Article By Leah Rusia-Beselidze Director | Head of Consultancy Services at Cushman & Wakefield | Veritas Brown
Industry predictions indicate that the MICE (Meetings, Incentives, Conferences and Exhibitions) sector is poised for vigorous growth.
On the background of the regional financial instability it’s springing back and is positioned stronger than ever. The demand for meetings is on the rise and though companies are not splurging, the expensive venues are not being ruled out either. Based on Cushman & Wakefield | Veritas Brown (CW|VB) research publication MICE tourism is considered lucrative by hoteliers whereas the revenue generated by this segment is a few times more than leisure travelers. Also taking into consideration that up to 60% of the local hotels’ occupancy is being formed by corporate demand that is about 70% generated by MICE.
Meeting and conference demand is at its peak since 2008, there is growing demand across all sectors, governmental and corporate – healthcare, sports, and energy. Georgia is not only the one of the most attractive tourism destinations of the Caucasus Region, but also a bustling business hub in the very heart of the region and cross road of Europe and Asia, thus MICE is becoming the fastest growing sector around. The meeting sizes are also growing, resulting in hotels giving preference to larger meetings capable of paying more. Hotels are not as flexible as before when it comes to walk-in bookings, good venues have to be booked well in advance. The rise in demand has also affected the prices increasing slowly. Though value for money is still an important factor, the planners are yielding to prices being a little higher than before.
Whilst the MICE market is expected to continue to exhibit moderate growth, it is dependent upon the prevailing economic circumstances. A confident market will lead to more meetings and incentives whilst a nervous market is liable to have the opposite effect. However, notwithstanding the currency fluctuations and the regions financial instability, 2015 has been quite productive and progressive for Georgian Mice Sector with a number of important events having taken place and planned both in the capital and other cities, including EBRD Annual Meeting in May, European Youth Olympic Festival in July, UEFA Super Cup with Barcelona and Sevilia in August, Investment Forum Batumi in September, Silk Road Forum in October.
One can say for Georgia that it is a young MICE destination. It is encouraging that in the last few years the hotels have invested into the amelioration of the quality of their offers, so that today we have an increasing number of excellent venues. Having said the above the largest meeting/conference capacity that can be accommodated in the country is around 500-600 people, creating a niche for the large well-equipped conference & convention center development. The good example for this was the EBRD Forum that had to be arranged in the Tbilisi Parliament backyard with tents.
Teambuilding activities are also a popular trend, however not in Tbilisi. Almost the full majority of corporate teambuilding events take place out of the city in secluded hotels guaranteeing privacy. Accoridng to the hoteliers of the country’s popular destinations the Group corporate demand is usually lower during the high season, but still at 40% minimum, however MICE generates most of the lodging facilities’ room sales during lower and shoulder seasons.
MICE tourism is the most rewarding type of tourism for the destination development, not only does it have good influence on the extension of the season, which is perhaps the most important factor for the summer and winter resort destinations of Georgia, but also boosts the development of other tourism forms. For one, meetings, conventions and exhibitions create economic value with increased travel and hospitality spending by MICE visitors who combine participation in events with leisure
The MICE industry, in our opinion, is set to move ahead rapidly. Meetings, exhibitions, events are essentially networking tools and will always be the cornerstone of successful businesses. What is needed here is to recognize the changing way in which the world is conducting business; the changing trends which are influencing global economies; the technological revolution which is making its presence felt in the way in which events and meetings are being conducted. Assimilating these changes seamlessly and responding to it with strategic initiatives is what will make the MICE industry stronger than before.