LONGHAUL MICE buyers are witnessing a surge in demand for Asia as air travel into the region becomes cheaper and more accessible thanks to the ambitious expansion of Middle Eastern airlines across the world.

Magdy Ibrahim, managing director of Smart Solutions, Dubai, said: “We are increasing our focus on Asia as it is getting so much more accessible and cheaper.”

While 40 per cent of his corporate groups are already heading to Asia this year, with the remaining opting for Europe, Ibrahim predicts Asia’s share to grow to 50 per cent next year.

“The new Middle Eastern flights into Asia help to encourage healthy competition between the carriers, which is great news for us as Asia becomes cheaper with all the airline promotions,” Ibrahim added.

Sharing similar sentiments, Bulgaria-based Hermes Holidays’ principal Violeta Rousseva said the airfares into Asia have especially become more affordable since the entry of the Gulf carriers.

Pointing to Thailand and Indonesia as his top-selling destinations in Asia, he said: “It becomes easier to sell these countries and furthermore it is not expensive to host luxury dinners and incentives in these destinations so the whole package (flight, hotel and activities) becomes really attractive.”

Katarzyna Mazur, junior project manager of Nu Horizons Poland, views Asia as a fresh destination. “We see growing demand from clients to host incentives and meetings in places like the Philippines and Malaysia.”

According to her, the cost of flying from Poland to Bangkok today is some 30 per cent lesser than four years ago with the presence of carriers like Emirates.

Monika Valleton, managing director of ATJ Lingwista in Poland, added that the lure of history and culture in countries like Thailand and Cambodia makes Asia a “dream destination” for her clients.

Apart from the Middle Eastern carriers’ connections, she had also chartered a plane for a company to Phuket earlier this year.

Valleton said: “There is a general growth in interest and excitement from our clients into this part of the world (Asia). It is very positive.”

Smart Solutions’ Ibrahim commented that the ease of visa regulations in countries like Indonesia has also boosted the interest. He said: “One of Asia’s added advantage is the (people’s) warm hospitality which makes it very welcoming for our delegates’ overall experience.”

Phuket, Thailand

CLIENTS’ search for more novel destinations may be the bigger threat to Thailand than issues on perception of safety following last month’s series of co-ordinated bomb blasts in popular tourist spots including Phuket and Hua Hin.

Incentive and meeting planners interviewed said Thailand remains resilient, but emerging destinations such as Vietnam and Cambodia look set to be its contenders for a slice of the MICE pie.

The kingdom’s resilience is attributed to its attractions and value-for-money proposition, aside from its image as being relatively safe.

Yoo Jae Eun, assistant manager of Hyundai Dream Tour, South Korea, said: “There are security threats in many areas of the world and in comparison Thailand is still considered rather safe and is still a very attractive place for our groups.”

Yoo added that she is optimistic Thailand will still be one of the top destinations for her clients who prioritise shopping in their incentive programme.

Sharing similar sentiments, Andrzej Rutkowski, sales manager and group advisor of Supertour, Poland, said: “There is no major issue with that (bomb attacks) and our clients are still proceeding with their plans to Thailand.”

Explaining the lure of the destination, he said: “It is not easy to find luxury hotels and restaurants at the low prices that Thailand offers.”

While Singapore-based Mice Matters’ director Melvyn Nonis had to redirect a corporate group to Hong Kong from Thailand during the week of the bombings, he said: “Thailand provides the total holistic package of shopping, nightlife, great food and, most importantly, is inexpensive as a destination.

“The country has already been through floods and riots but you see that people keep returning. Clients are generally more forgiving towards Thailand and I am sure they will not be deterred.”

The only thing Thailand has to look out for is competition from other emerging countries, said Akbar Shareef, chairman and CEO of Rakaposhi Tours, Pakistan, who shared that many of his clients have visited Thailand several times beforehand hence consider Vietnam especially as a “fresh new destination”.

Unilever Industries’ APAC regional travel head, Geetha Arekal, agreed, saying: “Vietnam is the next big destination for MICE because the facilities for IT and accommodation are growing better and stronger and they show that they are ready for business.”

