5 minute read
INDUSTRY ANALYSIS
RE-ESTABLISHING A BUSINESS CASE FOR MICE
The embattled MICE industry has gone through a challenging two years, but it has also, in part, assisted other industries in staying afloat. Meetings understands more.
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Technology – and specifically the development of ICT (information and communications technology) – has been a game changer for the way in which we work, live and play. Entities forming part of the MICE value chain are facing an interesting and most unusual paradox: they have played an increasingly important role in ensuring engagement takes place between all relevant parties across a multitude of industries over the past two years; however, this is not being reflected in bottom lines. This is largely because the platforms and delivery mechanisms of where and how these dialogues happen has shifted from in-person events to online.
The way in which we generate revenue has also had to evolve. While the commercial model has unfortunately not had the opportunity to be adapted in time for meeting planners and professional conference organisers to reap the full rewards, it does not take away from the value that business events and tourism are able to deliver. A NUMBERS GAME
So, how much is the MICE industry worth?
According to Allied Market Research, 2020 figures, which take into account the Covid-19 pandemic, this market is valued at around US$215 billion (R3.27 trillion). The research house says that MICE will be worth more than $1.3 trillion (R19.78 trillion) by 2028 at a CAGR of between 6.5% and 21.3%, depending on the region and timeframe. This indicates that, even with more conservative estimates, robust growth is still expected. Brandessence is more optimistic in its outlook and its research predicts the MICE industry will be worth closer to $2.3 trillion (R35 trillion) by 2027.
“MICE travel and tourism is one of the fastest growing sectors, accounting for more than 10% of global GDP in 2017. Sustaining its growth and hitting industry forecasts, such as 1.8 billion international arrivals by 2030, will require the continuous innovation and reinvention across the sector. Leaders will need to foster a nimble outlook that can respond to new customer demands and expectations, the next revolution in data capabilities, and heightened business risks,” according to a report by the Western Cape Government .
The report also highlights that from the MICE acronym, meetings appear to be the fastestgrowing segment, which it attributes to the growth of SMEs.
“The meetings segment [contributes] the highest share of the overall MICE industry – primarily due to a significant global rise in the number of small and medium-sized enterprises, specifically, in the emerging economies. Moreover, an unprecedented surge in travel and tourism as well as the hospitality sector has further added to the growth of this segment.”
ADDRESSING INDUSTRY CHALLENGES
There is no quick-fix solution for the recovery of losses in income that have been experienced by the numerous affected companies and individuals along the MICE industry value chain. Even with the support of initiatives such as the UIF’s TERS programme in South Africa, pay-outs have been difficult to claim and the process to do so is an arduous one. As we enter the third year of the pandemic, our greatest hurdle has been finding ways to balance the health and safety of lives and, at the same time, safeguard livelihoods.
“A transition to the next normal, in whatever form that takes, will come gradually when
people have confidence that they can do what they used to do without endangering themselves or others. Gaining that confidence will require a continuation of the progress made to reduce mortality and complications, as well as further scientific study regarding long-term health consequences for recovered patients. When confidence is restored, people will again fill bars, restaurants, theatres and sports venues to full capacity; fly overseas (except for the highest-risk populations); and receive routine medical care at levels similar to those seen prior to the pandemic,” says a McKinsey and Company analysis.
Navigating the current challenges of lockdowns and risk-mitigating measures while still making a reasonable living in an industry that is changing so rapidly has seen a major talent drain. This is as a result of people becoming so desperate to ensure their survival that they have had to either leave the industry in pursuit of more lucrative alternatives or bite the bullet and scramble for whatever opportunities may come their way. FOREVER ALTERED?
Ultimately, we may need to prepare ourselves for an outcome in which the old commercial model no longer applies. In-person events are starting to make a comeback, but these will not look like they did previously.
“Building on months of experience and some realistic expectations on global health trends, it’s not a matter of if, but how the meetings and events industry will continue to experiment and change. Despite the shift to virtual spaces, the value and hunger for in-person knowledgesharing and connection has not disappeared. As we progress, it is about finding a new medium to marry innovation with in-person interaction, enabling the events landscape to metamorphose into a new state of being,” notes Wesgro in an article.
The economic potential for large-scale meetings and events is enormous and presents a major opportunity – but our approach towards how we profit from this needs to change.
“As governments prioritise policies to boost economic recovery, the imperative to ensure that global events add value and create equitable public goods beyond their duration becomes even more important… As pressure on public budgets continues to rise, especially in light of Covid-19, future event hosts and organisers must demonstrate more than ever that public investments lead to public good,” highlighted the OECD in a webinar hosted in April 2021.
In summary, if we are unable to substantiate ROI – which is not just limited to money – we cannot justify charging significant amounts on service or management fees. As challenging as it may be to operate according to this new model, it could be the MICE industry’s salvation in the long run, as we move to more outcomes-based experiences and away from those that just look good on the surface.
– Western Cape Government
