Cheap habits make China a challenge

DESPITE a thriving outbound MICE market (see related story), groundhandlers and suppliers observe that Chinese incentive groups drive a hard bargain, doing away with DMCs and choosing to deal directly with hotels as much as possible.

A Singapore-based DMC, who did not want to be named, cited an instance where two Chinese incentive groups from a luxury brand asked for proposals, but ended up hiring the DMC to only provide land transfers.

Said the MICE manager: “They came to Singapore several times for site inspections, got ideas from me and asked which hotels I recommended, but later went off and did the programme on their own.

“The Chinese market is just starting to be conscious of what incentives are about, and the end-users think that by organising things themselves, they can save money.”

The same DMC said that despite earning only S$1,000 (US$801) from the deal, it was also asked if it could provide free mineral water, vehicles to be stationed at the hotel at the groups’ disposal and even help source a speaker.

Malaysia-based Sunway Resort Hotel & Spa senior sales manager Joanna Lee also noted similar behaviour. “They are still very price-sensitive. A few Chinese agents have started to negotiate directly with the hotel instead of liaising with tour operators.” This is especially apparent for shorter incentive programmes such as one-day events.

Lee said the contradiction was that Chinese buyers would come to trade shows demanding to have the most expensive hotel, but ended up complaining that the rates were too expensive once the actual contract was presented.

Noting that topnotch clients such as banks preferred to go direct to hotels, Indigo Pearl Shanghai office sales representative Mimi Zhang said the Phuket-based resort set up its Shanghai office two years ago and was at IT&CM China to make contact with corporates.

However, the Singapore-based DMC manager said a growing awareness of MICE might halt this trend, as Chinese buyers start to see the importance of a middleman.

“China (planners) are becoming more sophisticated in their needs. At least, what they want is getting closer to what a real incentive is. More education will help,” said the manager.

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