2.7 MICE Market Competition

The Chinese saying that ‘there are no waves without wind' means any specific phenomenon that happens must have its own rationale. The boom in convention centre construction has been caused by a growing demand in the MICE market and the desire of urban centres to benefit from this. Due to the dramatic growth and profit potentially brought by event tourism, many cities and regions are very keen to gain an advantage in this market, which in turn intensifies competition. Bramezza (1996) stated that, increasingly, cities and towns adopt the logic of competition in a highly dynamic and complex environment. Listokin (1985) had summarised the reason—the economic reward is great! Richards and Wilson (2004) also stated that due to the increasing integration of the global economy, a growing number of places are drawn into this competitive environment. For example the Sydney Olympics in 2000 not only had provided benefits for two weeks, but were planned to have deep and far-reaching effects for the next several years on the Australian economy, reputation, culture, etc. Event tourism is outperforming the traditional markets and thereby mirroring shifts in tourism development in general. Because the cake is so delicious, everybody wants to share a piece of it and also wants to win the biggest slice. Dwyer and Mistilis (1997) said the market for MICE tourism at both international and domestic levels has shown to be extremely competitive.

Actually the MICE competition can be viewed in two ways: external and internal. The outside competition is fierce for MICE opportunities between countries, while within countries, competition between large cities and small cities is also intense.

Competition Between Countries

Perceived as an important determinant of success in the marketing of tourism, MICE tourism is much sought after by many destinations. The development of the MICE industry is obvious and has appeared as a contributor to economic growth in many countries. Recently, the most competitive MICE countries are mainly located in Europe and America. However, due to the rapid MICE development in the world, cities in other areas are starting to get more attention from this industry. Indeed, as Dwyer and Mistilis (1999) said, the MICE market is growing particularly rapidly in the Asia-Pacific region.The extent of competition among destinations has also been growing rapidly in the Asia-Pacific region. The Commonwealth Department of Tourism (1995) mentioned Japan, Malaysia, and the Republic of Singapore as all having government/national conventionhosting plans to increase the number of international MICE. According to Teerarat (2013), in 2008 Thailand had 821,892 MICE tourists and in 2013 the number of MICE tourists increased to 1,013,502. The Hong Kong Tourism Board also considered the MICE market as a focus and launched ‘Image Hong Kong' in 2003 for the sake of more MICE attraction.The pocket-sized state of Singapore owns limited natural resources with a land area of just over 700 square kilometres, but the number of international MICE hosted by this small country is large, and it ranks among the top in Asia and the world as one of the most successful MICE centres. In order to develop greater MICE opportunities for the tourism market, Tokyo has conducted three major construction projects, including Roppongi Hills area, Shinbashi-Shiodome area (Shinbashi business district), and Shinagawa area (Shinagawa business district). In addition, India, Malaysia, and other Asian countries in recent years have also increased efforts to develop the MICE market.

Competition Between Cities

Because of perceived economic benefits derived from the MICE industry (and a need to obtain a rate of return on past investment), inter-city competition continues to become more intense. Many large cities like Sydney and Auckland have gained significant infrastructure development due to hosting events such as the Olympics and the America's Cup. Also, in small cities or towns, and even in some rural areas, as noted by Ryan, Smee and Murphy(1996), the number of events taking place is also growing. MICE development has caused an uneven and unbalanced competition between large and small cities. Berg and Braun (1999) noted that fundamental changes in the economy, technology, demography, and politics have reshaped the environment for towns and cities in Europe; and these changes have induced competition between towns and cities at regional, national and sometimes international scales. Generally, small cities or towns with little capability or financial support find it hard to compete with larger cities. The gap between larger, better-endowed cities and rural areas and other locations is obvious. Nonetheless, Law (1993, p. 1) stated that ‘large cities are arguably the most important type of tourist destination across the world and yet urban areas have been greatly neglected in most academic studies of tourism'.

A large city with its strong financial support and city image maintenance has always tended to have better public services than small places. Mullins (1992) said urban areas, particularly large cities, are especially developed for the production, sale and consumption of goods, and services providing pleasure. Small cities or towns with limited development are perceived unable to compete with larger-population centres because of a lack of tourism products and facilities like transport, accommodation, restaurants, etc., and thus have sought means by which to foster their strengths and circumvent weaknesses by an emphasis on rural peace. Mills (1991) noted that event centres have been built or planned primarily in large cities. Due to the way in which event organisers tend to consider MICE destinations, small cities or towns generally have a low capability to compete with the big cities. Consequently, the tourism planners in many small cities or towns struggle to obtain some advantages and are more likely to develop festivals or shows based on unique cultural or historical attractions.

MICE Competition in China

Although the MICE market in China is thriving and prosperous, competition for the MICE market in different cities that have the capacity to hold events is severe. Major cities in China like Beijing and Shanghai need to compete on a global scale with other large cities, especially in Asia. This provides an opportunity for the remaining cities to seize opportunities for medium-size events like the 2006 Hangzhou World Leisure Expo, 2006 Guangdong International Tourism Culture Festival, etc. Many Chinese cities have seen the potential advantages of event tourism such as high consumer spending and subsequent profits. In recent times, many cities have focused on ‘MICE tourism' and, according to their regional characteristics and advantages, have engaged in ‘branding their event city'. Xinhua News Agency (2003) noted that due to the popularity of the event industry all over China, municipalities have engaged in building exhibition halls, and many event operators and tourism organisations strive to join international event organisations. Every tourism city that has the capacity wants to share and seize this potential market. The ‘event tourism' competition between Chinese cities has aided China's event industry to develop, which provides both experience and further opportunities such as the 2008 Beijing Olympics and 2010 Shanghai World Expo.

Yet the market must have a limit, and exceeding that limit may cause negative impacts, especially in some immature event markets. Some medium and small cities in China are suffering from the consequences of poor financial returns, the high cost of building and promotion, too many convention centres, low space occupancy, and environmental degradation, etc.