KOREA Tourism Organization (KTO) will expand its marketing focus to include MICE markets in Europe, the US and the Middle East next year, following its success in tapping China and South-east Asia.

KTO Incentive & Exhibition Team assistant manager, Kim Young Sil, told the Daily: “We were given a significant increase in budget this year and we are expecting another increment next year. With this, we want to expand our market.

“We have had MICE events from Europe and the US, but compared to neighbouring destinations like China and Japan, we feel that the markets’ awareness of South Korea is not really there yet.”

Kim explained that there were instances of foreign trade buyers asking what South Korea had to offer for MICE, and whether KTO represented South or North Korea.
KTO’s 2013 marketing strategy will focus on Western Europe, including Germany, the UK, France and Spain, while in the Middle East the bureau will seek to court high-end corporate meetings and incentives.

Kim said: “Seoul City has made inroads in the Middle East through its participation in the Gulf Incentive, Business Travel and Meetings Exhibitions over the last few years and we are planning to start entering the market next year.”

Besides exhibiting at travel marts, Kim said KTO would also organise its own road shows to target source markets.

“At some marts we will also sponsor the buyers’ lounge which allows us to showcase our destination, performances and health services (for incentive participants),” Kim said.

Destination branding activities will, however, be different for the Asian, European and American markets.

Kim explained: “In Asia, our campaign highlights our modernity – advanced technology, skyscrapers and K-pop music. In the long haul markets, we will showcase our rich culture. Instead of featuring a K-pop dance performance at our booth during a travel mart, for example, we will put on traditional dances or re-enact a traditional wedding.”

When asked if the timing was right to launch promotions in Europe and the US, at a time when these markets are battling economic woes, Kim said moving in now with destination branding and education would set the stage for business once the situation improves.

Several buyers from the US and Europe told the Daily that stronger destination awareness must be established for KTO to succeed in drawing their clients. Real Events Europe director, Caroline Pocock, whose clients are major banks, said: “I think the biggest problem is (we) don’t know anything about (South) Korea. I know where it is and that it has industries, but why should I put it on the map against Hong Kong?”

US Travel manager, Hyun Hee Kim, also called for strong incentives to balance out the high cost of flying clients to and within South Korea and pricey land components. “Compared to other Asian countries, (South) Korea is an expensive destination,” he said.

Meanwhile, Omeir Travel Agency manager-VIP holidays, John Varkey Kailath, welcomes KTO’s move to go beyond leisure promotion in the Middle East.

The kingdom is inching closer to securing a race for the 2014 F1 season after the Sports Authority of Thailand announced that F1 chairman, Bernie Ecclestone, had agreed in principle to a night race on the streets of Bangkok.

Responding to the prospect of a Thailand Grand Prix, Belgium-based travel consultant Marc Lambert of Antipodes Voyages said: “We already run F1 trips to Asia and this is booming business. It would be great if Thailand can secure a place on the race calendar, and it will certainly grow business to the country.”

These events usually attract corporate groups, whereby companies will bring their top customers in small groups. These are high-profile and high-yield travellers, often combining business with leisure.

Groups visiting the Singapore Grand Prix will typically begin the trip with a meeting, attend the race, and then spend a few days doing leisure activities such as golf.
Although the event is a great incentive opportunity, it has limited appeal as interest groups tend to be male-dominated.

Asked how the event may be packaged, Bart Declerck, event consultant of DDMC Event Design Belgium, said: “I see the Grand Prix as a potential incentive for sales people. We always try to match the product to the client, so as a male-orientated high-octane sport, motor racing complements their competitive personalities.”

Hosting an international event of this stature will not only create direct business for the travel sector, but also raise Thailand’s profile as an international MICE destination.

“To secure the race would signify to everyone that Thailand is moving up in the world. It would have a psychological impact on clients who would see the country in a different way,” said Gordon Owen of UK’s Messrs G Owen & Co.

“If the Grand Prix really does come to Thailand, it would help overcome resistance that organisers may have towards the destination.”

Reporting by Timothy France

CORPORATE travel managers in Asia are battling the double whammy of tighter travel budgets and increased travel costs as a result of rising inflation.

With the eurozone debt crisis dampening economic sentiments, companies that have not instituted cost cutting are doing so now. UGL in Australia, which has been able to resist snipping the travel budget since the GFC unfolded in 2008, yesterday announced a major exercise to reduce travel costs by 15 per cent.

“The directive is from the top. Everything is softening a bit, so we want to be smart in the way we pay for our travels. The intention is not to reduce volume as we’re client-driven, but cost,” said UGL’s category manager, shared services procurement, Premah Krishnan, based in Melbourne.

Among measures are reviewing the eligibility of whom can travel business class; reducing the class of city hotels without compromising the safety and well-being of travellers; and mandating an approval from the higher levels for any trip request made within four days or less.

Asked how the new directive would impact her work, Krishnan said: “It’ll be more work because we have to provide monthly or even weekly data to show costs are actually dropping, so we would need to track where the non-compliance is coming from.”

Another travel manager, June Lai, assistant administration manager of Ingram Micro Asia Pacific based in Singapore, said her company had been in “cost-cutting mode” on travel spending since 2008, but rising airfares and hotel rates each year posed a real challenge to savings.

