THE FIRST-EVER direct service to Beijing to be launched by South African Airways later this year is expected to substantially grow South African corporate business to China.

Jenny Campbell, owner, Travel Partners South Africa, saw a 30 per cent increase in bookings to China last year and expects the new air link to “really push up demand”.

The only other South African buyer at the show, Leona Meadows, owner, Select Incentive Group Travel, added: “Demand for China has been strong for South African businessmen because it is a good sourcing ground for products that can be repackaged and sold back home. Much of my corporate traffic to China also comprises attendees of trade shows held here.”

Both buyers said the only difficulty in selling China was the limited supply of quality hotels within the vicinity of convention centres, with hotel star ratings falling short of clients’ expectations.

Meadows said that she had had corporate clients demanding a change of hotel after realising that the local five-star hotel was not “in the client’s mind” the equivalent of a five-star international hotel.

“That’s my other mission on this trip, to meet the hotel representatives and see for myself what the hotels really offer,” she said.

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.

EVENT negotiations that were put on hold following the triple-whammy Japan disaster are being restarted, with new enquiries from planners trickling in slowly but surely, according to Japanese MICE officials.

Chiba Convention Bureau and International Centre’s convention division manager, Takeo Katsura, said: “We are starting to see new enquiries coming in from international convention organisers and, with Tokyo Disneyland slated to reopen on April 15, Chiba and the surrounding Japanese cities can expect to see a stronger return in business.”

The theme park closed when visitor numbers dwindled after the tsunami.

International conferences with large numbers of delegates are carrying on, including the 1,400-pax Academy of International Business Annual Meeting in Nagoya in June, a 10,000-pax microbiology conference in Sapporo in September, and the 8,000-pax International Union of Architects in Tokyo in September.

Large conferences may be a challenge to move and are thus staying put, but Japan is also seeing interest returning for smaller meetings. JTB Okinawa said it would be receiving a 200-pax meeting group from Hong Kong spending two nights in Okinawa, about 1,775km away from the crippled Fukushima Daiichi Nuclear Power Plant, next month.

The agency’s inbound general manager, Toshihide Ozaki, said: “We are also answering three RFPs from major travel agencies in Singapore and Bangkok. Although these are for leisure groups, such interest reflects confidence in Okinawa and we hope more enquiries for meetings and incentives will follow soon.”

Japan Convention Bureau executive director Kaneyuki Ono believes Japan’s recovery will be swift if only MICE planners understood the geography of Japan. He said: “Kyoto, Osaka and Hiroshima, for instance, are far from the affected areas of Sendai and the north-eastern coast. MICE venues, hotels and attractions are functioning normally.”

Kevin Mead, president & CEO of IGAF Polaris, an association for accountants that organises 40 to 50 events globally each year, said high prices rather than a nuclear scare were what kept his meetings away from Japan.

“We know that Japan will resolve the nuclear matter eventually. Instead, it is the appreciation of the Japanese yen against the US dollar that is keeping us away. Japan is expensive compared to other destinations in Asia. You would think that now is the perfect time to take your events to Japan since demand is down and prices will be cut. That has not happened.”

Kip Horton, president, international division, HPN Global, sees a bright outcome. “There will be meetings on atomic energy and others related to the rebuilding of the country,” Horton said.

AFTER the first upsurge in China’s leisure outbound, the country’s MICE business is being touted as “the next wave”, and the trade is homing in to court a market with deeper pockets and more discerning tastes.

Sol Melia Hotel & Resorts recently set up a dedicated sales team for Chinese outbound and now has an office in Lujiazui to “be closer to” corporate clients in the central business district.

“We’re trying to push outbound MICE to our properties around the world. All of my hotels from Bali to Madrid are asking us for more clients,” said area vice president sales, Asia-Pacific, Sharon Lee.

Shanghai CS Innovation Consulting director/GM, Joseph Sze, representative for tour operators such as Tour East and Lac Hong Voyages, observed a sharp increase in incentive groups, with no longer just China-based MNCs driving the growth, but also state-owned enterprises and local private companies. “There’s a change in mindset now. With the economy improving, companies realise the need to reward their staff,” he said.

