business events industry · pdf filebusiness events industry report ... executive summary...

STATE OF THE BUSINESS EVENTS

INDUSTRY REPORT

Dr Marg DeeryTourism and Business Events InternationalSeptember 2013

Report Commissioned by The Business Events Council of Australia

*Photos provided courtesy of the Association of Australia Convention Bureaux Inc.

2012

Executive Summary

Executive Summary The Australian Business Events industry has a number of strategic goals for the year 2020 and this report documents the progress that the industry has made towards achieving those goals. Specifically, the industry aims to attract $16 billion per year from overnight Business Events delegates by 2020. In 2012, overnight delegate expenditure is estimated to be $11.6 billion. Overall, the Australian Business Events industry has recovered from the Global Financial Crisis (GFC) and expenditure and visitation have returned to pre-GFC figures, although domestic overnight visitors and expenditure decreased by 2% over 2011 figures. With regard to international association events, Australia improved on its 16th position in 2011 to 13th position in 2012.

The aim of this report is to provide an overview of the 2012 trends in business event activity and expenditure within worldwide, regional and local contexts.

Global and Regional Context The key issues during 2012 focused around the crisis with the Euro, the US fiscal cliff and tax cuts, and China’s spending on infrastructure and manufacturing. Global tourism receipts increased by 4% in 2012 over 2011 receipts., As Australia’s tourism receipts showed little growth in 2012, Australia suffered a slight loss in world market share (-0.2%). International visitors to Australia increased in most of its key markets such as China, New Zealand and the US while visitor numbers from Singapore decreased.

The Global Business Events Industry trends during 2012 in the global Business Events industry included:

The number of meetings booked globally increased by 5% in 2012 over 2011. The UK and US showed moderate growth in activity, while countries such as the Netherlands (up

146%), Singapore (up 200%), Italy (up 130%) and Hong Kong (up 129%) showed the greatest increases in the number of meetings booked.

Global trends in the meetings industry during 2012 focused on technology (overwhelming number of new products), demographics (difficulties in catering to the needs of different age cohorts) and risk management (short lead times, instability in company budgets).

Australia’s Business Events Industry key trends:

The average daily spend of business event visitors in 2012 was $289, which was similar to the adjusted figure for 2011.

Arrivals to Australia based on Overseas Arrivals and Departures (OAD) figures for the purposes of attending conferences and conventions during 2011 totalled 190,000 which was an 11% increase on the previous year.

During 2012 there was an increase in the focus of developing more holistic measures to assess the true value of Business Events, both nationally and internationally.

2012 saw a decrease in the deficit between inbound and outbound convention travel with a 10% increase in arrivals and a 3% decrease in departures.

New Zealand remained Australia’s major source market for conference visitors showing an increase of 2.5% from 2011. China, US and Japan all increased in relation to convention visitor numbers to Australia, while convention visitors from Singapore decreased.

Australia’s market share of international association meetings increased with a ranking of 13th in 2012 compared to 16th in 2011.

Incentive travel visitors in 2012 decreased by 23% over 2011, although trip nights increased by 6%.

Total business meeting (rather than convention, exhibition or incentive) visitors increased by 5% with expenditure by these visitors increasing by 6% which was the largest expenditure increase of all Business Events categories.

Exhibition visitor numbers and expenditure decreased in 2012 from 2011 figures by 13% and 28% respectively, while trip nights increased by 13%.

In 2012, the tourism investment pipeline was valued at $44.1billion showing a 22% increase or $7.9 billion over 2011 investment.

In 2012, the accommodation investment pipeline amounted to $5.6 billion providing an additional 9,760 rooms to supply. This is an increase of 1,589 rooms from 2011.

Executive Summary

Key Performance Indicators for December 2011/ to December 2012

Key Performance Indicator (KPI) 2011 2012 % Change*

Australia’s annual growth in participant numbers in the ICCA Report

64,627 76,375 18%

ABS Convention / Conference arrivals to Australia (based on main purpose of visit)

171,000 189,500 11%

Federal funding of Business Events (marketing only) $3.5 M p.a. through TA

$5.05 p.a through TA

44%

International business event visitors (IVS) 884K 919K 4%

International business event visitor trip nights (IVS) 15,419K 18,286K 19%

International business event visitor spend in Australia (IVS)

$2,428M $2,729M 12%

Domestic overnight business event visitors (NVS) 9,470K 9,326K -2%

Domestic overnight business event visitor nights (NVS) 26,907K 26,309K -2%

Domestic overnight business event visitor spend (NVS) $9,129K $8,917K -2%

Domestic day business event visitors (NVS) 9,023K 9,765K 8%

Domestic day business event visitor spend (NVS) $773M $892M 15%

Total business event visitors 19,376K 20,010K 3%

Total business event visitor nights 42,326K 44,595K 5%

Total business event visitor spend in Australia $12,554M $12,871M 3%

State government funding of convention bureaux1 22.9Ma 23.3Mb 2%

Local government funding of convention bureaux 2.5Ma 2.5Mb -0.8%

Total cash provided to convention bureau by the private sector

9.3Ma 10.7Mb 15%

Total number of members of convention bureau 1,912a 1,890b -1%

Total number of convention bureau bids won 673a 784b 16%

Total estimated delegate expenditure from bids won 590Ma 620Mb 5%

Total number of convention bureau bids lost 412a 520b -26%

Australia’s rank in the list of Overall Country Brand 5 6 N/A

Australia’s rank in the Anholt-GFK Nation Brand 8 9 N/A

Accredited meeting managers (MEA) 66 87 32%

Note a: Refer to financial year 2010-11 Note b: Refer to financial year 2011-12 * percentage changes have been rounded

1Information relating to convention bureau from: AACB Performance Report 2011-2012

TABLE OF CONTENTS

EXECUTIVE SUMMARY .................................................................................................. 1

1.0 INTRODUCTION...................................................................................................... 1

2.0 GLOBAL OVERVIEW ................................................................................................ 1

2.1. Global Economy and Tourism .................................................................................................. 12.2. Global Meetings Industry .......................................................................................................... 32.2.1 Associations ........................................................................................................................... 42.2.2 Exhibitions .............................................................................................................................. 42.2.3 Incentives ............................................................................................................................... 62.2.4 Corporate Meetings ................................................................................................................ 6

