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Asia Public AffairsSubmission to IBLAC (International Business Leaders Advisory Council) by Prudential Chairman, Sir David ClementiOctober 2005 IntroductionThe hosting of international conferences is a relatively new business in China, but it is growing rapidly, especially in Shanghai. After more than a quarter of a century of unprecedented economic development, Shanghai has already made tremendous progress in meeting the key criteria for becoming an attractive international convention destination. Yet despite its rapid development, Shanghai’s convention industry is still in its infancy with plenty of room for continued growth. On December 3rd, 2002, Shanghai was awarded the opportunity to host the World Expo 2010, intended to be the largest Expo ever. The hosting of the World Expo 2010 presents Shanghai with the opportunity to build on its existing strengths and advance the process of evolving into a world-class convention destination. With this brief introduction as a background, the following paper explores how Shanghai could develop into a top-tier convention centre by taking full advantage of the World Expo 2010. The paper will begin by making some general observations about the global convention market, followed by an analysis of the current state of Shanghai’s convention industry. Opportunities brought about by the World Expo 2010 will then be examined, with several concluding recommendations. General Observations on the Global Convention IndustryI. The Economic and Social Impact of Conventions on Host Cities Because conventions can yield significant benefits for their host cities, the state of the convention industry in a given locale is often used by economists as a barometer of a city’s overall economic health. Some of the key benefits of convention activity are as follows;
II. Features of a Good Convention Destination The key considerations in identifying an attractive convention destination include: access, accommodation, activities, culture, cuisine, hospitality, professionalism, safety, and weather. In each of these areas, event organizers check both for ‘basics’ and for ‘motivators.’ Basics – such as easy access and adequate accommodation – include the elements that must be in place for a location to be a convention contender. Motivators typically include unusual features – such as a particularly attractive entertainment offering – that will differentiate a location. Overview of Shanghai’s Convention IndustryChina’s convention industry is young but growing fast. According to an ICCA (International Congress & Convention Association) Statistics Report, China climbed (in terms of number of meetings hosted per year) from a world ranking of 30 in 2003 to a ranking of 15 in 20041. ICCA predicts that China has the potential to become the leading destination for meetings in the 21st century. Shanghai enjoys a number of advantages driving its rapid growth:
The following statistics summarise the substantial growth of the convention industry in Shanghai over the last year:
(Source: Statistics Report on International Association and Corporate Meetings Market 2003/2004, ICCA) Although Shanghai’s convention industry is already demonstrating robust growth, the city still faces a major challenge in developing its convention industry. Despite having hosted several world-class conferences in recent years including the Fortune Global Forum, the Forbes CEO Conference, and the APEC Summit Meetings, Shanghai is still not perceived as a top-tier global convention destination. Many conference organizers still have concerns about the language barrier, the choice of food, cultural differences, safety considerations, and service levels. In order to compete effectively with Hong Kong and Singapore2, Shanghai will need to address this perception issue – and any substantive issues that may be contributing to this image problem. SWOT Analysis
New Opportunities Brought by World Expo 2010The World Expo 2010 is a very significant opportunity for Shanghai. It is estimated that more than 70 million visitors will come to Shanghai during the Expo from May 2010 to October 2010. 5-10% of visitors will be from overseas and it is likely that visitors from almost every country and region in the world will attend. World Expo 2010 will be a bridge linking Shanghai to the rest of the world for six months. The longer term goal must be to maintain that bridge.
RecommendationsThe World Expo 2010 offers Shanghai a great opportunity to present itself as a global convention destination. However, the global convention market is highly competitive and Shanghai must satisfy a number of conditions to compete more effectively. Firstly, to establish a leading position in the global convention industry, Shanghai should continue to improve its facilities, build its professional and human resources and set high service standards. The city has to ensure that organisers and participants experience the highest level of convenience, comfort and service. The improvement can be divided into two aspects: ‘hardware’ and ‘software’.
