At the Crossroads of Growth

The GCC’s strategic geographical location means the potential for meetings, incentives, conferences and exhibitions is significant in the coming years

A little less than a year ago, 14,500 employees of Chinese skincare firm Nu Skin Enterprises descended on Abu Dhabi and Dubai for what was the biggest corporate jaunt in the UAE’s history. The tourists—Nu Skin sales stars who were being rewarded with a trip to coincide with the company’s 30th anniversary—arrived in seven waves between 6-12 April. During their five-day trip, they took in attractions such as Ferrari World in Abu Dhabi, Burj Khalifa in Dubai and the Sharjah Islamic Museum. Yas Marina Circuit and Bab Al-Shams Desert Arena each threw two gala dinners for 8,000 people. The logistics involved were staggering: 77 flights including two A380 charters; 40,000 room nights in 40 hotels; and more than 370 coaches.

The event sealed the UAE’s reputation as a burgeoning destination for incentive tourism and underscored its ambition to win a lucrative segment of what is known as the MICE—or meetings, incentives, conferences and exhibitions— market. “A key opportunity for us remains the incentive market,” says Hamad Bin Mejren, the executive director of the Dubai Events and Convention Bureau (DECB), which is part of Dubai’s main tourism body, the Department of Tourism and Commerce Marketing (DTCM), and whose main aim is to establish the emirate as a premier business event destination. “Last year Dubai welcomed its largest ever incentives group and we’re keen to welcome even bigger groups.”

As the world economy continues to recover after the 2008 global financial crisis, tourism numbers are picking up. International tourist arrivals jumped 4.3 per cent in the GCC in 2013 reaching a record high of 39.6 million, according to a September 2014 report by Alpen Capital on the GCC Hospitality Industry. While both leisure and business tourism grew, the MICE segment— currently worth $1.3 billion in the GCC—emerged as one of the strongest drivers of that growth, the report said. The potential for additional growth is enormous, according to a separate report by Strategy&, the consultancy formerly known as Booz & Co. The reasons are threefold: the GCC’s geographic location “at the crossroads of the world” between the US and Europe to the west and Asia to the east; its growing trade activity; and because currently most such events are held in Europe and North America. “There is a large share of MICE business just waiting to come to emerging markets, including the GCC, if these countries improve their tactics and their position in the meetings market,” the Strategy& report said.

Currently, about 2 per cent of exhibitions take place in the Middle East, while 80 per cent take place in Europe and America. Both Abu Dhabi and Dubai have identified tourism as one of the key elements driving future economic growth. Abu Dhabi has included tourism as part of its Economic Vision 2030 to diversify the economy away from oil and gas; and Dubai’s Tourism Vision 2020 aims to double the number of tourists to 20 million from 10 million in 2010. Attracting more incentive travellers is part of these overarching tourism strategies. Across the wider GCC, Saudi Arabia, Oman, Kuwait and Qatar also have their own ambitious plans for the tourism sector.

In 2014, DECB organised more than 100 events in the emirate and promoted Dubai at more than 100 international events. Dubai already has 50 per cent of the region’s MICE market. Contributing to Dubai’s popularity is its world-class infrastructure—Dubai International Airport overtook Heathrow as the world’s busiest by international passenger traffic last year and the Dubai International Convention and Exhibition Centre is the largest in the region—and its increasing choice of after-hours leisure activities on offer. Winning Expo 2020 has also boosted its visibility. Still, the city is not complacent and is working to win more visitors by broadening its appeal to those on tighter budgets as well as highspending guests. “A key challenge for us is changing potential visitors’ perceptions of Dubai,” says Bin Mejren. “What many people who haven’t experienced Dubai may not realise is … how accessible it is from a logistical and budgetary point of view for both leisure and business travellers.”

The city also aims to win more association meetings. To do this, it set up the Dubai Association Centre and, five years ago, established the Al-Safeer Ambassadors programme which identifies Dubai-based academics, professional and business leaders and motivates them to attract conferences and events in their areas of expertise to the city. The city is also benefitting from a “joined-up” strategy that ensures good cooperation between the government and other tourism and travel entities—from airlines to hotels to venues to destination management companies (DMCs). “There is a strong support and true desire to be recognised as a robust MICE destination,” according to Sven Wiedenhaupt, general manager of Jumeirah Emirates Towers in Dubai, who says the hotel has experienced an increase in MICE guests since last year—a trend he predicts will continue.

Abu Dhabi is also ramping up its efforts to capture the incentives market. The Tourism and Cultural Authority (TCA) expects the business travel sector to contribute $1.39 billion to the emirate in 2020, up from $653 million in 2010, according to figures re-ported by The National newspaper. Taking its lead from Dubai, the TCA in March 2013 established the Abu Dhabi Convention Bureau to support the growth of exhibitions and conferences. The city aims to rank among the International Congress and Convention Association’s top 50 destinations for association meetings in 2018. In 2011, the ICCA put Abu Dhabi in 234th position. In 2013, Jumeirah Etihad Towers in Abu Dhabi scored two coups by hosting the Global Vaccine Summit attended by Bill Gates and the World Travel and Tourism Congress attended by Bill Clinton. The Abu Dhabi National Exhibition Centre (ANCEC) is also playing a key role. “As part of ADNEC’s new strategy, we are currently focusing on the specialised conferences sector through attracting more international conferences to Abu Dhabi due to their significant impact on the local economy when compared to the general exhibitions sector,” says Humaid Matar Al-Dhaheri, ADNEC’s acting group chief executive.