Supertour’s Rutkowski is also seeing a growing interest in the emerging part of South-east Asia where there is “a lot of new and unique historic venues that we can hold meetings and incentives”, citing the renowned Angkor Wat complex in Cambodia as an example.

THE completion of Marriott International’s US$13 billion acquisition of Starwood Hotels & Resorts Worldwide last Friday is greeted by corporate travel managers with more enthusiasm than apprehension.

Corporate end-users interviewed said they now gain access to Marriott/Starwood’s massive inventory by dealing with just one supplier, even if the company’s greater scope and size may give the chain the upperhand in rate negotiations.

The consolidation results in the world’s largest hotel company with 5,700 properties and 1.1 million rooms across 110 countries.

Said Nandan Bhatia, head-administration & facilities at Indian food conglomerate Britannia: “Direct tie-ups with hotels are always preferred as they give us special corporate packages. Now with Starwood properties combined with Marriott, this gives us much more options.”

Britannia spends an estimated Rs300-500 million (US$4.5-7.5 million) a year sending between 400 and 500 employees on business and MICE trips.

Bhatia said he saves “at least 10 per cent” by dealing directly with hotels, a sum made even more significant as travel budgets get tighter.

Admin manager Philomena Seet, who manages travel for Singapore-based Kseven Industries’ top executives, told TTG Asia that Starwood properties are frequently used and the merger will boost her portfolio selection as her company is now automatically a client of Marriott.

Seet is unfazed by Marriott/Starwood merger’s expected additional negotiating power as the value provided by a hotel is her topmost consideration.

“Four-star hotels are just about right (for business travellers). The best are those that provide the value of a five-star property at four-star prices – that will make me a repeat customer,” she said.

Seet also liaises with hotels directly to negotiate the best corporate rates, resulting in about five to 10 per cent savings for the company.

Claire Kang, purchasing & travel manager at International Vaccine Institute, said dealing directly with hotels has been the modus operandi for the Seoul-based, UN-backed nonprofit. The corporate negotiated rates she gets gives her savings of up to 25-30 per cent.

When asked if she is anxious about Marriott’s greater bargaining power over rates, she said: “They have always tried to negotiate with us over rates even before the merger. We establish annual agreements with them so I am not so worried now. When the time is up, we will request for bids as usual and see how it goes.”

For Kang, who sends her staff all over the world, including third-world cities, traveller safety and dependability of the hotel are primary concerns.

Furthermore, she is accountable to donor governments and charity organisations such as the Bill & Melinda Gates Foundation. Hotels that are too expensive will price themselves out of the budget, she added.

Some corporate segments however, have different considerations. While corporate negotiated rates do offer savings for Lisa Knevitt, travel and events manager-Asia/Pacific at Cook Medical, the location and standard of hotel properties are bigger priorities, especially as budgets remain strong in the medical profession.

As well, given her company’s longstanding relationship with Starwood, Knevitt is excited about the extra value in the form of redeemable points and roomnights that are now usable across Marwood’s 30 brands.

While loyalty programmes help Britannia’s Bhatia in the selection of hotels for repeat visits, he opined that no single hotel company can meet all his company’s travel needs.

For that reason, he still works with TMCs like Thomas Cook to get a better gauge of prices and perform due diligence with multiple RFPs, and attends tradeshows like IT&CMA to meet other hoteliers.

CRUISING is increasingly accounting for a greater proportion of global MICE revenue as cruise lines continually upgrade their offerings to cater to the diverse needs of groups big and small.

Diana Bloss, director of operations at Worldwide Cruise Associates, a specialist in organising cruise products for incentive buyers and meeting planners, said the segment is “very definitely” taking up a larger portion of the MICE pie.

She has seen healthy year-on-year sales growth of “approximately five per cent, keeping in mind it is a contested election year in the US, which always has an effect”.

Affirming Bloss’ observation, Celebrity Cruises associate vice president, corporate incentives & charter sales, Lisa Vogt, said: “MICE has been picking up momentum in recent years and is continually gaining more share of our overall business year-over-year.”