She said: “Our people used to be able to travel business class; we’ve cut that back to economy. While there are no more cuts, we constantly have to look at hotel rates, fuel costs, taxes, etc, which are increasing every year and are beyond our control.”

Observed Dean Fowles, principal, T&E management, global sourcing-services of Rio Tinto in Singapore: “Travel costs continue to go up in Asia-Pacific. Costs never went down in Japan even when it went into recession. Whenever there’s a bad time in Hong Kong, rates do not fall, occupancies fall. Airfares are also not going down – carriers are now good at controlling capacity.”

Joseph Bates, senior director-research of the Global Business Travel Association (GBTA), agrees that inflation in emerging economies, which pushes up costs, is compounding the squeeze being felt by Asian travel managers.

“It is tricky. The developed economies are pumping more money to get growth, which only makes it worse for emerging economies as all that liquidity results in higher inflation,” Bates said.

Yesterday’s closed-door GBTA Global Travel Management Forum saw inflation in Asia and cost of travel as the key concern of travel managers, said Bates.

Asked what advice he had for travel managers, Bates said: “For those whose companies are cutting the travel spend, travel managers must send across the message that while it’s prudent to keep travel in line with lower sales projections in any slowdown, a cut which is further than necessary will hurt their business and the economy.

“As well, to budget for inflation, use available data and information on inflation, so they don’t end up grappling with rising costs which are beyond their control.”

GBTA’s latest Business Travel Index shows the euro debt-crisis hitting the global GDP and global business travel hard. Its projection is for global business travel spend to grow 4.6 per cent this year – half of the growth last year – to US$1 trillion, subject to Europe’s recovery.

GROWTH in outbound MICE to Asia remains flat in many European markets, which has already registered a slowdown over the past year due to the tightening of budgets amid a weak economic climate.

Said Tony Vanvinckenroye, CEO of White Reizen Belgium: “Europe is still in recession. People are travelling just once a year now, instead of two or three times per year.”

Besides unfavourable exchange rates, some consultants also singled out airfares as the primary obstacle to growing outbound MICE travel to Asia.

Gordon Owen, Messrs G Owen & Co, said: “Airfares are a major disincentive for MICE travel, especially when corporate budgets are tighter and companies must demonstrate a financial return on travel for meetings or seminars.

“Asia (offers) better value by far, but for a group of 70-100 delegates, the cost of travel to Asia is high which evokes hesitation from travel managers.”

Asia still commands interest from MICE groups though, driven by its growing air connectivity and infrastructure.

Signalling its competitiveness, South-east Asia has managed to steal cost-conscious European clients from Australia.

Marc Lambert, owner of Antipodes Voyages Belgium, which usually drives most of its traffic to Australia, has seen a 20 per cent rise in the number of MICE groups to South-east Asia this year. He said: “Because the (Australian) dollar is so high, clients are switching to New Zealand and South-east Asia instead.”

Singapore and Thailand top the region as MICE destinations, said European buyers at IT&CMA and CTW, who observed that Singapore attracts meetings, while Thailand is popular among incentive groups keen on multi-country travel.

Reporting by Timothy France

LOCAL government offices have become the latest target audiences of the Indonesian Ministry of Tourism & Creative Economy, which is planning a MICE show aimed at driving government-level meetings and events to 14 destinations across the country.

The destinations identified for MICE development are Jakarta, Bali, Bandung, Jogjakarta, Makassar, Surabaya, Medan, Manado, Semarang, Batam, Lombok, Solo, Palembang and Padang-Bukittinggi.

Explaining the move, deputy minister of tourism & creative economy, Sapta Nirwandar, said: “The government offices have so many meetings.”

He noted that the Ministry of Foreign Affairs, for example, would conduct international and domestic meetings of various sizes, while each directorate general in the Ministry of Public Works would host its own series of meetings.

Recognising that each government organisation has its own policies on meetings and events, Rizki Handayani, director of MICE & special interest marketing with the Ministry of Tourism & Creative Economy, said: “We are collecting data from the various government departments on the decision-makers and the meetings they organise.”

Handayani has learnt that there are six directorate generals in the Ministry of Public Works, and each hosts two coordination meetings with stakeholders around Indonesia every year. Each meeting is attended by 1,000 to 1,500 delegates. These exclude other smaller gatherings held annually.

Handayani pointed out that many government agencies were unaware of the development of MICE facilities and infrastructure around Indonesia, so a MICE show connecting central government officers with Indonesian MICE stakeholders would be beneficial.

The ministry has yet to decide on the show’s format, and one possible arrangement is a tabletop travel mart where local city or tourism government officials and MICE stakeholders are invited as sellers and central government officers as buyers.

Jogjakarta Tourism Office director, Tazbir Abdullah, welcomed the initiative, saying that it would enable the city to showcase its MICE potential, facilities, packages by DMCs and hotels, and the extent of incentives and support available to event planners.

He added that Jogjakarta was ready to host government agencies on fam trips to tour the city’s MICE facilities.

Indonesia Tourist Promotion Board board member, Didin Junaedi, said “an event like this” would drive government events beyond the usual mature destinations in Indonesia, such as Bali and Jakarta.