1.2 MICE Development

MICE tourism has developed well in the US, Canada, UK, Spain, France and Germany. According to Xinhua News Agency (2003), many international MICE events are held in a few Western economies such as the US, which has the world's biggest passenger transportation demand and 33.8% of the demand for hotel accommodation (ICCA, 2006). This is also certainly true for Canada, Australia, etc. Whilst Western countries have made large profits from the international MICE tourism market, at present the industry is embryonic in Asian countries. The gap between Western countries and Asian countries is obvious.

Although there is an obvious disparity between Western and Asian countries, the growth of MICE tourism in the Asian tourism market cannot be ignored with its rapid development. According to ICCA (2013), there were two major Asian cities in the ranking of the top ten popular event-hosting cities in 2012 (see Table 1.1)—Singapore and Seoul, while Hong Kong was not on the list.

The Asian Association of Convention and Visitor Bureaus (AACVB, 2014) noted that the Asian business events market achieved an impressive growth of 133% in the six years between 2008 and 2013, substantially outpacing the global growth of just 19.9% over the same period. Building on this, it also shows that Asia now occupies the top three positions for holding international meetings. For example, Hong Kong and Singapore have pursued this market for the past 20 years in recognition of its high yield. Singapore, as the most ‘Western' place in Southeast Asia, can be considered as the capital of Asian MICE tourism market. ‘One of the markets which has been targeted is the meetings, incentives, conventions, and exhibitions trade which produces S$300 million (187.5million US dollars) worth of business a year for Singapore' (Hall, 1994, p. 132). Not only Singapore, but also Hong Kong and Seoul have seen a dramatic development in the event industry.The Global Association of the Exhibition Industry (UFI, 2004) additionally noted that the event industry is important in Thailand's tourism market. Thailand has potential as a prime destination for trade exhibitions and trade fairs; these events in Thailand represent revenues of over 7.5million baht. Also by 2000, China ranked 34th in terms of the number of MICE attendees (Chinese International Airline Agency, 2000). The vitality of the sector in Asia is evident in the growth of these individual markets, with the Chinese business events industry experiencing an annual growth of 20%, the government of the Republic of Korea prioritizing business events in its ‘2013 Direction on Economic Policy', and Thailand marking an important milestone in 2013 by welcoming more than one million business events visitors, among other examples. So recognized as true growth drivers and backed by strong government support, key markets such as China, the Republic of Korea, the Republic of Singapore, Thailand, and other AACVB members continue to accelerate their business events offerings and position themselves as top business events destinations.

The prosperous development of the MICE industry in the Asian tourism market enforces the level of high competition between several tourism countries including China. The Commonwealth Department of Tourism (1995) noted at an early stage that the Australian National Convention Strategy identified the Asia-Pacific region as the major competitive MICE destination to Australia in terms of both location and development of world-class convention facilities. Rod (2003) found that competition is high as Malaysia, the Republic of Korea, China, the Philippines, and Indonesia move to increase their brand recognition and marketing power. Rod (2003) also emphasised that the last decade has seen major competitive development between those Asian tourism countries including the building of new convention centres such as those in Manila and New Delhi.

