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JOO Young-Min

Opportunities and Challenges for the MICE Industry

JOO Young-Min

Mar. 12, 2010

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MICE, an acronym for Meetings, Incentives, Conventions and Exhibitions, was established in the mid-1990s. The term includes meetings held by international organizations and associations for information exchange and discussions, and corporate events for meetings and business.

According to the Korea Tourism Organization, foreign participants at international conferences held in Korea spent an average of US$2,336 in 2005, excluding airfares, about 2.4 times more than the per-capita average of US$984 spent by foreign visitors to Korea in general.

The economic effects of MICE can be significant. In Canada alone it totaled 71.09 billion Canadian dollars in 2006 (approximately 57 trillion won based on the basic rate on December 31, 2006). Considering the economic potential, many countries are aggressively promoting the MICE industry. Singapore , Hong Kong , Japan and China in particular have been spearheading the drive through budget support, tax breaks and facilities investment. In fact, Asia set the pace in MICE activity between 1999 and 2008, growing by 85.4%. Asia accounted for 21.7% of the global MICE market in 2008, up from 12.4% in 1999. In contrast, the number of non-Asia international conferences fell 5% from 9,136 in 1999 to 8,683 in 2008.

Overall, the US was the leading site in 2008 in number of international conferences with 1,079. It was followed by France (797) and Singapore (637 meetings) and Japan (575). Korea ranked 12 th with 293 conferences, China 16 th (216), India 23 rd (131), Malaysia 31 st (83), Thailand 36 th (64) and Hong Kong 40 th (55).

In Asia, Korea , Singapore and Japan have been enjoying torrid growth in MICE. Among the top 30 countries in terms of the number of international conferences held in 2008, Singapore showed the biggest increase of 426% during 1998-2008, followed by Korea with 241%, and Japan 174%.

As the size of MICE facilities grows rapidly, competition to attract MICEs will likely become even more intense up among countries and cities. According to UFI, t he global association of the exhibition industry, indoor exhibition space in Asia is expected to have added a total of 700,000 square meters between 2007 and 2010. The breakdown in projected expansion (in square meters) includes: China (349,000, including 153,000 in Hong Kong and 80,000 in Macao ); India (79,000); Korea (65,000) and Singapore (54,000).

Amid such intensifying competition, the Korean government chose MICE as one of its 17 new growth engines in January 2009, and announced a development promotion plan (for MICE and tourism) five months later. The goal is to increase the MICE industry's portion of GDP to 1.5% by 2018 from 0.45% in 2007. In Korea the number of international conference and exhibition facilities increased three-fold from four venues in 2000 to 12 in 2008.

The number of international conferences and exhibitions are also increasing fast. According to the Union of International Associations (UIA) data, the number of international conferences held in Korea jumped 182% from 104 in 2000 to 293 in 2008, and exhibitions 310% from 132 to 409 during the same period.

Amid such quantitative growth, the industry is also poised to jump in quality aspects. The representative conferences that will be held this year in Korea include the G20 summit and IMF international conference on Asia . The G20 summit will be the largest gathering, bringing in not only the heads of member countries, but also the heads of the International Monetary Fund and World Bank. Successful hosting of the summit will bring massive economic effects as well as raise the nation's image, which, in turn, can stimulate the growth of Korea 's MICE industry. However, considering the aggressive MICE promotion among its Asian neighbors, necessary steps need to be taken to protect Korea 's competitiveness as an international host.

First, simultaneous growth with MICE-related industries is necessary. Similar to the tourism industry, the value added generated from related industries is much higher than the value added created from the MICE service itself. For example, it would be desirable to include hotel construction into the MICE growth plan in order to ensure sufficient lodging for conference participants. Among the regions with specialized MICE facilities, only Seoul , Busan and Jeju had at least 5,000 hotel rooms as of December 2008. Creating soft infrastructure such as a specialized workforce is also crucial. Like China , it is necessary to attract exhibition convention planning companies from industrialized countries to learn know-how and then to foster professional convention organizers.

Second, niche market strategy is necessary. Since there are limits to competing against Asian countries that are aggressively expanding the scale in exhibition venues, it is necessary to discover niche markets. This requires searching for potential clients suitable for the Korean MICE market. Also crucial is targeting meetings of global companies in Asia . The US corporate meeting market is valued at US$31.74 billion, accounting for around 30% of the global meeting market. Still, globally, there is lack of strategic approach in this market.

hird, the current trend of "green" meeting should be led. Greenhouse gas emission reduction efforts are also being made in the MICE industry, and green meeting is a big buzzword these days. There are discussions and plans for such promotions in certain industrialized countries, and Korea also needs to actively introduce green meeting plans to meeting and exhibition sites, to actively lead such environment-friendly trends. Good examples are Songdo Convensia in Incheon, the first LEED (Leadership in Energy and Environmental Design)-certified convention center in Korea , and the establishment of Daegu EXCO, a green convention center.

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