Overview of MICE Tourism in Malaysia
Malaysia is in a very good position to offer an attractive value-for-money MICE proposition to attract major international business and social events to be held here. With a wide repertoire of both man-made and natural attractions, it already has what it takes to become a preferred destination for meetings, incentives, conventions and expositions (MICE)-related activities. The number of state-of-the-art convention centres, as well as its many tourism attractions, cultural and religious diversity, availability of ʻhalalʼ food everywhere, strong multi-racial business community and a very supportive government in facilitating ʻbusiness eventsʼ are among other factors why Malaysia can very quickly emerge as the preferred MICE destination in this region, despite lagging behind countries like Thailand, Indonesia and Singapore in promoting itself as a MICE destination on the world map. Its English speaking population makes it convenient for foreigners to get around the country, a plus point over its competitors such as Indonesia and Thailand.
Malaysia has been in the No 1 position as a tourist location within ASEAN, and No 2 within the whole of Asia after China, there is every reason for MICE activities to flourish, if the right strategies are being put in place to attract MICE tourist arrivals in Malaysia. Since the launch of the ʻMalaysia - Truly Asiaʼ campaign in 1999, tourist arrivals had risen from a mere eight million to 21.5 million in 2008, and total receipts were up from RM12 billion to RM49 billion by the end of 2008, where 30% of its revenue comes is generated by the MICE sector alone. In 2008, conference delegates totalled 820,243 with receipts totalling RM2.5 billion.
Malaysia has premised itself as a world class destination for Meetings, Incentives, Conventions and Exhibitions (MICE). The Malaysia Convention & Exhibition Bureau (MyCEB) successfully secured 33 major events throughout January to May 2012, attracting total delegates of 50,770 and generating an estimated economic impact of RM499.9 mil. The International Congress and Convention Association (ICCA) Rankings 2011 ranked Kuala Lumpur number 21 in the world and number 5 in Asia Pacific. Malaysia ranked number 29 in the world and number 7 in Asia Pacific
In order to attract MICE-related events, it would require a lot more team efforts and strategic alliances between people in various industries who will be able to complement each other in drawing up competitive packages to woo international events to Malaysia. This is why teamwork between people in various organisations, including both local and foreign airlines, national tourism organisations, tour operators, the hospitality industry, event management and venue owners is strongly recommended to propel MICE business in Malaysia.
Characteristics of MICE Delegates
Generally, MICE delegates are usually longer staying guests who spend a minimum of three days at local resorts or hotels. They are either visiting the country as part of a large conference group or a group travelling on incentive trips. They are also a high revenue-generating market and will give “overflow benefits” in the long term for business as well as become repeat tourists themselves. They generally spend 3 to 5 times more than the average leisure tourists who fall within the category of Fully Independent Traveller (FIT) and group tourism segment, two sectors of the industry which Malaysia had focused on mainly, prior to 2003. After that year, the industry began to realise the potential of the MICE sector after some eye-opening examples came to light such as the roaring retail business for fashion and transportation services during the World Aids Organization Congress in 2002 held in Kuala Lumpur.
KL Convention Centre is another convincing story. Since its opening in June 2005 up to December 2008, it has contributed more than RM1.8 billion 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 2009, plus 24 international and regional conferences for 2009, and beyond. It is doing all it should be doing in targeting events from countries such as Australia, Europe, the Middle East and United Kingdom. In 2008, the Centre recorded a remarkable 51% growth over 2007 to 45 events, where 38 (82%) were international and the remainder were local events, which attracted 51,919 delegates representing 147,312 delegate days (67% increase over 2007).
In order to be chosen as a preferred destination for international events, industry players have to fully comprehend the needs of the event organisers, and be able to meet clientʼs expectations. We also have a lot to learn from our competitors in the region, especially Thailand and Indonesia, which have already set up their own bureau to promote MICE activities.
What MICE Delegates Expect
To develop the MICE sector, there needs to be a clearer understanding of what clients – event organisers and international organisations (both business entities and non-profit organisations) – want out of the events, and how Malaysia, as a host country, can mobilise its resources to meet the expectations. As part of a service and hospitality industry, the nature of MICE business is very intensive in human relations. Visitors to this country would appreciate every effort in making their visit pleasant, and it involves people interacting with locals. There is therefore a need to understand that clients from different countries have different expectations of what they consider as a pleasant experience staying in Malaysia during the course of their business meetings. A number of business people choose to meet in Malaysia for a leisurely game of golf, whatʼs more, if their business conferences come with a game of golf with a local celebrity or a cabinet minister! While the Middle Eastern tourists like Malaysia, first because of the shopping experience, then the weather, and they are comfortable with the halal food environment, the Chinese tourists are certainly very comfortable with what Malaysia has to offer because there are many Chinese descendants here, and then, there is a casino in Genting Highlands and good food in Penang. The Westerners from the US and Europe, and even Australia, would prefer places that are closer to Mother Nature, and for these clients, beach resorts and our tropical rain forests are the biggest attractions to bring them in groups.