3.0 AUSTRALIAN OVERVIEW ........................................................................................ 7

3.1. Economy ................................................................................................................................... 73.2. Business Events ....................................................................................................................... 73.2.1 Total Value of Business Events.............................................................................................. 73.3 Tourism Measures of Business Events Performance ............................................................... 8

5.0 SECTORAL ANALYSIS ........................................................................................... 12

5.1. Conference/ Convention Arrivals............................................................................................ 125.1.1 Associations ......................................................................................................................... 135.1.2. Incentives ............................................................................................................................ 165.1.3. Business Meetings .............................................................................................................. 165.1.4. Exhibitions ........................................................................................................................... 17

6.0 OTHER FACTORS ................................................................................................... 18

6.1 Investment ............................................................................................................................... 186.1.1 Accommodation .................................................................................................................... 196.1.2 Aviation ................................................................................................................................. 20

7.0 CONCLUSION ......................................................................................................... 22

REFERENCES ............................................................................................................... 23

TABLE OF TABLES

Table 1: Results from Tourism Research Australia’s International Visitor Survey and National Visitor Survey: Business Events – visitors, nights and spend ......................................................... 9

Table 2: Key Performance Indicators for 2011/2012 ..................................................................... 11

Table 3: Top International Meeting Countries in 2012 .................................................................. 13

Table 4: Top International Meeting Cities 2012 ............................................................................ 14

Table 6: Conference/convention/seminar visitors, nights and spend. YE Dec 2008- YE 2012 .... 15

Table 7: Incentive visitors, nights and spend. ............................................................................... 16

Table 8: Business Meetings visitors, nights and spend. ............................................................... 17

Table 10: Tourism Investment Pipeline 2012 ................................................................................ 19

TABLE OF FIGURES

Figure 7: The Value of Business Events ......................................................................................... 7

Figure 8: ABS Convention Inbound and Outbound Visitors (2002-2012) ..................................... 10

Figure 9: Number of convention or conference visitors to Australia by country of residence. Year ended 31 December 2012 compared to year ended December 2011 .......................................... 12

Figure 10: Conference/Convention Arrivals to Australia Monthly Comparisons 2008-2012 ......... 13

Figure 11: ICCA: Movements in Worldwide Rankings, Australia 2000-2012 (no. of meetings) .... 14

Table 11: Key indicators for Australia’s larger accommodation establishments ........................... 19

Figure 12: Real Yields per Available Rooms ................................................................................. 20

Figure 13: Australia’s international aviation sector, inbound seat capacity and passenger load factors ............................................................................................................................................ 21

1 | P a g e

State of the Australian Business Events Industry Report Calendar Year 2012

1.0 Introduction

The purpose of this report is to provide an overview of how Australia’s Business Events sector performed in 2012 and the factors that affected this performance. This is the third State of the Australian Business Events Industry Report; the first report was produced in 2010 and examined the performance of the sector in 2009. Business Events were estimated to have contributed $24 billion in 2012 and this is forecast to rise to $31 billion by 20202. According to the industry’s stated goals (BEA, 2011), the sector aims to double the annual overnight expenditure by business event visitor delegates to $16.0 billion by 2020. Whilst overnight Business Events delegate expenditure only increased by about 1% in 2012 to $11.6 billion, it has increased by 32% since 2009. Total business event expenditure (including daytrips) increased by 2.5% in 2012 to $12.9 billion, which is 34% up on the 2009 figure. The Business Events sector appears to be on track to achieve its 2012 target3.

2.0 Global Overview

2.1. Global Economy and Tourism The areas of global economic focus in 2012 were the European financial crisis and the US fiscal cliff and the consequences to the rest of the world from these events4. Specifically, Advito’s December 2012 update5 argues that:

‘The health of the global economy depends largely on U.S. Congress compromises over tax cuts, the euro zone avoiding breakup of the single currency, and China’s recent progress on infrastructure spending and manufacturing improvements’ (p.1)

With regard to the global economy and tourism, UNWTO data reports that receipts from international tourism increased by 4% in 2012 over 2011 receipts to reach US$1,075 billion.6 Australia’s receipts remained the same at US$31.5 billion in 2011 and 2012 and therefore showed a slight loss in world market share (-0.2%). The Americas experienced the largest increase in international tourism receipts (+7%) with Asia and the Pacific next (+6%), followed by Africa (+5%) and Europe (2%). Although receipts were down in the Middle East (-2%), this was mild compared to the decline experienced in 2011. According to the UNWTO, international tourism in 2012 accounted for 30% of the world’s exports and 6% of all exports of goods and services. As an export category, tourism is fifth after fuels, chemicals, food and automotive products. It is ranked first in many developing countries. Finally, CIBTM 20127 reported that although the Asian economies continued to show much higher growth figures than elsewhere in the world - 8% in China and 6% in India, there were still economic challenges faced by these countries.

2Tourism & Transport Forum (TTF). (2013) The Value of Business events: Measuring the Value of the Australian Business Events Sector, 2003-2020.3 Tourism Research Australia (2013), Business Events – YE Dec 2009 to YE Dec 2012 4Grass Roots Meetings Industry Report 2013. 2012 Market Analysis & 2013 Forecast.5Advito 2013 Industry Forecast and December 2012 Update 6 UNWTO Press Release No. 13033, 15 May 2013 http://media.unwto.org/en/press-release/2013-05-15/international-tourism-receipts-grew-4-2012 7CIBTM 2012, IBTM Global Meetings Industry Research

2 | P a g e

In terms of top destinations, the rankings for inbound tourism remained almost unchanged from 2011 as shown in Figure 1. Figure 1: World and Regions: Inbound Tourism Top Ten Destinations

Source: UNWTO http://dtxtq4w60xqpw.cloudfront.net/sites/all/files/pdf/unwto_receipts_1995_2012_graph.pdf

Australia’s tourism industry performed better over 2011-2012 compared to 2010-2011 with an increase of 1.2 % in international visitor arrivals reaching nearly 6 million. This modest increase was in line with a period of slow growth since 2000, during which time, a number of global economic events affected international visitor arrivals as shown in Figure 2. Figure 2: Long-term Growth in Australia’s International Visitor Arrivals

