adds that it is normal for conventions centres in other countries to encounter the “white elephant” problem during the initiation process.
Brokenshire cites the example of a famous exhibition building in the Asia Pacific region, which encountered the same problem as the KLCC Convention Centre when it first tried to establish itself as a business meeting point.
“It was called the White Elephant until the World Aids Organization held the AIDS congress in 2002. Suddenly the restaurants were full, the taxis were busy. In 10 days, one cab driver mentioned that he made his income for a year! In one of the shops, they ran out of Rolex watches! So people need to see and feel it before they understand how important it is,” says Brokenshire.
Meanwhile, just last month, The CEI Industry Awards recognised the excellence of the KLCC, granting it “Asia’s Best Convention & Exhibition Centre”.
CEI Asia Pacific is one of the region’s leading titles for the MICE industry, which culls views and opinions of CEI readers in an industry survey.