While clientsʼ expectations are extensive, a general guideline is as listed below:
• Good facilities provided by venue owners at competitive rates. Hotel rates for both the conference delegates and their families should be priced competitively to encourage business people to travel with their families, and extend their stay in Malaysia. Clients expect the facilities to be first class, while the prices are a very good bargain that they can get with their money. When they feel good, they will return.
• Attractive packages that cater to the needs of event organisers. Event organisers are likely to pick Malaysia if they are given all the support that they need to make the event a success. In some ways, Tourism Malaysia plays a very important role to connect these international event organisers with their local counterparts.
• Easy visa applications and hassle-free entry points at the Immigration checkpoints. This is best done with the help of the Immigration Department and the Ministry of Tourism. In some countries, there are special counters to serve the MICE delegates.
• Efficient logistics arrangement for delegates to move about when they arrive. Taxi services have to improve. No one likes to get around a new place and end up being lost or feeling cheated. Therefore, throughout the whole event, tour operators and guides should be available to escort the tourists who want to visit places that are of interest to them as part of the overall package. They can be partially funded by the Government through Tourism Malaysia in the first few years until the MICE tourist arrivals have achieved a certain target.
• Good shopping facilities within short distance from the convention or exhibition venue. This is one reason why many business people bring along their families when attending a business event in Malaysia. People enjoy shopping, and cities like Kuala Lumpur offer great shopping experience for the foreign tourists. International brands such as Gucci and Calvin Klein are easily available in major shopping malls.
• Unbeatable high level of service by staff at every level, with warm reception and friendly customer service that makes tourists wanting to come back to Malaysia for more visits. Unlike countries like Hawaii where there is the Hula-hula dance to welcome visitors, Malaysia has yet to popularise its Kompang welcome. If creating the first impressions is important, the welcome is just as important.
• Friendly signage at every location. This is where the use of English, Mandarin, Tamil and Arabic should be encouraged to show that Malaysia is a progressive nation which is friendly to people from any nationality. A good example has already been set by the State Government of Penang, where road signs in some parts of Penang are now in a few major languages. Singapore has also set the precedence with announcements on the MRT in four major languages.
Malaysia is also a food paradise for most tourists to this part of the world. Visitors to this country are often amused by the fact that food is available at every nook and corner on a 24-hour, round-the-clock basis. Malaysia also has a number of resorts which are eco-friendly and “unique” for tourists from the West who like having their meetings in a natural setting. Apart from learning what clients expect, it is also useful to see what our neighbouring countries are doing to woo MICE activities to their countries.
Boosting the MICE Industry
As early as 2003, a number of agencies from both government and business sectors have formed what is known as Team Malaysia to woo business tourism. The early members of Team Malaysia included the KLCC Convention Centre, Tourism Malaysia, Malaysia Airlines System Bhd (MAS), Kuala Lumpur City Hall (DBKL) and Malaysia Airports Holdings Bhd. With the joint-efforts from various bodies, it was a lot easier for the relevant associations and companies such as the medical, professional and scientific associations to be more active in bidding for international events to be held here in Malaysia. Since then, the number of tourists visiting Malaysia for MICE purposes has increased. In 2007, the figures made up 5% of the total 20.7 million tourist arrivals to Malaysia, or a total of 1,013,104 tourists, an improvement of 23.5% compared to 2006 (820,243 tourists). These conference delegates contributed a total of RM3.17 billion 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. They also spend an average 3.5 nights in the country and if the government wants this extended to five nights or more, efforts have to be directed at making the stay more pleasant.
Malaysia recorded an overall growth of +1.2% tourist arrivals with 9,438,592 tourists for the first five months of 2012 as compared to 9,323,827 for the same period last year, according to the Tourism Minister, Dato’ Sri Dr. Ng Yen Yen. ASEAN region still contributed the largest number of tourists to Malaysia with 73.4% of the total arrivals. The positive growth come from Indonesia (+19.3%), Philippines (+41.7%), Vietnam (+35.2%), Myanmar (+6.9%) and Laos (+19.9%). Other notable progressive medium and long haul markets include Saudi Arabia (+50.7%), China (+34.1%), Japan (30.6%), Russia (25.8%), Kazakhstan (25.2%), Denmark (14.4%) and India (+7.8%). Total receipts by tourists from January to May 2012 rose by +1.9%, generating RM21.8 billion to the country’s revenue as compared to RM21.4 billion in 2011. The tourists’ per capita expenditure for that period is estimated at RM 2,309 an increase of 0.7% as compared to RM 2,294 in 2011.
Now, with the setting up its own specialised bureau in December 2008, known as the Malaysian Convention and Exhibition Bureau or MyCEB, the MICE industry is slated for further growth. The bureau is tasked with the responsibility to promote Malaysia as a one-stop center and to co-ordinate the needs of exhibition organisers in an effort to establish the country as the preferred MICE destination worldwide. It has an advisory council made up of experienced individuals and leaders from both the private and public sectors. The bureau will also help identify potential buyers in both the private and public sectors, mainly from the regional market where it is now targeting countries like Indonesia, the Philippines, China, the Middle East and India. It will take some years before we see the fruits. This is because international MICE events are usually bid a few years in advance.