As already noted, many countries and regions have written event tourism as a major promotional method into their tourism strategies. Chinese mainland has to ‘compete for the same market with counterparts in the Asia-Pacific region, most of which are well established and have a sophisticated tourism industry for example, Singapore, Hong Kong…, with similar products but better service and cheaper price' (Zhang, 1989, p. 64). Hing, McCabe, Lewis and Leiper (1998) described Singapore, Kuala Lumpur and Hong Kong as establishing purpose-built convention centres and noted that their governments have also funded their respective international convention business. Hall (1994) also mentioned that, like other countries, Indonesia has also used a combination of events such as cultural festivals and ‘visitor years' to raise its profile in the overseas tourism market. Hall (1994) compared a ‘visitor year' to a ‘mingled' event group that provides a large range of festivals and events. He noted that in the 1990 ‘Visit Malaysia Year', a total of 107 events ranging from festivals, sports tournaments, and cultural shows were held. ‘Visitor year' is not a newly-emerged concept; it has become a model for ASEAN (Association of Southeast Asian Nations) countries to promote their tourism industry. Rurakdee (1991) noted the success of the ‘visitor year' held in Thailand in 1987. The Malaysian Tourist Development Corporation likewise designated 1990 as ‘Visit Malaysia Year', and the Japanese government held ‘Visit Japan 2010' campaign. In Thailand's tourism development plan, event tourism takes on a very important role. Corben (1990) identified four priority areas for the development of Thai tourism, which are: conventions and meetings, familyoriented leisure travel, sports travel, and incentive travel. Estimates indicated that, in 2007, Thailand hosted 95 international conferences and created more than 41 billion baht, and so ranked 29th in global terms by the criterion of the number of events held(ICCA, 2008). ICCA (2004) reported that in Asia, the biggest event-hosting country was indeed the Republic of Singapore. Thus, for example, it hosted the International Olympic Committee in 2005 when the latter selected London as the host city of the 2012 Olympic Games. However, the trend of MICE development in China is fast and even unbelievable. According to the ICCA (2013) report, among new destinations, Beijing ranked the 18th in terms of hosting international conferences with a total of 105 international conferences. In part, this was thought to be due to an ‘Olympic effect' and one might surmise the same effect would have influenced the number of such conferences for 2008.

However, from late 2007 until the time that most of this book was completed (early 2012), the world economy has suffered a ‘cold winter' due to the global financial crisis. Starting as problems in the US housing and subprime mortgage market, this financial crisis swept the whole world rapidly with a strong negative impact on the economy due to interbank lending practices that had bundled poor debt into a number of trading instruments including derivatives. This affected currency values, and the world economy slipped from a financial crisis into a downturn, adversely affecting the non-monetary economy in manufacturing and employment in different parts of the world. Due to its strong impacts, this world financial crisis has been entitled ‘the Wall Street tsunami'. As Bedford (2008) stated in a research article:

Starting in the middle of 2007, deteriorating credit quality in the US residential mortgage market served as the catalyst for a systemic financial crisis that has spread far beyond its original source… Strains in international financial markets have also affected New Zealand's financial system and real economy. (p. 18)

Another commentator, Egypt (2009) noted that although the crisis was triggered by events in the US housing market, it has spread to all regions of the world with dire consequences for global trade, investment, and growth.

This recession exposed several weaknesses in the function of the global economy. Indeed, trade and capital flows are the key factors of business cycles (Fidrmuc & Korhonen, 2010). For example, the size of the financial markets in the originating country is an important determinant of cross-border outbound investments (Di Giovanni, 2005). Similarly, Chor and Manova (2012) suggested that ‘adverse credit conditions play a significant role in the conduction of the effect of the crisis on trade flows across the world economy'. The MICE industry is not immune to these economic influences. Some researchers have stated that the MICE industry acts as a sensitive barometer of the economy, accurately reflecting the status of economic development trends for the forthcoming period. Many countries' MICE industry faced problems. For example, Zhang (2009) referred to data derived from the Las Vegas Convention and Visitors Authority, stating Vegas's exhibition industry received a total of 5.9million people who participated in various exhibitions in 2008, a figure five percent lower than that of the previous year. Additionally, forecasts based on bookings predicted a continued drop of four to five percent in 2009. According to statistics from the China Council for the Promotion of International Trade (CCPIT, 2009), while a total of 1,800 organisers were approved to hold international economic and trade exhibitions, in fact only 1,000 exhibitions were held in 2009: a total that was five percent lower than in 2008.

However, while the world has suffered and struggled to recover from the wave of the economic crisis, some countries have maintained a strong MICE industry momentum.The Association of Corporate Travel Executives (ACTE, 2010) reported that during the 2008/2009 economic crisis, while the US and UK economies were battered, China, India, and Australia generally remained ‘steady'. Although China's MICE industry was impacted by the financial crisis, the demand for MICE remained high or even increased. According to the 2015 China's Exhibition Industry Development Analysis Report, in 2014, there were a total of 7,851 exhibitions hosted nationally, an increase of 0.5% over 2013; the total exhibition area reached over 103million square metres, an increase of 13.7% over 2013 (China Convention and Exhibition Economy, 2016). This situation was based on the twin pillars of strong MICE development and general economic growth in China.