Published: 15:33, August 21, 2020 | Updated: 19:25, June 5, 2023
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MICE industry has bright future despite current pain
By Edith Lu in Hong Kong

It’s the city’s face to the world — the emblematic Hong Kong Convention and Exhibition Centre that witnessed Hong Kong’s return to the country in 1997 after 156 years of British colonial rule.

Since its opening in November 1988, the meetings, incentives, conventions and exhibitions (MICE) industry has seen rapid growth, riding on Hong Kong’s unique status as a prime global trade and logistics hub.

To date, the HKCEC, with its undulating, flapping-winged structure overlooking Victoria Harbor, has hosted nearly 50,000 events and welcomed more than 121 million visitors.

To meet growing demand, the SAR government has plans to further expand the HKCEC, and make it one of the world’s top exhibition and convention venues.

But the coronavirus pandemic has dealt a blow to the center’s ambitions, with physical conferences and exhibitions stalled or scrapped amid worldwide travel curbs and social distancing measures to curb the spread of COVID-19.

The Hong Kong Trade Development Council — created in 1966 to market the city’s trade and business potential — said one of the big casualties had been the annual book fair, which attracted 980,000 visitors over a seven-day run last year.

The fair, encompassing 26 events organized by the HKTDC, had been put on hold or shifted online, said Benjamin Chau Kai-leung, the council’s deputy executive director.

The pandemic, coupled with the aftershocks of the city’s months-long social unrest and protracted Sino-US tensions, begs the question: Could Hong Kong further consolidate its position as Asia’s trade fair capital and a premier international convention and meeting place?

“We’re staring at a fairly dramatic loss this year,” Stuart Bailey, chairman of the Hong Kong Exhibition and Convention Industry Association, said.

“On an annual basis, events taking place here in Hong Kong generate an economic impact of HK$52.9 billion. Now, we can say we’ve lost half of that revenue as all the events didn’t take place in the first half.”

He takes a dim view of this year’s second half as well, believing that even if some events go ahead, the scale will be much smaller. However, he’s optimistic that businesses will return eventually when people are able to travel freely.

According to the HKTDC, 80 percent of buyers, which it had interviewed earlier, said they need to make purchases in the second half and will return to Hong Kong once the travel restrictions are relaxed.

Besides the coronavirus shock, relations between China and the United States are at a low ebb, which could have serious implications for Hong Kong’s status as an international hub in many sectors.

US President Donald Trump signed an executive order on July 14 ending the special status for Hong Kong that had, in the past, exempted the city from certain tariffs, among other privileges.

“The city will continue to be a free port whatever Trump thinks, as the fundamental strengths of Hong Kong still exist and will not go away because of the pandemic or the political fallout,” Bailey said. 

These fundamental strengths include Hong Kong’s location which will never change.

Sitting at a meeting point of East and West, accessibility is a key advantage for the city — visa-free access for nationals of nearly 170 countries and regions; half the world’s population within a five-hour flight; over 11,000 flights daily to and from some 170 destinations worldwide.

Bailey believes Hong Kong will continue to be a springboard for global companies looking to go into China, and vice versa. It’s long been a truly global meeting place connecting people from China and the rest of the world.

What worries Hong Kong’s exhibition organizers and exhibitors more is competition from neighboring cities like Macao, Shenzhen and Zhuhai, as well as doubts about the effectiveness of traditional exhibitions in acquiring new clients.

Since the MICE industry induces multiplier effects on related businesses, such as travel, dining, entertainment and hotels, Macao is vigorously developing the sector as part of its five-year plan. 

A report by the Macao Research Centre says the city’s moderate political atmosphere favors implementing new policies targeting the development of the MICE industry.

One of Hong Kong’s key handicaps is its relatively high booth rental fees which cost twice as much as other cities, because of soaring labor costs, Anna Lam, general manager of China Pearl said. China Pearl is a Hong Kong exporter which owns a factory on the Chinese mainland manufacturing tableware.

The company used to spend US$80,000 to US$100,000 setting up booths to promote its products at each exhibition. Normally, it attends five major exhibitions in Germany, Chicago, Hong Kong and Guangzhou each year.

To lure back businesses, the HKSAR government has rolled out aggressive subsidies for event organizers, covering full venue rental costs at the HKCEC for 12 months.

Wilson Lee, general committee member of the Hong Kong Exporters’ Association, said the government should take a long-term view and help the industry build Hong Kong into a destination for professional exhibitions and top-quality fairs.

He expects the events here to become more high-level and international to meet exhibitors and buyers’ higher expectations.

“Hong Kong events should embrace more categories of products, exhibitors and buyers from various countries, making people coming here feel the trip and the expenses are worthwhile,” Lee said. 

The SAR government and the MICE industrial sector could also adopt more innovative measures. These will strengthen the effectiveness of such events by constructing smart convention platforms to provide accurate, timely and participant-friendly information, and integrating technology like cloud computing and big data.

Luring more participants is always the primary aim of the industry regardless of the form. As Lam said, exhibitors will go wherever the buyers are.