Sze said instead of the usual incentive holiday combining Singapore, Malaysia and Thailand, clients were now exploring destinations such as Vietnam, requesting for special themes, and getting savvier in negotiating for better prices.

Sze’s incentive business grew by 10 to 15 per cent last year and he expects it to climb by another 20 per cent this year. Budgets have also risen by 15 to 25 per cent compared to 2010.

China International Travel Service Shenzhen sales supervisor Angela Cheuk, who noted a 30 per cent rise in incentives from September to March, said: “Local companies are now hiring travel arrangers to plan their incentive trips rather than doing it themselves. They have also started to specially set aside budgets for incentives.”

Companies are also asking for a training component as part of the programme, she added.

Grand China Express International Travel Service vice president Ni Hui said local companies were starting to learn from China-based MNCs, which have started to take a second look at longhaul destinations from end-2010 due to the return of business. Thus far, automobile clients such as Michelin, Hyundai and Kia were sending groups to France, Spain and Hawaii respectively, he said.

Ni said overseas meetings were the fastest-growing business segment. Meeting sizes are also swelling, from 1,000 pax three years ago, to 4,000-5,000 pax now.

SONGJIANG District is promoting itself as the new MICE valley of Shanghai.

One of the 18 districts of Shanghai located about 30 minutes by train from the city centre, it is home to three five-star MICE-friendly hotels, Le Meridien She Shan Shanghai, Sofitel Shanghai Sheshan Oriental and Songjiang New Century Grand Hotel Shanghai, providing close to 1,000 rooms.

“We now have a mix of domestic and international meetings, thanks to the presence of many Fortune 500 companies with offices in Shanghai. But we want to have a more focused action plan to convert Songjiang District into a ‘meetings valley’ and attract meeting groups from the city,” said Sun Hong Jian, a senior officer with the Songjiang District Commerce and Tourism Division.

She explained that Songjiang’s close proximity to Shanghai’s city centre would allow event planners to twin both destinations or provide corporate groups a quieter alternative.

Sun’s action plan includes hosted site inspections for meeting planners, and organising table-top meetings and forums that bring together corporate clients and Songjiang’s suppliers.

However, Sun admits that Songjiang’s ambition is faced with two key challenges �?? the lack of experienced destination management companies or travel agencies with experienced meetings operations, and the district government’s limited understanding of MICE.

“The concept of MICE is still very new to us. We have realised that there’s so much more to MICE than just meetings. We have to attend seminars like this (China (Shanghai) International Meetings & Conference Forum) to learn about the business and how else to make Songjiang District more attractive to corporate clients,” she said.

THE HANGZHOU Tourism Commission has set up a new MICE division, which is rolling out a number of initiatives.

Already a rising star in leisure, with international hotel brands from Amanresorts to Four Seasons making a beeline for Hangzhou, the capital city of Zhejiang wants to be accessible to planners. Roger Shu, manager of the division, said a dedicated website with information on event venues, MICE hotels and other suppliers would be launched in June, first in Mandarin, then English, and eventually in other languages.

The division is also organising forums, training and destination promotion in partnership with industry experts. Just last week, it ran a three-day training led by The International Congress and Convention Association (ICCA) president Arnaldo Nardone and experienced MICE players. It has also enlisted the help of the United Nations World Tourism Organisation (UNWTO) to promote Hangzhou as a MICE destination to overseas markets.

Intercity cooperation is also a key. Shu said: “We are breaking down barriers with the other cities in the Yangtze River Delta (Shanghai, Suzhou, Ningbo and Nanjing) in bidding for major events. An event could have its meeting in, say, Shanghai, then its post-meeting leisure programme in Hangzhou. That is the arrangement we have suggested to ICCA for its congress in Shanghai in 2013.”

Li Hong, director general of the commission, said a “massive convention centre” was being built in Hangzhou and would be completed in 2015. While Li was unable to provide facility specifications of the Hangzhou International Olympic Centre, he said it would be “a very impressive venue for MICE”.

Meanwhile, a Hangzhou MICE association has also been established to facilitate networking among local players. It comprises 100 members across industry sectors including hotels, travel agencies that deal with MICE groups, and planners.