Brand Philippines: Attracting international conferences

Michael Alan Hamlin

Posted on August 30, 2006

Tourism needs to refocus

According to an annual survey of the Asian conference industry released in January by Conference Exhibitions Incentives Asia Pacific magazine, 197 international meetings were scheduled to take place this year. China was the most popular venue, with 26 scheduled events. It was closely followed by Hong Kong and Singapore, with 24 high-profile meetings planned.

The next most-popular venues were Thailand and Australia, where 18 meetings each were scheduled. Malaysia was next, with 16 meetings. India had eight conferences planned. And in the Philippines, four meetings were planned. You will note, of course, the obvious correlation between Asia’s fastest-growing economies and the number of conferences.

The conference, exhibitions, and incentives (CEI) industry is a strong generator of revenues from corporations which underwrite meetings and send delegates, and well-heeled delegates themselves because they spend additional sums on gifts, entertainment, and tours. Marketing the industry as a component of a country brand makes a lot of obvious sense.

Countries that are serious about leveraging the CEI industry invest in the infrastructure required to attract high-margin, world-class events. Hong Kong, Singapore, and Sydney are obvious examples with stunning waterfront conference and exhibition venues. Bangkok and Shanghai boast convention and exhibition bureaus that actively assist meeting investors and planners in identifying and booking venues. Malaysia markets impressive conference facilities in Kuala Lumpur, Penang, and even Langkawi.

In the 1970s, the Philippines also competed aggressively for CEI opportunities, building what was then a world-class convention center and providing incentives for development of five-star hotels. As a result of poor management in other areas of the economy during that period, administrations post-1986 have tended to neglect the industry, with predictable results: infrastructure, meetings, and arrivals all declined.

Recently, however, the CEI industry appears to be generating more respect. The dilapidated Philippine International Convention Center – which is managed by the Bangko Sentral ng Pilipinas – is currently undergoing a significant makeover. Cebu is building its own international convention center. And the SM Group is said to be planning a world-class international convention center next to its latest flagship mall, The Mall of Asia.

The revenue potential and increasing recognition of the contribution of the CEI industry to economic development and job generation make it difficult to understand why the Department of Tourism (DOT) doesn’t seem to take it very seriously. I recently attended a presentation by a DOT representative, and was surprised to learn that the CEI industry isn’t a priority.

Instead, according to the DOT representative and a separate interview of DOT secretary Joseph Durano in Tourism ASEAN, overseas Filipinos – balikbayan – are the principal targets, along with Asia-region tourists. In the interview, Durano said, “We are targeting the second and third generations of overseas Filipinos who have never been to the Philippines. We are focusing our marketing strategy at the overseas Filipino associations.”

There’s nothing wrong with marketing to overseas Filipinos, of course, and certainly not to regional tourists. According to DOT, Koreans compose almost 19 percent of arrivals, second only to residents of North America at 22 percent. The Philippines is a popular choice in the Korean market for honeymooning couples, company incentive programs, and family vacations. Many Korean parents send their children here to learn English, as well.

Korean tourism is important to the Philippines not just because of the number of arrivals, but because Koreans are value-added tourists. They spend significant amounts on hotels, restaurants, and even schools. Japan is another important source of hard-spending tourists, and accounts for more than 15 percent of arrivals. No other country or geographic region accounts for even five percent of arrivals.

What’s wrong with this picture? Two things. First, balikbayans are not value-added tourists (although they are surely valued). They bring gifts into the country in balikbayan boxes, rather than spend here. Relatives usually put them up in their homes, so balikbayans don’t spend on hotels. The extended family invites them to a constant stream of dinners, mostly at home, so they don’t spend much on entertainment.

Second, other “kinds” of tourists, such as executives attending conferences and taking family vacations, do spend significant amounts of expendable income while traveling overseas. So DOT should focus on two things: 1) Its three most important markets: North America, Korea, and Japan; and, 2) High-value segments like the CEI market that generate affluent visitors ready to spend, high margins, and a positive global image.

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