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MICE Tourism

Spring 2011
Enrollment key: MICE08
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Lecture 1

Introduction to Business Travel

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challenges and threats affecting this industry Company Logo . and the major opportunities.Objectives  To acquire the principal definitions in business travel  To appreciate the differences between business travel and leisure travel  To be aware of the structure of the business travel market  To discuss the main impacts of business travel.

ICCA)  In 1 year. individuals are making over 20 biz trips/ year?  Business travel was one of the earliest forms of tourism? Company Logo .500 events took place in 2007. the British spent almost 46 million nights away from home travelling on business?  At the top end of biz market. a rise of approximately 800 over 2006?  Average spending annually by associations. big companies = 3 billion USD? (Source: International Congress and Conference Association .Do you know that«  Over 6.

Company Logo .

International Business Arrivals to Vietnam 1200000 1000000 800000 600000 400000 200000 0 03 05 06 08 09 20 02 04 07 20 20 20 20 20 20 20 Company Logo 20 10 .

consultations. investigations. one-to-one meetings Business Tourism/ MICE Occasional feature of employment Often group travel Discretionary/ floating destinations MICE Company Logo .Principal Definitions  What is Business Travel? ³All trips whose purpose is linked with the traveller¶s employment or business interests´ Business Travel Individual Business Travel Regular and necessary part of employment Often individual travel Nondiscretionary/ fixed destinations Presentations.

Principal Definitions .MICE  Meetings   Conferences. customers. conventions Held by companies and associations in order to facilitate communication with and between their employees. conventions   Events/ Exhibitions  Company Logo . annual general meetings. shareholders and members Usually luxurious and often to attractive destinations Trips for employees receiving from their employer as a prize related to their job/ a means of motivation Corporate hospitality: For creating goodwill and building rapport with VIP customers and potential customers Exhibitions: trade fairs. training seminars. trade shows. product launches. customer shows to which business send sales staff in order to display their products to potential customers to buy and/or to receive expert information  Incentive trips    Corporate hospitality/ Conferences.

 Motivation is not to discuss jobs related issues . exhibitions with conference ± 3 advantages    Exhibition earns revenue to offset the cost of the conference Exhibiting companies can present their products to an interested market Delegates have an additional reason for attending the event Company Logo . the same faith or the same hobby  There are forms of business travel that involve very little travel  One-day meetings held in the seminar room of a local hotel.g.Business Travel  There are forms of business travel that are not business related. i.e.. a party for a group of clients at an entertainment venue within the city  Very often. elements of two or more categories are combined in the same event: e. Associations meet regularly for members to share an interest.

or with colleagues (business tourism) Trip planning Travelling companions Individual business travel ± at very short notice Family members may be included in incentive trips or conference attendance Company Logo . leisure travel Leisure travel Trip payment Where When The traveller ± both customer and consumer Business travel The employer But« Self-employed/ those attending events paid for themselves Incentive travel similar to leisure Many extend into evenings and weekends Mainly coastal.Business travel vs. urban. rural In leisure time Classic holiday periods & weekends Quite infrequently but last longer Holidays .a few months/ Short breaks ± a few days in advance Friends and family Largely in cities in stable. mountain. industrialized destinations In working time Mainly outside holiday periods & weekdays Quite frequently but for short periods Large events organized years in advance Usually unaccompanied (individual business travel).

Infrequent travels .Less experienced and demanding Company Logo .Business travel vs.Longer trip .Cost conscious . leisure travel Business tourist Consumer.More experienced and demanding   Leisure tourist .Medium time of planning .Less budget conscious . not customer Not choose destination Frequent travels Shorter duration of trips Very short to very long planning period .Both customer and consumer .Choose the destination .

biz tourists become leisure tourists Conference programs often have social and cultural programs.Leisure tourist can be the business tourist in their working lives When working day is over. and provide visitors with opportunities to relax and network together After business time. leisure travel Links exist btw biz & leisure tourism: . biz tourists may choose to stay more days as leisure tourists Biz tourist may take along a partner with them who have time for leisure activities Company Logo .Business travel vs.