In 2019, ADNEC will host the World Energy Congress, the top global meeting for energy experts. ADNEC contributed 2.56 billion dirhams ($697 million) to Abu Dhabi’s economy in 2014, exceeding the 2.55 billion dirhams forecast. The centre hosted 327 events and more than 1.6 million visitors, an increase of 5.2 per cent over 2013.

Business tourists are a particularly coveted group because their spending far exceeds that of holidaymakers. Corporate travellers in Abu Dhabi spend seven times as much as leisure tourists, according to ADNEC. The firm is pursing association meetings in sectors of the economy that the government isstriving to expand including tourism, petrochemicals, transportation, financial services, and media and broadcasting. Within Abu Dhabi, Yas Island is emerging as one of the most appealing destinations for business travellers. “Simply put, there is nowhere I know where you can find this mix of the best meeting spaces, theme parks, attractions, over 100 dining options, a superb shopping mall, state of the art hotels, all on a compact convenient island minutes from an international airport,” says Clive Dwyer, director of Yas Island Destination Management, a division of Miral Asset Management. Yas Island has recorded doubledigit growth in business events, especially from the GCC, China and Indian markets, in the past three years, according to Dwyer. In 2014, there was also an increase in corporate bookings for events such as the Etihad Formula One Grand Prix and concerts held on the island. Later this year, the team will launch Yas Island group sales to more easily cater to corporate clients.

While the UAE has emerged as a leader in accommodating MICE visitors, other countries across the GCC are also vying for a slice of the action. Saudi Arabia is targeting 20 million tourists a year by 2020, a goal it is likely to achieve given that tourism numbers rose 11 per cent to 18 million in 2013. The kingdom has the strongest pipeline of hotels in the GCC and plans to expand all of its four international airports (work has started at three). In pursuit of the incentives segment of the market, in 2013 it established the Saudi Exhibitions and Conventions Bureau.

Qatar also has a solid MICE component in its National Tourism Sector Strategy 2030. While Qatar, Kuwait and Bahrain are geared up for business travellers, almost all tourists arrivals are business related, according to Strategy&. “These countries do not have the ancillary leisure products that add pleasure to a business trip and that can make the difference in a businessperson’s decision to travel to a far-flung destination,” the firm said in its report.

While Oman has far fewer tourists— including business tourists—compared to its GCC neighbours, those that do come are more likely to be incentive tourists. Of the UAE’s 4 million business tourists in 2012, half were incentive travellers. In Saudi Arabia, of the 1.3 million business travellers, 34 per cent were incentive travellers. Of Oman’s 120,000 business tourists in 2012, 40 per cent were incentive travellers. The sultanate is hoping to boost its attraction as a MICE destination in 2016 after it opens the Oman Convention and Exhibition Centre, a complex that will include four hotels, an auditorium seating 3,200 people and more than 22,000 square metres of exhibition space. “To date Oman has been successful with incentive programmes and smaller conferences in the absence of a world-class and purpose built conference and exhibition centre,” says Trevor McCartney, the centre’s general manager. “Nonetheless, the sultanate has continued to receive propositions for hosting larger-scale events”, which in 2016 will be possible. As well as the centre, the government of Oman has embarked on other large-scale infrastructure projects and the centre has also teamed up with the Oman Ministry of Tourism to promote the country at MICE trade shows in Spain, Germany, the GCC, India and Australia.

Although the recent decline in oil prices and the fall in the euro, pound and rouble versus the GCC currencies is “affecting Dubai’s competitiveness in the short term”, says Bin Mejren, optimism among those operating in the GCC MICE sector remains strong. “Despite this, we are confident that Dubai will remain an attractive business event destination in high demand among global meeting and conference planners due our high-quality holistic offer.” Lower fuel costs, making airline tickets cheaper, may even increase delegate numbers, Miral’s Dwyer says.

Having dominated the MICE market for so long, should the US and Europe be concerned about emerging destinations in the Middle East? “You have to look at the global meetings industry and its evolution,” says Dwyer. There was a time when Europe was a centre for medical and scientific research, engineering and commerce and conferences were naturally held there. Later the USA dominated and, with increased aviation capacity, Southeast Asia started holding events. “In recent years, the UAE has quickly become the new destination due to the globally central location, a dynamic new economy, an attractive destination proposition, the provision of significant infrastructure and aviation capacity. Seven years ago, Yas Island didn’t exist. Today, we are known by that and welcome visitors around the world,” he says.