Source: Tourism Research Australia, State of the Industry 2012, p. 23

Much of the international visitor growth came from a 16.7% increase in Chinese visitors with an accompanying increase in expenditure, which was up 9.1% to $3.8 billion. New Zealand and the United States visitors also increased expenditure (up 3.8% and 7.5% respectively), but some traditional markets such as the United Kingdom declined in expenditure by 6.6%.8

8 Tourism Research Australia, State of the Industry 2012, Canberra

3 | P a g e

2.2. Global Meetings Industry A range of reports on the global meetings industry provides insights into the trends. One of these, which reports on the global meetings industry for 2012 and beyond is the IMEX 2012, The Power of 109 report. It examines the key trends over the last ten years as well as analysing the future impacts on, and progress of, the global meetings industry. The report argues there were three key factors that impacted on the global meeting industry over the last ten years, namely, (1) the economy (especially the Global Financial Crisis), (2) the internet (especially with regard to buyer-supplier relationships and delegate engagement) and (3) delegate expectations, particularly with regard to the use of their time, the quality of the event, the content and return on investment.

The 2013 Grass Roots Report10 found that the decline in meetings and events budgets and delegate numbers in 2011 and previous years is reversing. The number of meetings booked globally increased by 5% in 2012 over 2011. The UK and US showed moderate growth in activity, while countries such as the Netherlands (up 146%), Singapore (up 200%), Italy (up 130%) and Hong Kong (up 129%) showed the greatest increases in the number of meetings booked (Figure 3).

Figure 3: Average Number of Events per Annum 2012 v 2011

Source: Grass Roots Meetings Industry Report 2013, p. 6

In 2012, a number of trends emerged. MPI’s Business Barometer 201211, for example, found global trends in the meetings industry during 2012 to be focused on technology, demographics and risk management. The key issue with technology is the overwhelming number of new products and the difficulty that meetings professionals have in choosing the most appropriate one. This is due mainly to a lack of time and knowledge of the product. New challenges have emerged with regard to the demographic profiles of delegates; the MPI report found that:

‘….networking within and among generations is increasingly difficult to manage as audience demographics become more diverse….They [meeting professionals] must provide content live, streaming and archived online, and schedules in print and on mobile apps and websites. Food and beverage requirements are changing as younger, more health conscious attendees expect choices that are significantly different than the attendees of the past.’ (pp.2-3)

The third issue that continued to be important during 2012, according to the MPI report is that of risk management and this is specifically related to global economic instability and the flow-on

9 Talwar, R., Hancock, T., du Plessis, A., Lazarova, I., Saer, D., Carver, L. and Fast Future Research, (2012) The IMEX Power of 10 Study – What does the Next Decade Hold for the Global Meetings Industry? 10 Newton, A., Grass Roots Meetings Industry Report 2013. 2012 Market Analysis & 2013 Forecast. Grass Roots HBI London 11 2012 MPI Business Barometer Annual Report

4 | P a g e

effects. Short lead times are the most obvious result of this instability, with company budget approvals taking longer and spending policies being delayed. Such short lead times have also resulted in increased room, food and beverage rates as well as a lack of room availability.

Although developing at a greater rate than elsewhere, the Asian meetings industry, through the CIBTM 201212 Report found that the industry needed to do more with less.

‘Buyers in China and Asia appear now to be just as affected by this trend with 62% saying the volume of events will increase over the next twelve months but only 49% saying budgets will increase’ (p.2)

The report stated that up to 86% are now using social media to communicate before, during and after meetings with almost 30% using apps for providing information to delegates.

2.2.1 Associations In general, the Associations sector appeared to stabilise in 2012 with the Fourth Annual INCON Survey13 reporting that 44% of the survey respondents stated that their business levels had remained on par with 2011 and another 15% reported a decrease. Respondents reported no change in event attendance from 2011 to 2012 although 33% forecast an increase in attendee numbers for 2013. According to ICCA (2012), the leading countries for hosting international association meetings were USA (833), Germany (649), Spain (550) and UK (477), mirroring the rankings of 2010 and 2011. All of these countries showed an increase in the number of meetings held. Similarly, the cities identified by ICCA as hosting the most international association meetings in 2011 were Vienna (195), Paris (181), Berlin (172) and Madrid (164). Barcelona dropped from third place to fifth place, while Madrid moved up from sixth position to fourth. London continued to improve its position moving from fourteenth place in 2010, to seventh place in 2011 to sixth place in 2012 demonstrating the effect of the Olympic Games on destination profiles. Trends in the Association sector during 2012 tended to focus on the impact that increases in delegate accommodation costs were having on budgets. A second important trend was the need to capture content and then to distribute this in a way that could also raise revenue. Understanding the latest trends in technology has become increasingly important. The final trend to emerge during 2012, according to the respondents to the INCON Survey, was the increase in strategic advice given to association clients on the analysis of challenges and the potential opportunities that association clients could adopt.

2.2.2 Exhibitions UFI’s 10th Global Exhibition Barometer14 found that the majority of exhibition companies (60%) in Europe, the Middle East and Africa had increased their turnover since 2011. The Asia Pacific region maintained a high level of growth in 2012 with 80% of companies stating an increase in turnover during 2010 and 2011. The Americas had a lower level of growth in 2012 (Figure 4).

12CIBTM 2012, IBTM Global Meetings Industry Research13 Fourth Annual INCON Survey of the Global Association Conference Market, www.incon-pco.com 14 UFI 10th Global Exhibition Barometer, December 2012

5 | P a g e

Figure 4: Percentage of Companies Declaring an Increase in Turnover Compared to the Previous Year

Source: UFI (2012), Global Exhibition Barometer, p.5

The survey by UFI (2012) also examined the perceptions of the economic crisis with the results and Figure 5 showing that:

‘The number of companies who believe that the crisis will end in 2013 has dropped from 44% six months ago to 33% today. 36% now believe that the impact of the economic crisis will only end in 2014, 23% that this will occur in 2015 and 8% that it will be later than that.’ (p. 10)

Figure 5: Percentage of companies stating that the impact of the “economic crisis” on their exhibition business is now over

Source: UFI (2012), Global Exhibition Barometer, p.11

As a consequence of these perceptions, the key issues confronting the global exhibition sector were found to be the state of the national/regional economy (20%), global economic uncertainty (17%), local/national competition from the exhibition industry (14%) and internal management challenges (14%).

