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Mice Asia Net : July 2009
Q&A Brave new world inTERviEW by brad foster Q: Are you expecting any return to normal for the incentive market? A: People often ask me when do I think the business will return to “normal”. The fact is that The global financial crisis has resulted in the incentive travel market changing forever according to the CEO of Destination Asia, James Reed. With offices throughout Asia and the world he certainly has his finger on the pulse and is predicting a brave new world for the sector now and beyond 2009. corporate travel has changed and anybody who thinks it’s going to return to what it was in 2007 is deluding themselves. The reality is that it won’t go back to what some people might call “the good old days”. Budgets are being reduced as many if not most companies are reappraising their business models and related costs as a result of the current economic crisis. They have seen corporate travel as an immediate way to cut expenditure, and I don’t see it ever returning to what it was and how it was. From Australia business is presently down by about 10 to 15 per cent, 20 per cent from the United States and 25 per cent from the United Kingdom. We have seen a slight increase in business from South Africa. In 2010 we expect an increase on 2009 business of between 30 per cent and 35 per cent, based on the current strong forward MICE booking pattern. Q: Can you explain what you mean by saying that it’s changed? A: What I mean - particularly in the incentive market – is that incentive travel will be less 100 per cent pure reward and far more focused on aspects of CSR – corporate social responsibility. The briefs we have coming through now for 2010 are very different to what they were in the past. The days of helicopter transfers, massive fireworks displays and private museum viewings are gone. Clients now expect an element of CSR in their programming, not only for corporate goodwill but also real and tangible contributions to the local community in which their corporate event is being held, especially in Third World countries. These CSR project can be as simple as donating equipment to a school’s sports program or more complex CSR elements involving local temple assistance or rebuilding of a school. CSR is not so prevalent with Australian corporate events, yet, but more so from Europe and the U.S. Clients from those markets are very keen to know ‘how’ to develop CSR projects into their annual incentive program for example and how that can impact in the local community – Europeans and 18 miceAsia.net American MICE clients are very sincere in wanting to participate and contribute something that is good for the local community. We received a brief from a U.K. client recently and I think it illustrates exactly what I’m talking about. He said, and I quote here: “A donation to a local temple is more cost-effective than a fireworks show”. Not only is it cheaper but they realise that it offers far more long-term meaning than sitting on a beach, gazing at a fireworks display. And I would suggest that the actual participants themselves will get far more out of helping the local community, from a personal perspective, than watching that fireworks display. We assisted in the organisation and logistics management of Toyota USA’s top dealer achievers on a Burma Incentive. Toyota donated money to assist in the refurbishment of a local temple. As part of the actual incentive, the dealers went to lunch at the local village and participated in the official ceremony to open the renovated temple. The president informed the dealers that their sales achievements that year had contributed to the temple renovation, and it was a very moving experience for the delegates. You can’t quantify the goodwill that came out of that. Q: What else is changing? A: In the RFP that we are now receiving there are less participants than we have seen previously. There is more money being spent on soft adventures – bushwalking, elephant treks, white water rafting – participants want to do more; get out in the community more; participate more... far more active and participatory activities than the old cocktail and gala dinner event. There are also more educational components of the incentive. In Asia, for example, companies that have Asian affiliate offices or corporate subsidiaries are now programming staff interaction with local employees, be that meetings or tours of the factory floor, or joint training sessions. And of course incentives are not just rewards. Incentives almost always now include training, sales management sessions and new product launches. This aspect of off-shore corporate events - seminar and mini conferences - is a growing component of what was formerly purely “fun” and reward incentive programming. I call it the AIG perception effect after AIG [in the