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Lower-tier cities are fostering the conference industry at full throttle

There is a saying for officials and business people in China which vividly reflects the booming state of the conference market in China: “If I am not at a meeting in Beijing, I am on the way to Beijing for a meeting.” 

According to data on international meetings, Beijing climbed to the 10th position on the global table in 2011, second only to Singapore among Asian cities. But the development of the industry is more closely related to the development of the smaller cities.

The main forum for the industry, the China Meetings Industry Conference, held its fifth annual event in Beijing last November, and the consensus of attendees was that the growth of second and third-tier cities and the rising of the conferencing industry complement each other. Cities were urged to take all opportunities to hold conventions to strengthen brand awareness and improve urban infrastructure. The most popular conferencing destinations in China today are Beijing, Shanghai, Hangzhou, Chengdu, Qingdao, Nanjing, Guiyang, Xi’an and Sanya.

 

Heading For Smaller Cities

The success stories of MICE industry expansion around the world indicates that both exhibitions and conferencing are important and should be given equal attention should in driving the overall MICE capabilities in propelling regional economies to the next level.

In contrast to the exhibitions industry, the conferencing business plays a more important role in terms of presenting a city’s image and promoting economic development. Most MICE destinations in China used to focus on organizing exhibitions while putting lower priority on opportunities for holding meetings. But as China’s MICE industry continues to grow, local cities are changing their attitude. The trend to bolster the meetings market generally has a high level of support from local governments and enjoys various preferential policies, including subsidies in many circumstances. 

The general manager of Guizhou Shengdi Conference & Exhibition Corporation, Su Cheng, said in an interview that the meetings market in Guiyang has grown significantly in recent years, with more than 30 major meetings held in 2011, up from 20 plus ones in 2010. “There are significant opportunities for the further expansion of Guiyang’s meetings market as long as related infrastructure and services are in place,” he said.

As a city famous for a long history of organizing conferences and similar events, Chengdu has strong momentum in the evolving national MICE industry. Chengdu hosted close to 400 major events in 2010 and has exhibition space totaling 1.9 million square meters and meeting space of 3.45 million square meters, which together pull in direct revenues of RMB 3.24 billion, and indirect income of RMB 27.3 billion.

Another example is Gu’an County in Hebei province, just 50 km from the center of Beijing and for centuries dibbed “the county beneath the emperor’s feet”. The area is expected to become an important center in the Chinese conferencing industry given its  close proximity to various traffic hubs, only 40 minutes from Beijing’s Capital Airport, and around one hour from Tianjin Port. Langfang Gu’an Fupeng Hotel, operated by Starwood Hotels and Resorts, caters for the meetings market of the Beijing and Tianjin areas with its state-of-the-art technical equipment and over 1,750 square meters of convention space and eight multi-purpose event locations. Though on the third tier city list, as one of the four developing cities in the ‘Greater Beijing Economic Circle’ (Beijing-Tianjin-Hebei), Gu’an County is building its influence and reputation.

Many cities are expanding their meetings market by leveraging such competitive elements as climate, environment, resources and location.

Xiaojun He, director of the Guizhou MICE Office noted that the city’s position in the market is strengthened by such factors as climate and tourism attractions, which are very attractive to conference planners and attendees. Its mild climate allows Guiyang to host conventions all year around.

What’s more, as neighbors of Shenzhen and Hong Kong, Huizhou is another city that boasts great MICE venues. Taking Sheraton Huizhou Beach Resort as an example, located on 16km coast line of ‘the last piece of virgin land in the Pearl River Delta – Xunliao Golden Coast, the hotel featuring both business and resort facilities sets itself apart with the selling point of rainforest and green mountain scenic spots.

As for Xiamen, besides favorable conditions in city image, tourism attractions and climate, its attachment to Taiwan is a great advantage as well. Xiamen Special Economic Zone is always taking an active part in initiating large amounts of exchanging activities circling Taiwan, with the aim of promoting cross-strait communication and relationship. 

Another ideal place for holding meetings is Hefei. Situated in CBD and next to Wanda Square, Wanda Westin Hotel there is more like an urbanized community which integrates the functions of major department store and high-end office building. The hotel now has edged itself onto the top list of convention venues among Hefei hotels with its advantage of convenience and quality and ranks as the largest high-end commercial complex there.

 

Hosting Capacity and International Reputation

The listed advantages have laid a solid foundation for lower-tier cities in fostering convention business but not enough to cover the problems confronting ahead. 

For now, secondary cities still lag behind tier-1 MICE destinations in terms of the meeting hosting number and service quality. Citing Xiamen for an example, 99% meetings the region hosted were domestic ones, with no more than 10 international conferences on annually. The number and standard of meetings are critical factors in assessing how the region develop its convention economy and initialize international campaign. Therefore, Keeping a close eye on the meetings market trend and augmenting the capacity in hosting international conferences are important tasks that need to be paid attention to. Playing host to conventions could catapult a town to global recognition and serve as a driver to ramp up marketing in the sector.

Like Dalian, a fast-growing 2nd tier city in China, has come into the spotlight by hosting a series of high-level major international conferences such as summer Davos Forum, ASEM Economic Ministers’ Meeting, WTO Informal Ministerial Meeting. Thanks to those opportunities, not only the region’s capability of hosting events, but also the attractiveness and economic development speed of the city has moved up the ladder.

However, there is no denial that human resource shortage in meetings industry, especially the lack of professionals who have know-how in senior conference management and planning has always been a concern. For 2nd and 3rd tier cities in particular, the problem needs to be resolved before expanding meetings sector. Although some colleges in China have already introduced MICE major, but most contents of the course are about exhibition, with senior management and operation lessons rarely being delivered. Some cities have embarked on personnel training, but staff in this sector still need to learn from daily work  and couldn’t step up to senior management within just a couple of years.

In addition, lower-tier cities still lag behind 1st tier city in conference facilities. JU Zhengqiu, director of Qingdao International Convention Center, noted that although the circumstance is favorable for Qingdao to become a convention destination, its hardware needs to be upgraded. In recent years, QICC has lost almost 120 orders for holding mid to large sized meetings for its infrastructure disadvantage. For instance, Qingdao was originally selected as the next potential destination to hold World Chinese Entrepreneurs Convention after Singapore, but was eventually defeat by Hong Kong after its facility being considered as unqualified by field assessment team.

Star hotels in Hangzhou spring up in recent years, but the location for holding international meetings, large ones in particular, does not catch up. According to incomplete statistics, locations like the First World Hotel in Hangzhou that has meetings rooms for thousands of people are limited.

Briefly speaking, one should at first examine pavilions when assessing exhibitions and look at hotels when defining conventions. Setting up convention hotels is the prerequisite of developing meetings market. Besides grand venues, the availability of WIFI and wireless charging facilities is another key determinant for convention planners to choosing destination.

To hoteliers, extra large-scale meetings require more in terms of venue facilities, room, or even personnel. Considering the appetite for such conventions is not big, issues regarding the significance of developing this market needs to be further discussed. Moreover, as more and more couples in China, 2nd and 3rd tier cities in particular, choose to hold large scale Chinese-style wedding ceremonies,would it be possible for hotel owners to explore this market for earnings?

“Although highly valued by municipal governments, the conferencing industry in China is still in its infancy, which needs more regulatory support and effective management in such areas as taxation, talent development, and inter-industry coordination by local