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Local MICE Sector Leads Tourism Recovery

Local MICE Sector Leads Tourism Recovery

WHILE Malaysia’s tourism industry is expected to take several years to recover to pre-pandemic levels, the meetings, incentives, conferences and exhibitions (MICE) sector appears to be recovering at a quicker pace.

In fact, it is possible that by year’s end, the industry will not only recover to its 2019 performance level but could surpass what it achieved that year, thanks to major support from Asean participants.

Malaysian Association of Convention & Exhibition Organisers & Suppliers (MACEOS) president Francis Teo tells The Edge that this is a welcome development, as the pandemic has caused the industry to lose out on four years of continuous growth.

Indeed, things are looking up. Last week, the Malaysia Convention and Exhibition Bureau (MyCEB), a division of the Ministry of Tourism, Arts and Culture, which was established to strengthen the country’s position in the international business events market, said that as at August, it had secured 149 business events happening throughout the year, contributing to an estimated economic impact of RM2.4 billion and welcoming 494,015 delegates to the country.

MyCEB promotes the country as a MICE destination for all players, including business events held at hotels. Apart from MyCEB, individual players and state level
bureaus/convention centres also do their own marketing activities to attract events to the country.

MACEOS, which has more than 200 members, represents the whole business event economy, including most of the large-capacity convention and exhibition centres in the country. Thus, the performance of MACEOS members is a good indication of how the overall local MICE market is doing.

According to Teo, the MICE sector began to see a rebound last year, with 2,225 events held, of which 99% were physical events and 83% were corporate events and meetings.

This compares with 236 events held in 2020 and 331 in 2021, which were either virtual, hybrid or physical.

“Business events were allowed to take place from October 2021, with strict conditions in attendance, but the significant increment was notable only when our borders were opened in April 2022 and the quarantine requirement was lifted the following month. Domestic events picked up tremendously in the second half of 2022, with most venues occupied during this period. Foreign event participation increased only in early 2023 and [subsequently] we started to see an influx of exhibitors in trade exhibitions, particularly originating from China markets,” Teo says.

He adds that before the pandemic, the domestic versus foreign participation ratio would average at 80:20. Currently, the split is 90:10. “The majority [of pre-pandemic event participants] were from the Asean countries, and the notable single country [event participant] was from China. Today, the Chinese visitors have not returned to pre pandemic levels yet.”

Exhibitions held this year included Archidex from July 26 to 29, with a total of 35,000 visitors, of which about 10% came from 100 countries; and the 38th Congress of the Asia-Pacific Academy of Ophthalmology — APOA 2023, held from Feb 23 to 26, hosting 4,500 delegates.

Upcoming events include the World Congress of Innovation and Technology Congress, to be held from Oct 4 to 6 in Kuching, Sarawak, hosting 3,000 delegates; and the Asian Oil, Gas and Petrochemical Engineering Exhibition, to be held from Sept 13 to 15, which will host 25,000 attendees from 52 countries to meet 2,000 exhibitors and brands across seven halls at the KL Convention Centre, with international pavilions from China, Germany, Italy, Singapore, South Korea, the UK and the US.

Race for the meetings market

Post-pandemic, event organisers are competing to capture the regional MICE business.

“With the great reset of the industry, all MICE destinations are aggressively promoting their countries,” Teo says. “We notice that there are compelling incentives offered by other destinations.”

He cites the Hong Kong government, which is offering free venues for exhibition organisers, with certain conditions attached, so that Hong Kong can regain its pre-pandemic preferred MICE destination position in the region, especially for trade exhibitions.

“We are promoting Malaysia as a value-for-money destination, with our lower cost of event organising and participation compared to neighbouring countries,” he says.

How are packages in Malaysia being priced? To encourage participants to attend physical events, Teo says, organisers are finding it hard to increase participation fees. At he same time, they are also faced with rising associated costs such as manpower, utilities and food and beverage, leading to thin margins.

On forward bookings, Teo says the outlook is encouraging, as most MICE venues have been booked until year’s end for local and regional events.

There are 27 purpose-built convention and exhibition centres in the country, of which the largest is the Malaysia International Trade and Exhibition Centre in KL Metropolis, offering 51,000 sq m of indoor saleable area. No major centres are opening this year or next, though.

As to improving China tourist arrival numbers in the first five months, Teo says, “Like other Asean destinations, Malaysia is heavily dependent on the China market. Although its borders opened early this year, the increment is for visitors attending exhibition events. The larger mass incentive events from China are still not forthcoming yet.”

He observes that unlike before the pandemic, meeting days are now shorter, resulting in a drop in the number of leisure activities post-MICE events.

“Exhibitions that were usually held over four days are opting for three-day events instead to cut operating costs,” he says, highlighting that business travellers attending events typically spend three times more than leisure travellers.

“We noticed a significant drop in pre- and post-event activities, as a majority of the visitors are from this region and thus prefer a shorter stay. Usually, visitors who extend their stay would be from long-haul markets, which has shrunk,” he says.

MyCEB projects that the country’s business events will attract 5.9 million delegates by 2030, contributing RM42.12 billion in estimated economic impact while creating an estimated 25,833 jobs in total. 

Source : The Edge