6 | P a g e

2.2.3 Incentives The results from Site’s Annual Index 201215 provide useful data on trends in the incentives sector, especially in comparison to trends in 2011. Respondents were more positive in 2012 than in the previous year with regard to the continued use of motivational travel experiences by companies, at least in the short term. Similarly, more respondents stated in 2012 than in 2011 that the use of all-inclusive hotel would increase in the short term (5% over 2011) and that destinations would be chosen on the basis of the value of their currency against that of the destination being considered (66%). A number of categories appeared to have stabilised from 2011 to 2012 including the use of cruise products, the requirement to measure Return on Investment (ROI), top management in the decision making process for motivational events, the use of green initiatives in the industry and the inclusion of business meetings and CSR events in motivational events. As in 2011, Baby Boomers appear to be the group most motivated by extrinsic rewards while traditionalists are least likely (Figure 6). Figure 6: Ranking of the generations based on how motivated by external rewards such as travel and merchandise.

Source: SITE Index Annual Study Executive Summary, 2012, p. 1

Although more US focused, the Incentive Research Foundation’s (IRF) data on the incentives industry also provides insights into the sector’s trends. According to IRF’s September 2012 Pulse Survey 16 , respondents were, overall, more optimistic during 2012 (average of all positive responses 51%) compared to 2011 (average of all positive responses 36%) regarding the perceived impact of the economy on ability to plan and implement incentive travel programs. It should be noted, however, that respondents in September 2012 indicated they are less optimistic and considered the economy as having less of a positive impact on their ability to plan and implement incentive travel programs when compared with the previous result in March 2012.

2.2.4 Corporate Meetings The greatest impact on the corporate meetings sector during 2012 was the global economic crisis. The EIBTM 2012 Trends Watch report states that new investments, particularly in Europe, have been placed on hold as has investment in training and marketing events.

15 Site Index Annual Study Executive Summary, December 2012, Site International Foundation 16IRFPulse Survey September 2012, Incentive Research Foundation

7 | P a g e

3.0 Australian Overview

3.1. Economy The impact of the Global Financial Crisis (GFC) is still being felt around the world four years on from the key events although Australia has fared better than many countries. Australia’s economy has been buoyed by the mining boom, although the high Australian dollar has offset some of the positive effects of this. In 2009, the economy grew by 1.4% - the best performance in the OECD - by 2.5% in 2010, 2.1% in 2011, and 3.3% in 2012. Unemployment fell over the years from the peak at 5.7% in late 2009 and to 5.2% in 2012.

3.2. Business Events According to the Tourism & Transport Forum (TTF)17, the value of Business Events to the economy in 2012 was $24 billion. The previous estimate of the value of Business Events to the economy was released in 2005 as part of the National Business Events Study when it was estimated to be worth $17.9 billion. This figure was obtained by measuring the visitor delegate expenditure, the local day trip expenditure, all non-delegate expenditure such as venue hire and the indirect impacts of Business Events. Based on TRA’s data, the TTF report stated there were 20 million Business Events visitors who represented 8% of all visitors, 8% of day visitors and 15% of visitor expenditure in 2012. These figures show that Business Events visitors have grown 3.3% each year since 2008, visitor days increased by 2.9% each year and spending increased by 3.2% per annum. Figure 7 provides a diagrammatic representation of understanding the value of Business Events which is discussed further in 3.2.1.

Figure 7: The Value of Business Events

3.2.1 Total Value of Business Events A recent focus for measuring the values of Business Events, both in Australia and overseas, has been a more holistic approach that examines Business Events beyond the tourism context. Many of the previous studies have focused on the economic value of Business Events, but recent

17Tourism & Transport Forum (TTF). (2013) The Value of Business events: Measuring the Value of the Australian Business Events Sector, 2003-2020.

Visitor

Delegate Expenditure

All expenditure in Australia

(including day trips> 50km

Other Delegate Expenditure

Day Trips < 50 km

Other Non-Delegate Expenditure

e.g. Venue hire, event organisers

Indirect Effects of Business Events

e.g. innovation, knowledge transfer, business deal

2012 Total BE Visitor Expenditure $12.9b (3%) on 2011)

2012 All Delegate Expenditure (BE visitor spend $289 per day)

Total Business Events Expenditure

Total Business Events Spend

8 | P a g e

studies such as those undertaken by Melbourne Convention Bureau18 and Business Events Sydney 19 have attempted to use broader measures such as the knowledge creation and innovation that may emerge from Business Events. The IMEX Power of 10 Study20 in 2012 includes the issue of industry development ‘beyond tourism’ as one of six sub-reports that will be released. Specifically, the report states the Australian reports have pioneered these types of studies, which attempt to measure:

‘benefits [that] include attracting inward investment, generating knowledge economy jobs, securing research funding for academic institutions, building up the local research base, creating opportunities for local businesses, developing new knowledge networks and raising the city profile.’ (p. 7)

More research in this area of estimating the true value of the industry needs to be undertaken, particularly in Australia where the initiative for this research began.

3.3 Tourism Measures of Business Events Performance Although the main source of data, at the macro level, for measuring Business Events performance is through Tourism Research Australia’s International Visitors Survey (IVS) and the National Visitors Survey (NVS), the Association of Australian Convention Bureaux (AACB) collects data at the bureau level to measure the bureaux’ sales and bid performance. These data are invaluable for understanding the trends within the Australian Business Events sector and some results are presented in this report. The AACB is also doing work to track bid success that will help identify future years where demand for events is soft and action needs to be taken. This work will also help identify the key reasons that bids are lost, which is information that can be used to enhance subsequent bids. The data collected through the IVS and the NVS on the number of Business Events visitors, visitor nights and expenditure are provided in Table 1. The data shows the details of Business Events activity between 2009 and 2012 and are discussed in greater detail in Section 5.0. It should be noted that the data contained in Table 1 do not include the many local delegates who did not fit the strict definitions for being a day-tripper.

