Hong Kong Handover: How has the event industry evolved?

The return of the former British colony to China in June 1997 was one of the territory’s most momentous events. The Handover of political control was also one of the most significant events in the city’s then fledging MICE sector.

More than a thousand international journalists flew in to cover the affair, and for years before the historic ceremony took place in the (brand new) Hong Kong Convention & Exhibition Centre (HKCEC), the city’s visitors’ industry actively debated how best to promote the once-in-a-life time event?

One hotel—The Excelsior—cleverly announced nearly a year before the Handover that their room rates would be increased to HK$1,997, then considered an exorbitant rate. But the rooms were quickly snapped up and other hotels soon followed with price hikes.

In last two decades Hong Kong’s MICE sector has seen a tidal wave of change; in 1997 Hong Kong had less than a hundred hotels, and less than 40,000 rooms. Last year, there were almost 270 hotels with more than 75,000 rooms.

But there’s also been fiercely increased competition from China and Southeast Asian neighbours, as well as a boom in professional event planning agencies. To get some personal perspectives and future predictions, CEI spoke to a range of MICE experts.

Birth and boom of the events industry

On how client expectations have changed, Natalie Ackerman, senior VP of Jack Morton, which opened its Hong Kong office in 1996, notes: “Twenty years ago clients were asking for ‘events’, but today we talk about creating deeper and more meaningful brand experiences. There are a multitude of agencies around today, each saying similar things, so it’s important for us to differentiate what we bring.

“Also, over the years, we’ve seen corporations set up their own event departments. And as the world of marketing evolves, and dollars are allocated across a variety of channels, we see demand for greater value with the same high expectations of delivery, and we strive to deliver measurable results.

"The pace is faster than ever and we see ever shorter lead times, so we need to be nimble—which benefits us as a slightly larger agency with more resources on hand.”

Daphne Choi, managing director at Uniplan Hong Kong, which opened its office in 1986, has seen its team grow from ten to more than 100.

“At the time of the Handover the event agency landscape was almost non-existent," Choi says. "Our chief global development officer, Karen Ardnt, was one of the few event professionals working on the 1997 Farewell Ceremony. At the time, only two or three agencies pitched for the massive event — which really set the standard for the event industry in Hong Kong.

"After the Handover, the industry grew and changed substantially. Large international events companies begin entering, bringing a wealth of expertise and experience. Many of these international agencies acquired smaller local agencies to merge their international experience with local know-how. And traditional exhibition companies began to transition into event agencies."

In future, says Choi, event agencies will need to be much more sophisticated in branding, digital experiences and end-to-end communications.

“Nowadays technology is a huge player, changing the way brands connect with audiences," she says. "Since the Beijing Olympics, China is becoming a global leader in large scale innovation and live experiences and has been progressing quickly.”

China—market partner or market predator?

According to Choi, Hong Kong’s event market is shrinking, while more and more opportunities are cropping up in China.

"Smaller integrated agencies are emerging now, making it harder for event organisers to remain viable. One of the key challenges we’re facing is the lack of government bodies to govern the event space to help organisers and coordinate governmental departments. This becomes particularly important for outdoor and public events where multiple permits are required.

“We expect more integrated, strategic alliances between companies, brands, and governments. Large global events—such as Art Basel, Longines Masters, and Formula E, have come to Hong Kong in recent years, changing the landscape of Hong Kong's event industry drastically.”

And as China becomes one of the industry’s global leaders, Choi says, “we definitely see a closer alignment to our China offices moving forward with more opportunities.”

Hong Kong hotels and the growth of MICE

Ian Tan, convention and incentive sales director at Kowloon Shangri-La, says that among the key changes which have taken place in Hong Kong’s MICE business has been “an emergence of venue sourcing agencies that work as a go-between with clients and the hotels".

"We also see a growth of Business Travel Management companies (MNCs) who have global accounts with multinational corporations to manage sourcing. In some cases, they receive a management fee to organise client events. Previously, most MNCs worked with travel management companies to outsource arrangements for flight tickets, hotels, transfers, and offsite dinners.”

Tan also sees greatly increased competition from nearby destinations. “Our neighbours’ NTOs are investing heavily in marketing campaigns to promote their MICE business. These countries have ample land and abundant resources to support new attractions and improved infrastructure, whereas we have limited space and new attractions.

"Hong Kong is a unique destination, but the pressure of pricing, exchange rates and competition from neighbours means Hong Kong must intensify its marketing efforts.

“Prior to 1997, China’s outbound MICE business was almost unheard of. The bulk of MICE groups from Asia were from Japan. Post-handover, China’s relaxed visa policies—both in-bound and out-bound—along with improved flights have boosted business dealings into and out of China. At the same time, this presents Hong Kong with more MICE opportunities."

Another vast change since 1997, says Tan, is the “ease of email and social media platforms, such as WeChat".

The Island Shangri-La’s events management director, Sharon Lee, agrees that Hong Kong must now "aggressively compete" with other countries.

"The city would benefit from a competitive pricing structure, more cultural-experience programmes and extra staff support—as service expectations are always high,” she says.

Looking ahead to 2037

Looking to the future, the Kowloon Shangri-La’s Tan predicts “new hotel openings within and outside the city, new attractions in neighbouring countries and relaxed visa restrictions will further intensify competition in the region,” while Sharon Lee says future challenges will include tighter budgets and Hong Kong’s relatively high prices.

Likewise, the Hong Kong Tourism Board predicts that regional competition “will become more fierce.” But thanks to such major (ongoing) infrastructural projects as the airport’s third runway, the Guangzhou-Shenzhen-Hong Kong Express Rail Link, and the Hong Kong-Zhuhai-Macau Bridge, this marvelously resilient city will surely meet the coming challenges between now and 2037.