Structure of the business travel market Buyers Intermediaries Business travel The end consumers Business travel destinations Suppliers Company Logo .

Copenhagen (103 meetings) 7. Amsterdam (98 meetings) 9. Stockholm (102 meetings) 8. France (341 meetings) 7. Austria (236 meetings)  Top 10 meeting cities in 2009 (Source: ICCA)  1. United Kingdom (345 meetings) 6. Beijing (96 meetings) Company Logo . Spain (360 meetings) 4. Paris (131 meeting) 4. China (245 meetings)  10.Structure of the business travel market  Top 10 meeting countries in 2009 (Source: ICCA)  1. Japan (257 meetings) 9. Germany (458 meetings) 3. Berlin (129 meetings) 5. Italy (350 meetings) 5. Lisbon (98 meetings)  10. Brazil (293 meetings) 8. Vienna (160 meetings) 2. Singapore (119 meetings) 6. Barcelona (135 meetings) 3. United States (595 meetings) 2.

inelastic  Dependant on the level of government taxation of business expenses Company Logo .Demand for business travel  Determined in part by the status of national and. spending on business travel can actually rise when the economy is slowing down  Derived demand (# leisure travel ± final demand)  Income. increasingly global economy  More stable than holiday travel and less influenced by fashions  In some cases.

1990 in Davidson and Cope.´ (Smith.Impacts of business travel ³ When we have a convention in town. it is as if an airplane flew overhead dropping dollar bills on everyone. 2003) Company Logo .

Economic impacts of business travel  Higher spending levels leisure travel   greater per capita vale than  Daily expenditure (biz : leisure travelers) = between 2:1 and 3:1 Average expenditure of international meetings = 343 USD/ day/ head UK: £591 million/day (£177 million ± all average visitors)  Induced effects generated by the large number of ancillary activities linked to conferences and exhibitions (=1.5 ± 2 times the direct turnover)  Spending spreading more evenly throughout the year and complementary to leisure demand during troughs (low season. weekdays) Company Logo .

Image  Putting the destinations firmly on the political map  Focusing the attention of key groups of decisionmakers upon the destination¶s potential for professional and business location and development  Establishing and reinforcing the image of the destination as a place to visit for leisure purposes Company Logo .Impacts of business travel .

behaviour and use of facilities  More sustainable nature: use of public transport like trains (domestic business travel)  On the other hand. for international business travel ± by air the most highly polluting mode of transport Hidden costs paid by the society Company Logo .Impacts of business travel ± Environmental  Good geographical spread on minimal impact on fragile natural environment  Typically distinguishable business visitors in dress.

Impacts of business travel ± Social  Hidden economic cost: aviation fuel and airline tickets = no VAT the society as a whole subsidising air transport  Health cost associated with noise and air pollution  Costs of building and maintaining the transport infrastructure to serve airports  Direct and in direct subsidies to the industries to supply the air transport sector Company Logo .

The costs of being a business destination  Costs to attract business visitors  Substantial investment in specialist facilities (for conferences and trade fairs)  Costs to destinations of various externalities of hosting certain types of event Company Logo .

Challenges facing the business travel market  Political challenges  Lack of recognition and contribution from national and local government Lack of standardised and properly defined terminology Difficulties in reliable statistics and regular research Information and communications technology as an actual substitution for business travel E. videoconference  Market intelligence    Technology   Company Logo .g.. goods viewed from a distance. downloading presentations.

institutions and associations + increasing number of business visitors to Vietnam Tourism infrastructure. Taipei. especially the hotel and resort system. The presence of many company head offices. Hong Kong.Business travel industry: Opportunities  Demand side    Increasing volume of world trade A relaxation of border controls A process of internationalisation of not only businesses but also associations Asia (e. Thailand) is challenging Europe¶s pre-eminence Government¶s increased awareness of MICE industry Highly active local associations and businesses (VMIC. Saigontourists) Stable political system. Seoul. is growing rapidly Equipped themselves with facilities and services Experience in hosting international events  Supply side . Singapore.g.Vietnam         Company Logo . attractive diversity in terms of destinations and cultures. Korea.