18Melbourne Convention and Visitors Bureau (MCVB) (2011) The Holistic Value of Events 19 Business Events Sydney' (BESydney) Beyond Tourism Benefits: Measuring the social legacy of business events

20 The IMEX Power of 10 Study- What Does the Next Decade Hold for the Global Meetings Industry? Executive Summary. Critical Insights and Key Challenges, May 2012

9 | P a g e

Table 1: Results from Tourism Research Australia’s International Visitor Survey and National Visitor Survey: Business Events – visitors, nights and spend

10 | P a g e

As can be seen in Figure 8 below, 2012 saw that the convention visitor deficit continued with more Australians travelling overseas to attend conventions than international delegates coming to Australia for conventions. As evidenced by Figure 8, however, the gap between inbound and outbound visitors decreased in 2012 with the difference between arrivals and departures in 2011 being 53,800 while in 2012, the difference was 42,600. This difference was due to a 10% increase in arrivals and smaller increase of departures of 3%21. These data are provided from the Australian Bureau of Statistics (ABS) from the Overseas Arrivals and Departures surveys (OAD) and, although these data do not pick up all convention arrivals, they provide trend data based on inbound and outbound visitors who indicate ‘conventions’ as the stated reason for travel. Figure 8: ABS Convention Inbound and Outbound Visitors (2002-2012)

Source: BECA, 2013 (based on ABS OAD statistics)

By December 2012, total business event visitor expenditure rose 3% ($0.3 billion) from $12.6 billion in December 2011 to $12.9 billion. Domestic day Business Events expenditure experienced the greatest increase for the second year running of 24% increasing from $1 billion in 2011 to $1.2 billion in 2012. International Business Events expenditure increased by 12% from 2011 to 2012, while domestic overnight Business Events expenditure decreased by 2% from 2011 to 2012. According to the TTF report (2013)22, the average trip length during 2012 was 2.7 days, the average expenditure per trip was $643 while the average expenditure per day was $237. The number of nights away from home to attend Business Events increased from 42.3 million in 2011 to 44.6 million in 2012 representing a 5% increase. Domestic overnight Business Events trips were down by 2% in 2012 compared to 2011. The number of international association meetings held in Australia increased in 2012 over 2011, resulting in Australia’s international ranking for association events improving from 16th in 2011 to 13th in 2012. Australia also moved up one position within the Asia Pacific region rankings from 4th (2011) to 3rd in 2012.

4.0 Key Performance Indicators

In order to assess and monitor over time the performance of Australia’s Business Events sector, a range of Key Performance Indicators (KPIs) has been identified and listed in Table 2 below. Where possible, values for 2011 have also been listed for comparison with the 2012 figures.

21 BECA, Convention Arrival Figures – for the Australian Business Events Industry, issued January 2013. 22Tourism & Transport Forum (TTF). (2013) The Value of Business events: Measuring the Value of the Australian Business Events Sector, 2003-2020.

11 | P a g e

Table 2: Key Performance Indicators for 2011/2012 Key Performance Indicator (KPI) 2011 2012 % Change*

Australia’s annual growth in participant numbers in the ICCA Report

64,627 76,375 18%

ABS Convention / Conference arrivals to Australia 171,000 189,500 11%

Federal funding of Business Events (marketing only) $3.5 M p.a. through TA

$5.05 p.a through TA

44%

International business event visitors (IVS) 884K 919K 4%

International business event visitor trip nights (IVS) 15,419K 18,286K 19%

International business event visitor spend in Australia (IVS)

$2428M $2729M 12%

Domestic overnight business event visitors (NVS) 9,470K 9,326K -2%

Domestic overnight business event visitor nights (NVS) 26,907K 26,309K -2%

Domestic overnight business event visitor spend (NVS) $9,129K $8,917K -2%

Domestic day business event visitors (NVS) 9,023K 9,765K 8%

Domestic day business event visitor spend (NVS) $773M $892M 15%

Total business event visitors 19,376K 20,010K 3%

Total business event visitor nights 42,326K 44,595K 5%

Total business event visitor spend in Australia $12,554M $12,871M 3%

State government funding of convention bureaux23 22.9M1 23.3M2 2%

Local government funding of convention bureaux 2.5M1 2.5M2 -0.8%

Total cash provided to convention bureau by the private sector

9.3M1 10.7M2 15%

Total number of members of convention bureau 1,9121 1,8902 -1%

Total number of convention bureau bids won 6731 7842 16%

Total estimated delegate expenditure from bids won 590M1 620M2 5%

Total number of convention bureau bids lost 4121 5202 -26%

Australia’s rank in the list of Overall Country Brand 5 6 N/A

Australia’s rank in the Anholt-GFK Nation Brand 8 9 N/A

Accredited meeting managers (MEA) 66 87 32%

Note 1: Refer to financial year 2010-11 Note 2: Refer to financial year 2011-12 * percentage changes have been rounded

23Information relating to convention bureau from: AACB Performance Report 2011-2012

12 | P a g e

5.0 Sectoral Analysis

5.1. Conference/ Convention Arrivals According to ABS OAD data, arrivals to Australia for the purposes of attending conferences and conventions during 2012 totalled 190,000 showing an 11% increase on 2011. It is important to note that the purpose of visit in the ABS data is based on the categories that visitors mark on their arrival cards. It has been found in earlier studies that quite a number of visitors whose trip is prompted by a business event also have a holiday whilst in Australia and mark the ‘holiday’ category for purpose of visit or, indeed, mark the ‘business’ category. This results in a substantial under-estimation of the number of business event visitors but the figures are useful for inter-period comparisons. Using TRA data, which collect responses about attendance at Business Events (conferences, exhibitions, incentives and business meetings) during the respondents’ stay in Australia and are shown in Table 1, international conference and convention visitor numbers increased by 18% from 2011 to 2012. International conference and convention visitors’ trip nights and spend in Australia also increased from 2011 to 2012 by 38% and 30% respectively. As can be seen in Figure 9, New Zealand (NZ) remains Australia’s major source market for conference visitors, providing approximately double the number of visitors that the next market (USA) provides. There was a 2.5% increase in the convention arrivals from NZ during 2012 compared to 2011 with increases also in other countries such as USA (26%), China (23%), Malaysia (20%), United Kingdom (17%), and Korea. The greatest decrease in numbers was the India market (33%). Figure 9: Number of convention or conference visitors to Australia by country of residence. Year ended 31 December 2012 compared to year ended December 2011

Source: Australian Bureau of Statistics, Overseas Arrivals and Departures

As can be seen in Figure 10 that compares the monthly convention/conference arrivals to Australia over the last five years, convention arrival figures for December in 2012 were substantially higher than in previous years with a total of 10,500 arrivals compared to 7,200 in 2011. A number of other months in 2012 such as May, August and September showed a strengthening of the convention market in Australia.

