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AFTER THE CRISIS: FINDING THE SILVER LINING IN THE BUSINESS EVENTS INDUSTRY 29 June 2011 SUMMARY - KEY INSIGHTS FROM AIPC SURVEY • • • Stronger recovery in Asia IMF and S&P Asia Pacific GDP Projections Rising business costs and competition • • • CENTRE INVESTMENTS • • • Centres are planning for expansion and renovation More clients incorporating virtual meetings into physical events Important to make product relevant to market needs BUSINESS STRATEGY CENTRE PERFORMANCE ECONOMIC RECOVERY Rise in gross revenue for Asia’s centres Rise in ancillary services revenue Event clients seeking onestop shop solutions TRENDS & CHALLENGES • • • Growing number of multiformat events Shorter booking windows; Increased negotiation; Higher quality F&B required Greatest challenges lie in competition and travel costs • • • Business partnerships and networks to grow revenue Incentives to attract clients looking for value added services Important to engage in local non-economic development efforts (CSR) UPGRADING PLANS & DEVELOPMENTS IN ASIA Thailand IMPACT Muang Thong Thani 160,200 sqm (MICE 71,500 sqm) Bangkok International Trade & Exhibition Centre (BITEC) 56,000 sqm (MICE 50,400 sqm) China Meijiang Convention & Exhibition Centre (opened in 2010) 100,000 sqm (MICE 89,000 sqm) Chongqing International Expo Centre (To be completed in 2012) 602,000 sqm (MICE 381,680 sqm) 2008 Malaysia & Singapore Subterranean Penang Int’l Convention & Exhibition Centre (To be completed by mid 2014) 70,000 sqm (MICE : 70,000 sqm) Max Atria at Singapore Expo (To be completed By March 2012) 8,000 sqm 2014 Hong Kong & Macau Hong Kong Convention & Exhibition Centre Phase III Extension 91,00 sqm (MICE 91,000 sqm) Las Vegas Sands (LVS) Cotai Strip Expansion 600,000 sqm (MICE 230,000 sqm) India Kolkata Intl Convention Centre 607.000 sqm (MICE 607,000 sqm) New Delhi India Expo Centre XXI 26,000 sqm (MICE 26,000 sqm) South Korea The 2nd KINTEX in Korea (To be completed in Sep 2011) 54,624 sqm (MICE : 54,624 sqm) Songdo Convensia Korea 572,511 sqm (MICE 140,000 sqm) EMERGING CENTRES OF GROWTH EMERGING CENTERS OF GROWTH Asia currently makes up 60% of the world’s population (i.e. 6.5 billion people), and is a strong growing force fueling the world’s economy. GREATER CHINA China, Hong Kong, Taiwan • Population size of 1.6 billion people SOUTHEAST ASIA • • Outbound travel has grown to about 95 million people a year Asia Pacific region continues to be the most popular destination for Greater China travelers SOUTH ASIA India, Pakistan, Sri Lanka • Population size of 1.2 billion people • Outbound travel has grown to about 60 million people a year • Asia is most popular area for South Asia travelers Singapore, Malaysia, Thailand, Vietnam, Indonesia • Population size of 600 million people • Outbound travel has grown to about 78 million people a year • Australasia remains as one of the top regional destination KEY INDUSTRY DRIVERS OF GROWTH FOOD PRODUCTION & PROCESSING Leading industries makes Asia an excellent ground for trading centers & investment opportunities • A third of foreign direct investments are attracted to these key sectors • Key sectors supported by educated, industrious populations ENERGY HEALTH & MEDICAL CARE BANKING & FINANCE ELECTRONICS TRANSPORT & LOGISTICS INFO COMM TECHNOLOGY • TEXTILE & GARMENT RISING AFFLUENCE IN ASIA RISING AFFLUENCE GDP Per Capita at current prices (US$) Source: World Bank, World Development Indicators POPULATION GROWTH (15 - 59 Yrs of Age) • Asia’s rising young & educated working population is the biggest positive factor (India’s mean age: 27 ; China’s mean age: 38; South-East Asia’s mean age: 28) • Strong GDP per capita growth signals increasing disposable incomes; and influences savings and investment behavior • Large interested buyer base MILLIONS 6,000 5,000 Africa 4,000 Asia 3,000 Latin America and the Caribbean 2,000 Northern America 1,000 Europe 1960 1970 1980 2040 2010 1980 0 1990 2000 2010 GROWING TRADE & MARKET ACCESS FREE TRADE AGREEMENTS EUROPE USA • 18 Regional and Bilateral FTAs • Great market connectivity through reduction of tariff and non-tariff barriers • Preferential access to service sectors • Stronger IP regulations KOREA CHINA JAPAN INDIA ASEAN PANAMA AUSTRALIA Other Key Free Trade Agreements (On Regional Basis) ASEAN-China (ACFTA) ASEAN-India (AIFTA) ASEAN-Australia-New Zealand FTA Australia (SAFTA) Trans-Pacific (TPFTA) NEW ZEALAND • Protect Organisers’ ideas and investments against noncommercial risks THE “NEW NORMAL” - SHOCKS TO SYSTEM ASIA PACIFIC (2010-11) REST OF THE WORLD (2010-11) Socio-political • Social Unrest (Thailand) • Rural-Urban Income Disparity (China) Socio-political • Middle-east Instability • Terrorist Attacks (US, Europe, India) Economic • Tainted Food Supply/Security • Pollution, Rising Prices • Over-heating & Urban Density Pressures Economic • Financial Markets Uncertainty (US, EU) • Rising Oil Prices • Cyber-attacks Nature/Climate Change • Tsunami, Nuclear Meltdown (Japan) • Earthquake (Christchurch, China, Indonesia) • Flood & Drought (Australia, China) Nature/Climate Change • Earthquakes, Volcanic Eruptions (Haiti, Chile, Iceland) • Heat Wave (Russia) CRISIS IMPACT ON COUNTRY’S ECOSYSTEM CITY CITY STATE CITY BUSINESS BUSINESS BUSINESS LIFE COMMUNITY COMMUNITY In Equilibrium Distortion exists BEFORE CRISIS AFTER CRISIS IMPACT ON CITY, BUSINESS AND COMMUNITY • Loss of Infrastructure and Production Assets • Drop in GDP Growth • Loss in Investors’ Confidence • Inflation • Rising Commodities Prices • Supply Chain in Disorder • Disruption to Business Operations and Processes • Loss of Investor Confidence • Loss in Revenue and International Market Share • Environmental Pollution • Disruption to Lifestyle, Families and Living • Negative Impact on Daily Supplies (Food, Water, etc) • Psychological Trauma OPPORTUNITY WITHIN A CRISIS CRISIS “Wei” DANGER “Ji” OPPORTUNITY In every crisis lies the seed of opportunity INDUSTRY – ADEPT AT RIDING THE “SHOCKWAVES” THREE CALLS OF ACTION for greater resilience and faster recovery City State Business CONFIDENCE RESTORATION To reduce fears & uncertainties CONNECTIVITY ESTABLISHMENT To communicate quickly and effectively with various stakeholders COMMUNITY ENGAGEMENT To play a part in environmental & social sustainability Living CLIENT S - SEEKING NEW ARRANGEMENTS In the “New Normal”… RISK AVERSION • • • More rigorous in crisis management / business continuity planning Shortened booking lead times for events Preference for flexible payment terms SUSTAINABILITY FOCUS FINANCIAL PRUDENCE • More events moving towards environmentally conscious Tougher price negotiations • Seek sustainability within event budget Increased emphasis on ROI of events • Desire positive social impact on economy, communities, and environment • Search for greater value in products and services • • CENTRES – OPPORTUNITIES TO BECOME FUTURE-READY 1) Standards & Partnerships for Operational &Service Excellence • Quality Management System • Safety & Operational Management for Indoor Operations • Industry Partnerships to Deliver Total Solutions 3) Virtual Platforms & IT Enablers • Wifi-enabled solutions • Online virtual meetings and conferences • Harnessing New/Social Media 2) Business Continuity Management (BCM) • Singapore Standard for building resilience and capability for an effective response to disruptions • British Standard for building a business management system to minimize risk of disruptions 4) Community Engagement Platforms • Incorporating CSR efforts into business events & centres • Create a positive social impact on environment ILLUSTRATION : SINGAPORE EXPO CONVENTION & EXHIBITION CENTRE SINGEX : CRITICAL INVESTMENTS Service Excellence Value Chain Operational Excellence Framework Our Value Chain Internal External • Global Standards Achievements Touch Points Partners Staff Organizers • Concierge • Security • F&B • Toilets • Car Parking • Media • Phone Enquiries • Thank You Note • Facilities • Business Centre • Signage Outcomes… • Delighted clients and visitors • Empowered staff • Effective service delivery and management Visitors • Technology Supporting Clients’ Needs & Making Centres Productive iPad • Cost Effectiveness Energy & Water Saving Initiatives Waste Recycling and Reduction SINGEX : ANCILLARY SERVICES PARTNERSHIPS Offering one-stop suite of solutions through partnerships… DESTINATION MANAGEMENT COMPANIES ATTRACTIONS HOTELS • Housing Bureau Management Services • Preferential Accommodation Rates • Conference & Meeting Management Services • Airport / Shuttle Transfer • Destination Management Services • Other Fill Benefits • Alternative Venue Packages which includes Venue Rental F&B Entertainment Performances Thank You The author has made his best effort to prepare this document. The content is based upon latest information whenever possible. The author makes no representation or warranties of any kind with regard to the completeness or accuracy of the contents herein and accept no liability of any kind including but not limited to performance, merchantability, fitness for any particular purpose, or any losses or damages of any kind caused or alleged to be caused directly or indirectly from this document. LATEST IMF AND S&P GDP GROWTH FORECAST (Standard & Poor’s)