MICE business is also a growth area for Royal Caribbean Cruises, taking up roughly 30 to 40 per cent of total sales in markets like Thailand and Indonesia, according to Sean Treacy, managing director Singapore and South-east Asia.

But it differs from market to market as sailings out of Singapore sees MICE account for a more modest five to 10 per cent of bookings, he added.

Better telecommunications is one essential enhancement that is propping up MICE demand for cruises, Bloss pointed out, especially as Norwegian Cruise Line, Carnival Cruises, Costa Cruises and Royal Caribbean had this year rolled out upgraded Wi-Fi facilities powerful enough for Skype teleconferences.

“Our MICE groups really appreciated it when we introduced our super high-speed internet, called Xcelerate, across our entire fleet,” remarked Vogt.

Another major draw for MICE groups is the all-inclusive nature and flexibility of cruise products, explained Vogt, who sees uptake from across various sectors including pharmaceutical, insurance, franchises and direct selling companies.

“It is growing as a popular choice for incentive travel and corporate meetings and events,” she said.

Bloss concurred: “Our sales are pretty equal between whole ship charters and groups..It depends on (cruises ships’) availability and location.”

THE lifting of the ban on Indonesia carriers by the US Federal Aviation Administration (FAA) has Garuda Indonesia eager to restart services to the US, and the MICE trade expects this to rekindle interest in Indonesia as an incentive destination.

Following FAA’s upgrade of the country’s aviation status to Category One on August 16, a move that opens the way for Indonesia airlines to initiate flights to the US, Garuda Indonesian has stated its intentions to fly to the US next year.

“The plan to fly to the US is part of Garuda’s business expansion to strengthen its position as a global (airline) player. With the FAA rating upgrade, we are trying to materialise our plan even sooner,” said Benny Butarbutar, vice president corporate communications for Garuda Indonesia.

Benny said the current plan was to operate a wide-body Boeing 777-300ER aircraft via Tokyo Narita for the US service, leveraging the fifth freedom rights enjoyed by Indonesian carriers with Japan.

Based on its projection of 400,000 passengers a year for the US sector, Garuda plans to fly to either Los Angeles or New York. The airline used to operate the Jakarta-Honolulu-Los Angeles route in the early 1990s but the service was terminated during the Asian financial crisis in 1997.

Awaiting the potential new connection is Mario Scozia, executive director A&A Incentives, Meetings & Conferences, US. He said: “With proper time and marketing efforts as well as support to dedicated loyal suppliers such as ourselves, I believe that (Garuda’s planned US flight) will do well and gain a solid share of the business, especially on the Los Angeles-Denpasar route. Bali would be the primary destination.

“We are using other airlines now with connections but losing the in-flight Indonesian experience (without an Indonesian national carrier),” remarked Scozia, adding that Garuda’s flights from the US to Indonesia and Bali in the early 1990s helped the industry to grow its Indonesia business.

Susilowani Daud, president director of PACTO Convex, agreed that having a national carrier with good air connections worldwide would definitely “help in promoting a country” on the global MICE stage, and comes especially vital at a time when security and accessibility are “top considerations” in securing bids.

Garuda’s prospective service to the US next year is also opportune, added Susilowani, as Indonesia will host the World Bank Conference in Bali in 2018 with 15,000 participants expected.

Iqbal Alan Abdullah, chairman of the Indonesia Congress and Convention Association, said: “Incentives from the US are a big market. Indonesia has received some groups from the US-affiliated companies, but improved accessibility will definitely help.”

But he also questioned Garuda’s commitment to its services, as he opined the carrier had in the past abruptly plugged services on routes that did not return quick yields.

“Marketing and preparing for MICE (groups) takes time, and we want to make sure that by the time the group travels the service is still there,” Iqbal said, urging the national carrier to do a thorough assessment of the market before initiating the service.

Meanwhile, Scozia expects Indonesia to start building awareness of the country. “Open a tourism office even if it is staffed by one person, (rather than) a representation company,” he remarked.

Other ways Indonesia could step up promotion includes hosting workshops and inviting incentives planners and their main corporate clients to experience Garuda’s services.