2011

2012

13 | P a g e

Figure 10: Conference/Convention Arrivals to Australia Monthly Comparisons 2008-2012

Source: BECA, 2013 (compiled from ABS OAD figures)

5.1.1 Associations The most recent data on Australia’s position with regard to the association sector comes from the ICCA Country and City Rankings Report 2012. These data are based on the number of association conferences held and, as illustrated in Table 3, Australia increased its ranking from 16th in 2011 to 13th in 2012.

Table 3: Top International Meeting Countries in 2012 Ranking ICCA – Country

1 USA

2 Germany

3 Spain

4 United Kingdom

5 France

6 Italy

7 Brazil

8 Japan

9 China-P.R.

10 Austria

Australia – 13 (2011 Australia ranked 16)

Sources: ICCA Report 2012

ICCA’s 2012 report also provides the rankings of the cities according to the number of meetings held. A number of Australian cities improved their rankings. Sydney, for example, moved from 34th in 2011 to 24th in 2012, with Brisbane from 87th to 56th and Perth from 132nd to 100th. No Australian city was ranked within the top 10 in 2012 in contrast to 2010 when Sydney was ranked in 10th position.

14 | P a g e

Table 4: Top International Meeting Cities 2012 Ranking ICCA – City 2012 ICCA – City 2011

1 Vienna Vienna

2 Paris Paris

3 Berlin Barcelona

4 Madrid Berlin

5 Barcelona Singapore

6 London Madrid

7 Singapore London

8 Copenhagen Amsterdam

9 Istanbul Istanbul

10 Amsterdam Beijing

Sydney – 24 Melbourne - 31

Melbourne – 39 Sydney 34

Brisbane – 56 Brisbane - 87

Perth – 100 Perth - 132

Cairns – 134 Cairns - 186

Adelaide – 142 Gold Coast - 312

Canberra 263 Canberra - 345

Sources: ICCA Report 2012

As illustrated in Figure 8, Australia showed a steady decline in its international ranking in the ICCA report between 2000 and 2009, dropping from 4th to 16th place. In 2010, however, Australia improved its position to 11th built largely on the improved performance of Sydney, which hosted 41 more international association meetings in 2010 than it did in 2009. Australia’s position of 16th in 2011 has returned to its 2009 ranking.

Figure 11: ICCA: Movements in Worldwide Rankings, Australia 2000-2012 (no. of meetings)

Source: Based on historical data - ICCA statistics

In the Asia Pacific region, ICCA data show that Australia fell from 1st place in 2006 to 4th place in 2009, rebounding to 3rd place in 2010. Australia dropped back to 4th position again in 2012 (Table 5).

45

6888

913

1416

1116

13

0 2 4 6 8 10 12 14 16 18

1.002.003.004.005.006.007.008.009.0010.0011.0012.0013.00

Ranking

2012201120102009200820072006200520042003200220012000

Year

15 | P a g e

Table 5: Australia’s Competitive ICCA Ranking in the Asia Pacific (Based on the number of meetings)

Ranking 2005 2006 2007 2008 2009 2010 2011 2012

1 Australia Australia Japan Japan Japan Japan China P.R

Japan

2 Japan Japan China PR

China PR

China PR

China PR Japan China PR

3 China PR China PR Australia Australia Korea Australia Korea Australia

4 Singapore Singapore Korea Korea Australia Korea Australia Korea

ICCA Report 2012 Table 6, which is extracted from TRA data (2012), provides details of conference activity in Australia with visitor type and numbers, trip nights and spend for the period 2008 to 2012. It can be seen that international and domestic overnight visitors for conferences and conventions increased during 2012 over 2011 in relation to international and domestic day numbers, visitor nights and expenditure in Australia. However, domestic overnight visitor numbers (-6%) to conventions as well as expenditure (-8%) and trip nights (-9%) decreased from 2012 to 2011

Table 6: Conference/convention/seminar visitors, nights and spend. YE Dec 2008- YE 2012 Visitor type 2008 2009 2010 2011 2012 % Change

International

Visitors (‘000) 307 230 293 307 363 18%

Trip Nights (‘000) 4995 4975 4540 5456 7535 38%

Spend in Australia ($ m) 732 562 747 881 1141 30%

Domestic overnight

Visitors (‘000) 2451 2041 2267 2772 2604 -6%

Trip Nights (‘000) 7697 6581 6994 8935 8135 -9%

Spend in Australia ($ m) 2160 1951 2208 2994 2767 -8%

Domestic day

Visitors (‘000) 1956 1835 1829 1463 1934 32%


Total

Visitors (‘000) 4714 4109 4389 4542 4901 8%

Trip Nights (‘000) 12692

10771

11970 14391 15670 9%


Source: TRA Business Events Visitors (2013),

16 | P a g e

5.1.2. Incentives During 2012, the incentives sector experienced great variation in visitor numbers, nights and spend. There were decreases in international visitors (20%), trip nights (17%) and expenditure (8%) in 2012 compared to 2011. Although there was a 6% increase in total trip nights for incentive travel for 2012 over 2011 figures, total visitors decreased by 23% and total expenditure declined by 2% .

Table 7: Incentive visitors, nights and spend. Visitor type 2008 2009 2010 2011 2012 % Change

International

Visitors (‘000) 49 33 39 50 40 -20%

Trip Nights (‘000) 334 261 325 303 253 -17%

Spend in Australia ($ mi) 57 51 56 62 57 - 8%

Domestic overnight

Visitors (‘000) 191 178 183 118 90 -24%

Trip Nights (‘000) 616 488 483 291 379 30%


Total

Visitors (‘000) 240 211 223 169 130 -23%

Trip Nights (‘000) 950 749 808 594 632 6%


Source: TRA Business Events Visitors (2013

Note: International incentive visitors are defined as those who visited as part of a job related reward or bonus provided by their employer for performance or sales and travelled with business associates and/or on a group (excluding sporting tours, guided holiday tours and school excursions).

