Delving into the data

As you will have already seen in this issue, there is a lot of data. Once you get into it, it is hard to see the forest for the trees, as the saying goes. However, let's consider a few key factors and the broader ramifications for the incentive segment. For example, the results show that most CEI projects are home-based, that is, incountry rather than overseas. This reflects that in Asia Pacific you don't have to go far to find world-class venues to hold CEI activities. Also important is that Singapore and Hong Kong are the two biggest respondents. This therefore biases the results toward those markets as a source of business and as destinations for the same reasons. Again, the in-country venue preference shows through. Another factor to consider is that incentives as a segment are well down the list of CEI projects, behind meetings, conferences, exhibitions, product launches and even teambuilding. Surely some of these are actually incentive-based activities? Back to Singapore and Hong Kong. In both cases they are big markets bulging at the seams, geographically speaking, thanks to land reclamation. Regional leaders While both Singapore and Hong Kong have excellent hotels, conference centres and exhibition facilities, they can't really host homegrown incentive trips due to their lack of physical size and diversity. To put this another way, everything you might offer an overseas incentive group in Hong Kong or Singapore, the locals probably do on the weekend anyway. However both are excellent incentive destinations provided you live somewhere else. By comparison, other places such as Thailand, Malaysia, China and Australia offer their nationals a host of in-country incentive destinations that are not on your average weekend agenda. You might ask yourself, where is he going with all this? Well it all comes back to how you read the results, once you remember that Hong Kong and Singapore are the domi-nant respondents but not typical when it comes to the incentive segment in particular. I believe that meetings and conferences are ill-defined — when is a meeting a meeting and not a conference? Surely the line here has to be blurred. But I am more interested in when a meeting or conference is actually neither, but instead an incentive trip parading as a meeting or conference. If you take the position that incentive trips are defined as whenever a person, or group of people, have to qualify or reach a target to attend, then that in my book that is an incentive reward, which admittedly has a meeting or conference component. Next year I want to see a question about primary purpose and, for meetings in particular, the following question, would they have taken place if the sponsoring company didn't make its annual target the previous year? By my estimation the incentive segment is well understated in value and volume terms. It isn't any wonder when hotels and resorts regularly quote higher rates for incentive groups than they do for an equivalent conference group. It is time this practice came to an end. Another factor in markets like Australia is that conferences get more favourable tax treatment than incentive trips. 'Important influences' and 'Selecting an incentive destination' make interesting reading. There are three key factors: firstly economic growth in the region, in particular the economies of China and India plus the economic recovery in the two big markets, Singapore and Hong Kong. Second is the issue of security. Ever since 9/11 security has been a concern. Now after the second bombing in Bali and unrest on the Malaysia/Thailand border region, we have CEI buying decisions being impacted upon significantly, particularly in the case of Bali. Finally, the third is pricing. Here we see the traditional issue of what you get for your money. Comparisons between destinations and competitive shopping are inevitable. Here it is worth issuing a warning to the destinations that have repriced rapidly upward in line with or ahead of rates of economic recovery. Be careful not to price yourself out of the market and, to Hong Kong in particular, don't let the same thing as happened in the late 1990s happen again. Australia shines When it comes to top revenue sources, the Australians are in equal first place with China. One can deduce that Australia must still be supporting the two big respondents, Singapore and Hong Kong. Certainly the frequency of flights into and through these cities from Australian cities supports that, but I am not totally convinced. Australia has had years of economic growth, a reasonably strong currency and an ageing baby-boomer population that enjoys travelling and that can well include going to conferences more now that their children have grown up. All this is somewhat unique to Australia (and New Zealand) by comparison to the rest of the region, so Australia's place as top producers near the top could be true. While on matters Australian, those respondents referred almost exclusively to Australian-based projects last year and those proposed for 2006. This is in contrast to Asian destinations seeing Australia as the equal top spender — go figure. Anyway the Australians did nominate Thailand as their top offshore destination and this would be largely incentive-segment driven. I suspect that the intention is to support Phuket, in particular, with its post-tsunami recovery marketing push. Phuket is also getting direct flights from Australia for the first time so I am sure this helps them, plus they will be getting business diverting from Bali. The poor Balinese — it isn't fair what has happened to them so let's hope 2006 is incident- free for Bali and that people finally get the fact you can't predict acts of terrorism and return to this world-class destination. In-house capability On the survey results for 'Outsourcing', it is very clear that a lot of corporate end-users prefer to build an in-house capability. My comments on this are twofold. Firstly, most large MNCs prefer to allocate their staff resources to their own core business activity and not in providing support to internal customers. In other words, find a good agency and task them with the responsibility, monitor their performance and externalise the CEI project management tasks with the exception of one or two people to issue briefs and monitor KPIs. In Asia they are bucking this trend. I hate say this but I suspect it is because they find agencies lacking in capability by comparison to agencies found in Europe or North America. In these more mature markets, agencies tend to be larger businesses run on highly professional lines. The learning here for agencies serving the CEI markets in Asia Pacific is simple — lift your game to get a bigger share