For starters, an initial budget of RM5 million has been channelled to the MyCEB. This figure is low when compared to what countries like Singapore and Thailand are spending on promoting their MICE industry. Statistics released by the International Congress and Convention Association show that on average there are some 6,000 events worldwide. In 2006, there were 6,768 events while in 2007, there were 6,681 events, where 10% to 15% of these shows are the extremely big shows and our local convention centres are unable to cope. Malaysia has to make several giant steps to keep up with its neighbouring countries. Malaysia will also have to work together with some 6,000 lead associations around the world. Malaysiaʼs main competitors are Thailand and Singapore, with the latter being one of the top MICE destinations in the world, hosting 120 conferences annually. This is why Malaysia has to be more actively involved in a number of MICE-related associations at both the domestic and international levels, in order to promote itself as an attractive MICE destination.
Attracting both MICE events and visitors to Malaysia
When talking about MICE, there is a two-prong strategy to boost MICE arrivals to Malaysia. The first is through international events that are being organized to attract buyers from overseas. The second strategy is to position Malaysia as an attractive place to host international events and exhibitions.
Tourism Malaysia's Role
Apart from the few MICE-related associations, Tourism Malaysia also plays a significant role in attracting MICE arrivals through its assistance with event promotion, coordination of meetings with Malaysia Airlines (MAS) and other Government agencies, as well as providing promotional materials about Malaysia for use such as brochures, DVDs and gift items. They also provide complimentary convention templates for announcements and other purposes besides also making available information on suppliers such as professional conference organisers, conference-handling agents, exhibition contractors, audio-visual companies, gifts and convention material suppliers. For non-profit professionals and associations which plan to bid for international meetings to be held in Malaysia, Tourism Malaysia also provides both consultation and financial support for the bidding process to secure new association meetings to be held in Malaysia. In order to quality for the numerous benefits under the Meet & Experience Malaysia, there is a set of criteria to fulfil when organising MICE events in Malaysia:
Meetings & Conventions
• 3 or more nights stay at a conference hotel
• At least 150 delegates
• 25% or more foreign delegates
• Delegates from 5 or more different countries
Exhibitions
• 3 or more exhibition days
• 20% or more foreign exhibitors and visitors or 20% or more net space rented to foreign exhibitors or 10% or more foreign trade visitors
• The event must have a good track record (based on an audited report of the previous exhibition)
Incentive Trips
• 2 or more nights stay in a hotel
• 120 participants or more
o At least a total of 3 nights stay at a conference hotel in Malaysia
o At least 2 nights stay in hotel
o At least 25% overseas delegates
o At least from five(5) different countries
Why some MICE activities are more successful than others
Exhibitions, which are usually accompanied by conferences, serve as the meeting point for interested parties to familiarize with each otherʼs products and services. It involves both the buyers and the sellers from the same industry. In some instances, the buyers are the members of the public who are simply looking for some
products or services.
However, as an event representing a particular industry, exhibitions to be properly marketed to attract both domestic exhibitors and visitors, as well as from abroad, in order to be a successful and sustainable project every year. There is no doubt that a strong marketing team is vital to ensure the success of every exhibition.
The marketing teamʼs main task is to be fully informed of what the visitors are looking for, before they approach the potential exhibitors. The beginning is always the toughest. A survey of the market, whether the exhibition would meet the needs of the buyers and the sellers, is always vital before any exhibition is being organised. The target market segment, whether mass or niche market, would have to be clearly defined before the right media is being used effectively to woo these visitors to visit the exhibition. Without proper groundwork, any exhibition is bound to flop, and worse, potential exhibitors are likely to look into the past record before they decide to participate in the exhibition. It is a chicken and egg situation – whereas the number of exhibitors can positively or adversely impact the number of visitors to the exhibition, it is also the number of visitors that will eventually determine the participation of the exhibitors.
The role of the mass media is so important to ensure the success of these exhibitions especially when the target audience is the general public. No amount should be spared to advertise or publicise the event to target the specific market segments. Event organisers or the associations they represent should also provide value added services such as business matching programmes to help exhibitors strike some deals, which can be translated in dollars and cents.
The importance of the peripheral services cannot be under-emphasised especially if the exhibition is aiming at attracting regional visitors. One example would be the numerous education fairs that are being organised every year. Parents and their college-going children from neighbouring countries are not coming to Malaysia only to check out the exhibition, but they would also want to visit the colleges, go on a shopping spree or a short holiday at one of the local resorts. They would also value travel packages that take into consideration their needs, besides just scouting for tertiary education for their children.
The measure of success of exhibitions is therefore never in the number of visitors but the quality and the value in dollars of business deals struck during or after the exhibition. The event organiser has a major task to attract the right type of visitors.
The key word to success in turning exhibitions into successful regional events is again teamwork. With intense competition among the countries in the region, Malaysia would have to work hard to realize its potentials as a preferred MICE destination in this part of the world.
Sources of Reference: Ministry of Tourism, Malaysia & Malaysia Convention & Exhibition Directory 2009.