5.1.3. Business Meetings While the 2012 data for total business meetings visitors showed an increase of 5%, this increase was significantly lower than the increase for 2011 over 2010 figures. The largest increase in business meetings for 2012 over 2011 data was in domestic day expenditure (15%)

17 | P a g e

Table 8: Business Meetings visitors, nights and spend. Visitor type 2008 2009 2010 2011 2012 % Change

International

Visitors (‘000) 548 530 540 597 595 0%

Trip Nights (‘000) 8322 8991 8991 10758 11645 8%


Domestic overnight

Visitors (‘000) 6945 5925 6069 6994 7140 2%

Trip Nights (‘000) 18624 15396 17044 18468 18553 0%


Domestic day

Visitors (‘000) 4775 4855 5557 6920 7448 8%


Total

Visitors 12268 11310 12165 14511 15184 5%

Trip Nights 26946 24387 26036 29226 30198 3%

Spend in Australia 6844 6855 7298 8895 9472 6%

Source: TRA Business Events Visitors (2013)

BECA defines a business event as a meeting “being held in a commercial venue and involving more than 15 persons with a common purpose”. The International Visitor Survey (IVS) and the National Visitor Survey (NVS) collect data on visitors for business meetings but it needs to be recognised that some of those who are identified in the IVS and NVS as attending business meetings would not meet BECA’s criteria for attending a meeting. The main reason for this difference would be that the venue used to stage the meeting is not a commercial venue.

5.1.4. Exhibitions

According to the peak exhibition body, Exhibition & Event Association of Australasia’s, (EEAA) 2012 Annual Report,24 EEAA member venues hosted 604 events, including 157 new events in 2012. At these events, 24,109 exhibitors participated with a total of 1.346 million visitors. This provides an average of 9,217 per event. In terms of trends in the exhibition sector, suppliers and organisers stated that there were a number of challenges for the sector including decreasing exhibitor budgets, building and construction at venues, domestic economy, cost of doing business and cost of hiring staff as the most frequently cited industry impacts. Of the organisers surveyed, 53% stated they would present new events in 2013 with suppliers reporting positive business growth. 47% of the suppliers stated turnover had increased from the previous financial year and only 20% reporting a decrease. Data from the 2012 IVS and NVS as presented in Table 9 indicates that for exhibitions, there were increased international visitor numbers (up by 25 %), trip nights (up by 45 %) and

24EEAA Factsheet Market Monitor #3 Insights 2012 Annual Report and July – December 2012 Six Months 30 April 2013

18 | P a g e

expenditure increasing by 49 % over 2011 figures. In relation to domestic day visitors to exhibitions in 2012, numbers were lower than in 2011, but total spend was higher (30%), while domestic overnight spend decreased by 52%.

Table 9: Exhibitions visitors, nights and spend. Visitor type 2008 2009 2010 2011 2012 % Change

International

Visitors (‘000) 59 39 50 55 69 25%

Trip Nights (‘000) 1627 1504 1512 2257 3268 45%


Domestic overnight

Visitors (‘000) 473 405 483 700 492 -30%

Trip Nights (‘000) 1748 1346 1884 2874 2522 -12%


Domestic day

Visitors (‘000) 908 1030 1096 933 909 -3%


Total

Visitors (‘000) 1440 1474 1629 1688 1471 -13%

Trip Nights (‘000) 3375 2850 3395 5131 5790 13%


Source: TRA, Business Events Visitors: 2013

6.0 Other Factors

6.1 Investment

TRA’s Tourism Investment Monitor, 201325 provides details of investment in a range of business

event related areas. The key areas of the tourism supply chain of accommodation, transport

(aviation) and arts and recreation services all serve to underpin the Business Events sector. In

2012, the tourism investment pipeline was valued at $44.1billion showing a 22% increase or $7.9

billion over 2011 investment. The key areas to assist the Tourism 2020 strategy in achieving

growth in overnight expenditure are accommodation and aviation, both domestic and

international.

25Tourism Research Australia (TRA), Tourism Investment Monitor, 2013

19 | P a g e

Table 10: Tourism Investment Pipeline 2012 Sold Under

consideration / possible

Committed / under construction / recently completed

Total

($ million) Accommodation (hotels and resorts)

1,440 2,561 3,008 5,569

Transport (aviation)

NA 5,219 23,721 28,940

Arts and recreation services

NA

4,021

5,599

9,620 Source: TRA, Tourism Investment Monitor, 2013, p. iv

6.1.1 Accommodation TRA’s Tourism Investment Monitor (2013) estimates that in 2012, the accommodation investment pipeline, which includes refurbishment and approved construction of new stock, amounted to $5.6 billion. This provided an additional 9,760 rooms to supply. This is an increase of 1,589 rooms from the previous edition of the Tourism Investment Monitor in 2012. In 2012 there were 24 mixed-use projects considered in the accommodation investment pipeline, accounting for upwards of an additional 2,500 rooms.

The Accommodation pipeline increased 26 per cent, or by $1.1 billion from 2011 to 2012 and it would appear that room yields are increasing after the fall in yield in 2009.

