In today’s Finshots, we explain how India plans to stretch its arms over the conference tourism market.
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The festive season is in. Hotels are making sure that they’re sufficiently staffed. Airfares are already running uphill. The hospitality industry is on its toes. Everybody knows this is when you make the most money. It makes up for the lean months when people don’t travel as much.
But what if there was a way to keep India’s travel and tourism business ticking all year round?
We’re talking about the government’s plan to double down on tourism through the MICE program. What’s that? Well, the acronym expands this way - meetings, incentives, conferences and exhibitions or events.
You see, India has less than a 1% share in the estimated global MICE business. But the global MICE industry was valued at over $900 billion in 2019. That’s a big market and recent events may have forced us to rethink our approach when it comes to this sector.
Just look at how much the G20 summit and the upcoming ICC Men’s Cricket World Cup have positively affected business travel. Delhi for example is too busy to breathe. The travel demand, measured using the travel demand index was 40% higher than usual.
International flight arrivals for business purposes were up 63% Y-o-Y at the Indira Gandhi International Airport. That’s what data from Adara, a data collection firm owned by RateGain suggests.
In fact, the average revenue per room sold in Delhi quadrupled over the last year in just 4 days when India hosted the G20 delegates.
Even travel companies like Thomas Cook (India) have witnessed a 289% Y-o-Y growth in their MICE business during the first half of 2023. Put all of this together and you’ll understand why India thinks of MICE tourism as an exciting prospect. The opportunity looks so promising that it now wants to double its share in the global MICE business to 2% over the next 5 years.
But here’s the thing. ICCA, an association that analyses the meetings industry releases an annual report every year. In it, it ranks countries and cities by the number of meetings they hold. In 2019, India took the 28th spot with over 150 meetings. For comparison, the US was at number 1 with over 900 meetings.
In 2022 though, India slipped down 9 spots and was ranked 37. But according to the Ministry of Tourism, we aspire to be in the top 20 by 2027. So regaining our lost ranking and making it to the top ― that’s clearly two problems at hand.
How do we solve that, you ask?
Well, the first thing of course is to perk up infrastructure.
If we want more people to meet in India, you have to get the basics right. For starters, you need more hotels that match international standards. And that is no easy feat. It’s quite capital-intensive. Hoteliers will need to acquire vast spaces of land. Get all the permits and licenses. And also equip their locations with amenities and services that appeal to both local and global guests alike. And they can only do this if the government gives them a leg up.
But the government has its own priorities. See, they can allot “infrastructure status” to certain industries. Once they do that, any project within the industry can borrow at attractive interest rates. After all, they are aiding the government’s infra push. But currently, the only hotel projects that get this privilege are those that cost over ₹200 crores. And over the last few years, more hotels have asked for this status. It could not only promote infrastructure for MICE but also boost the tourism industry in general.
But hotels aren’t the only expansion we need. There’s convention centres and meeting halls too. Look, India doesn’t really have venues that can accommodate large crowds of about 7,000 to 10,000 people. So the government has extended the infrastructure status to such large projects too. It could be exhibition centres, convention halls or auditoriums. As long as they meet the minimum floor area requirements, they’re covered. And they’re actually delivering great results.
We have the government-backed Bharat Mandapam at Pragati Maidan which is the best example of attracting MICE business. That’s where we hosted the G20 leaders summit recently. And the Yashobhoomi Convention Center in Dwarka is set to become one of the largest MICE centres globally. Mumbai’s Jio Convention Centre too has already hosted about 800 events in FY23. One of the reasons it has been able to do that is exhibitions, which accounted for nearly a third of the centre’s business.
If you think about the big picture, exhibitions can actually be a doorway for India to get ahead in the MICE business race. Because the Indian exhibition industry has grown rapidly at about 8% over the last few years. Trade fairs alone generate a whopping ₹3 lakh crores annually. And they go beyond just bringing in revenues. They generate employment, spark interest in ‘Made in India’ products and also boost business for others in the sector when they onboard folks like event management companies and caterers.
Now, all these ambitions cannot materialise without giving the whole MICE salad a perfect dressing. We’re talking about smoother regulatory processes. The government plans to ease this through incentives like simple single-window clearances for events. Or even reimbursing the bid costs for huge global events to those who bag the tender.
On a lighter note, Indians are popular for their hospitality. So if marketed well, these strategies could go a long way in getting India closer to its MICE goal. We’ll only have to wait and see how it all pans out.
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