Surekha Ragavan
Oct 3, 2018

Key takeaways from BCD Meetings & Events' 2019 forecast report

The report highlights the short hotel supply in key Asian cities, the emergence of Shenzhen, and more.

Night view of Huarun Tower, Ping An Finance Centre, Tencent Binhai Tower, One Shenzhen Bay and other high-rise buildings and skyscrapers in Shenzhen city. Photo: AFP
Night view of Huarun Tower, Ping An Finance Centre, Tencent Binhai Tower, One Shenzhen Bay and other high-rise buildings and skyscrapers in Shenzhen city. Photo: AFP

Prices to remain stable

Supply of meeting spaces is growing fast in Asia Pacific, but this is complemented by a rise in demand. Forecasts by BCD Meetings & Events suggest that prices will remain somewhat stable. However, exceptions are present in Singapore, Hong Kong and India where demand is growing more quickly than the number of meeting spaces.

Because Asia is more accustomed to shorter lead times (compared to Europe and the US), hotel bookings in under-supplied cities such as Singapore and Hong Kong remain a challenge. In this region, power is also shifting back to the buyers, allowing them to negotiate better rates and terms or to get complimentary extras.

Meanwhile, in New Zealand, a lack of hotels might prove a challenge especially for its busiest meetings city, Auckland. While new meetings space has opened in Auckland, and more is on the way, including the New Zealand International Convention Centre in 2020, this could put added pressure on the city’s overstretched bed supply.

The growth of Shenzhen

Hong Kong has traditionally been a gateway into mainland China, but with increased international air connectivity in Shenzhen, things could shift next year. There are now flights linking Shenzhen with 45 international destinations in 20 countries, including Australia, Germany and the US. Shenzhen is just across the border from Hong Kong, and is home to major Chinese companies, including Tencent, ZTE and Huawei.

Besides that, the opening of Beijing’s new international airport, Daxing International Airport, next year will mean that buyers must decide which of Beijing’s two airports is most convenient for their travellers’ destinations. They can also expect price promotions, as the two airports compete for business.

The boom in India

In 2018, meeting numbers in India have grown by a significant 25 to 30% with Chennai, Hyderabad and Gujarat being popular destinations. Because of this sharp rise, meeting room rates will also see a rise of about 5 to 7% next year. Meetings are mainly held in Western-branded hotels, as there is little capacity in Indian ones, and hosting large events is challenging because of a lack of convention centres.

According to the report, air travel in India is growing faster than in any other market. Even expanding as rapidly as 18% over the same period, supply is struggling to keep pace. Low-cost carrier (LCC) and market leader IndiGo continues to expand, matching the market with a 22% increase in passengers during the first half of 2018.

However, the situation is slightly different globally. Growth in supply has been weak, mainly because India’s two main international gateway airports, Delhi and Mumbai, are full. Some airlines have responded by operating larger aircraft, or diverting international route expansion to other cities, including Bangalore, Chennai and Hyderabad.

Data privacy and security concerns

Asia Pacific has taken to digitisation smoothly and seamlessly as more teams are implementing tools to automate processes, boost productivity, reduce costs, and roll out new products and services. However, the report says that the sheer size, diversity and complexity of this region imply there is no one-size-fits-all solution for digitising meetings here.

On top of that, concerns over data privacy and security remain high in light of multiple high-profile data breaches. The region also faces challenges with a lack of cohesive regulation among markets and a general weakness (or absence, in some markets) of regional cybersecurity infrastructures.

Importance of attendee journey

Because Asia-Pacific records a very high use of mobile devices, online web registration and electronic engagement are standard for the region, so there’s inevitably a shift to communicating with attendees via digital platforms to enhance their overall experience.

Due to this, more planners are showing greater interest in engaging attendees through mobile apps. While attendee journey hasn’t been historically important to the region (because of cost), connecting with attendees through various touchpoints is predicted to be increasingly important, especially by way of mobile.

The future of SMM

Because there is no standard approach to commissions across this region and that most meetings are managed very locally (as an expansion to an existing program), the region has reduced commission opportunities compared to the rest of the world. This means that centralised funding methods have been more traditional.

As managed programs develop visibility into behaviours and spend transparency improve, there could be an opportunity for commissions to play a larger role in higher use of commission for funding in the future. However, this is likely a longer-term development a long way off and utilising hybrid funding models could prove to be the better option in the long run.

Source:
CEI
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