Table 11: Key indicators for Australia’s larger accommodation establishments

Room Supply Occupancy Rates $ per available room

Takings

At June Qtr 2012

Change: on Dec Qtr 2009

At June Qtr 2012


At June Qtr 2012


At June Qtr 2012


No. No. % % points $ % $ billion % NSW 70,348 -897 65.9 3.7 108.68 16.5 2.8 15.8 Vic 42,869 2,623 66.0 3.8 108.18 11.6 1.7 19.3 Qld 60,638 -1,025 65.6 3.8 99.90 12.2 2.2 11.0 SA 12,714 576 62.7 1.3 88.59 8.9 0.4 14.6 WA 21,716 -319 70.0 5.5 129.35 25.7 1.0 25.6 Tas 6,812 158 58.5 -2.4 80.64 1.0 0.2 3.6 NT 7,285 -101 63.9 1.5 99.06 4.0 0.3 2.8 ACT 4,786 -281 291.5 9.1 527.31 16.2 0.2 9.1 Australia 227168 724 65.9 3.4 106.45 14.2 8.8 15.2 At Dec

Qtr 2011 At Dec

Qtr 2011

At Dec Qtr 2011

At Dec Qtr 2011

Latest quarter (stock)


Latest Year ending


Latest Year ending


Latest Year ending


No. No. % % points $ % $ billion % Capital cities and Gold Coast

111978 2627 75.0 3.2 131.46 12.5 5.5 15.1

Regional Australia 114456 -2524 54.6 2.4 74.28 8.8 3.0 6.4 Australia 226434 103 65.3 2.9 103.85 11.5 8.5 11.9

Source: TRA State of the Industry Report, 2012, p. 56

As stated in the TRA State of the Industry 2012, however, there are two major investment gaps in the accommodation area, namely a deficiency in short-term accommodation in metropolitan

20 | P a g e

areas, especially in hotels and a lack of quality, but not quantity of accommodation stock in regional areas.

Figure 12: Real Yields per Available Rooms

Source: TRA State of the Industry Report 2012, p. 55

As illustrated in Figure 10, room yields are now increasing particularly after the low point of 2009. As the TRA State of the Industry 2012 report argues:

‘Rising accommodation yields, underpinned by strong growth in business travel, are triggering investment interest, but there still is some way to go for large-scale growth in room stock. Interest appears patchy with anecdotal evidence suggesting that lower end ‘3-4 star hotel’ accommodation is currently more financially viable than high-end 5-star hotels’ (p. 54)

6.1.2 Aviation In 2012, the total transport (aviation) pipeline investment was valued at $29 billion. Much of this assessment relates to aircraft fleet expansion by national carriers as shown in Table 12.

Table 12: Investment in transport (aviation) ($m), 2012

Under consideration / possible

Committed Under construction

Total

($ million)

Airport infrastructure

5,219 0 1,210 6,429

Aircraft 0 NA 22,511 22,511

Total 5,219 0 23,721 28,940

Source: TRA Tourism Investment Monitor 2013

According to the Tourism Investment Monitor 2013 the value of aviation pipeline investment increased by $7.9 billion in 2012, the increase being largely due to the growth in aircraft investment (up $5.8 billion). Airport infrastructure investment also increased (up $2.1 billion)

21 | P a g e

Figure 13: Australia’s international aviation sector, inbound seat capacity and passenger load factors

Source: TRA State of the Industry Report 2012, p. 59

As illustrated by Figure 11, the global aviation industry has experienced a range of crises with regard to air travel demand. In between these crises, significant investment has occurred not only in Australian airlines, but also competitor airlines – the introduction of low-cost carriers has impacted on fares generally.

22 | P a g e

7.0 Conclusion

In conclusion, global trends in Business Events such as the impact of technology, demographics and risk management have also impacted the Australian Business Events industry. In 2012, the flow-on effects of the GFC, the Eurozone crisis and the US fiscal cliff affected Business Events by creating a more cautious business environment. In Australia, the Business Events industry is well on its way to achieving its 2020 goal of attracting $16 billion from overnight Business Events delegates. Business Events were estimated to have contributed $24 billion in 2012 and this is forecast to rise to $31 billion by 2020. In 2012, the total expenditure from the industry rose 3% over 2011 expenditure to reach $10.0 billion. There was further growth in the China market, and traditional business event markets such as New Zealand continued to grow. Business meetings and conferences also showed increases in expenditure while expenditure in the incentive sector and exhibition sector experienced decreases of 28% and 2% respectively. With regard to international association events, however, Australian moved up from 16th position to 13th position. Australia also improved its position in the Asia Pacific region moving from 4th position in 2011 to 3rd position in 2012

There has been increased investment in infrastructure supporting the Business Events industry, in areas such as aviation and accommodation, with an accompanying increase in room yield from a low point in 2009. Increased investment and other positive signs such as improvements in the Australian ranking of international association conferences (ICCA 2012) auger well for future growth in Business Events.

23 | P a g e

References Association of Australian Convention Bureau (AACB) Performance Report, 2011-2012 Advito 2013 Industry Forecast and December 2012 Update BECA, Convention Arrival Figures – for the Australian Business Events Industry, issued January 2013 Business Events Sydney's (BESydney) Beyond Tourism Benefits: Measuring the social legacy of Business Events CIBTM 2012, IBTM Global Meetings Industry Research EEAA Factsheet Market Monitor #3 Insights 2012 Annual Report and July – December 2012 Six Months 30 April 2013

Fourth Annual INCON Survey of the Global Association Conference Market, www.incon-pco.com IRF Pulse Survey September 2012, Incentive Research Foundation Executive Summary. Critical Insights and Key Challenges, May 2012 Melbourne Convention and Visitors Bureau (MCVB) (2011) The Holistic Value of Events, Melbourne MPI 2012 Business Barometer Annual Report Newton, A., Grass Roots Meetings Industry Report 2013. 2012 Market Analysis & 2013 Forecast. Grass Roots HBI London Site Index Annual Study Executive Summary, December 2012, Site International Foundation

Talwar, R., Hancock, T., du Plessis, A., Lazarova, I., Saer, D., Carver, L. and Fast Future Research, (2012) The IMEX Power of 10 Study – What does the Next Decade Hold for the Global Meetings Industry? Tourism & Transport Forum (TTF). (2013) The Value of Business Events: Measuring the Value of the Australian Business Events Sector, 2003-2020. Sydney Tourism Research Australia, State of the Industry 2012, Canberra Tourism Research Australia (2013), Business Events – YE Dec 2009 to YE Dec 2012 Canberra Tourism Research Australia (TRA), Tourism Investment Monitor, 2013 UFI 10th Global Exhibition Barometer, December 2012 UNWTO Press Release No. 13033, 15 May 2013 http://media.unwto.org/en/press-release/2013-05-15/international-tourism-receipts-grew-4-2012

business events industry · pdf filebusiness events industry report ... executive summary...

Documents