Secondly, it is important that Shanghai adopts the right marketing strategy to promote itself as a desirable convention venue. A positive and progressive image of Shanghai must be presented and maintained over the long term. Efforts must be made to raise the already strong profile of the city, through media campaigns, promotional tours and films, and presentations to opinion leaders. Shanghai has a unique and fascinating history. Promoting the more exotic elements of the city’s past would be a useful counterpoint to the images of rampant construction and development and would serve to enhance the appeal of the city’s cultural attractions. 4Asia Pacific Property Digest, Jones Lang LaSalle Research, April 2005 The city with some of the world’s tallest buildings also needs to be seen as offering an intimate and authentic experience of the ‘real’ China, both old and new. Hong Kong has established itself as the hub of Asia; Shanghai has an opportunity to present itself as the ‘Heart of China’. Thirdly, Shanghai should endeavour to create its own conference brands. In the convention industry, a brand refers to an event that can reflect the developments and trends of a certain industry, and ultimately provide direction, inspiration and influence. The essential elements required to build a strong brand in the convention industry are: support from industry authorities and associations, scale, professional service standards, strong media presence and a consistent long-term strategy. Finally, Shanghai should intensify efforts to develop its service industry, especially in the key added-value sectors such as finance, insurance, commerce, transportation and telecommunications. The focus of this paper has been on the convention market which in turn can generate further trade and tourism. However, it is important to develop initiatives in a coordinated manner. Exhibitions and conferences will be beneficial to the city’s service sector. However, the development of the service industry can also help to boost the convention business. The prosperity of the convention market in Singapore and Hong Kong owes some of its success to the development of the service industries in those cities. ConclusionShanghai is China’s most exciting city and is home to many multinationals and leading Chinese corporations. China’s adherence to its WTO commitment of opening its service and financial sector by 2006 will particularly benefit Shanghai the most through stimulating growth in the corporate conference business. Shanghai already has many of the required elements in place to become a leading global convention destination. However, further improvements are both necessary and possible, especially in the areas of communications and promotion; creation of conference brands, and development of convention talents. Certainly, perceptions do not change overnight, and it will take time to develop Shanghai into one of the world’s foremost convention cities. Shanghai has much in its favour. Shanghai has an ethos of hard work, energy and entrepreneurship and is the most vibrant city in the world’s fastest growing market. The hosting of the World Expo 2010 is likely to be a catalyst accelerating Shanghai’s progress towards its goal of becoming one of the world leading convention cities. Appendix: The Successful examples of Singapore and Hong Kong Hong Kong: Hong Kong has good transport links and welcomes nationals from around 170 countries visa free. The city is well known for its entrepreneurial but well regulated commercial approach. Hong Kong has targeted the convention market in a focused and professional way. The Hong Kong Tourism Board, as well as having nineteen offices worldwide, has specialist offices for conventions and corporate events in Los Angeles, London and Sydney, as well as Hong Kong itself. There is also a well organised Trade body, the Hong Kong Exhibitions and Convention Association (HKECIA). This represents the exhibition and convention industries in working with government, legislative and statutory bodies and the media. It also works to raise levels of professionalism and operational standards in the industry and promotes Hong Kong as a major international exhibition and convention centre. To a large extent, Hong Kong as a convention centre is also benefiting from the development of China, as it is seen as a bridge or gateway to business on the mainland. Since 2002 the number of mainland companies exhibiting in Hong Kong has risen by 95%, to over 6,000 companies. There has been an associated rise in visitor numbers from the mainland with 128,000 attending exhibitions in 2004. Singapore: The island nation has world-class hotels offering unparalleled service, an extensive range of state-of-the-art facilities, modern communication networks, an airport with excellent air links, top-notch convention facilities that can comfortably accommodate up to 36,000 delegates, and a pool of trained convention professionals. Singapore has always been recognised as having the highest standards in the quality and services of its exhibitions and conferences. The city-state encourages the adoption of high international meetings standards, and always endeavours to champion the cause of raising industry professionalism and service quality. Singapore has an advanced management system for the convention industry. The Singapore Tourism Board (STB) is in charge of promoting the city-state as an ideal destination for meeting events. The Singapore Association of Convention and Exhibition Organisers and Suppliers (Saceos) and STB have been working together to promote the convention industry. Saceos aims to raise professionalism through education and training, as well as building a strong international network for its members.
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