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January 21, 2009

Russian events market is cautiously optimistic

Recent research reveals an upbeat, but wary Russian events industry, which is confident of further growth in 2009.

Meetings, incentives, conferences and events (MICE) business is growing in Russia. It is reported to be worth more than $150 million a year and increasing fast, with more than 3 million Russians travelling internationally on business trips. In fact, Russia is becoming one of the most dynamic sources of business travel in the world.

A pre-Christmas 2008 survey of the Russian MICE sector has revealed cautious optimism for business, despite the global economic crisis.

“The aiGroup are the organisers of the Moscow International MICE Forum on 17 March, and as so many of our participants travel a long way to Moscow, we felt that it was our duty to make a study of the market to establish the prospects for the coming year,” said aiGroup’s Kim Waddoup.

Russia has been affected by the global downturn with substantial losses on the country’s stock exchange, but, as an emerging market, businesses in general are confident that it will be a relatively short-term situation that will improve over the coming months.

Further growth
The brief survey was conducted using a representative cross-section of the Russian MICE sector. The results indicate that while some down-grading or reduced budgets may happen, the market is destined to continue, and will again record growth within the year.

The general consensus among corporate buyers, however, indicated that the number of delegates travelling on incentives and conventions may actually grow, as Russian companies realise the importance of international trade contact, and as incentives are offered to staff to improve sales in this competitive environment.

Summary of the findings
The results of the survey indicate that out of the Russian MICE sector:

41% believe that the crisis in Russia will be over within 6 months
33% believe that the crisis in Russia will take up to a year
26% believe that the crisis in Russia will take more than 1 year

35% indicated that MICE budgets will continue as they are
47% indicated that they expect MICE budgets to be reduced by 15%
18% indicated that they expect MICE budgets will be reduced by more than 25%

57% Corporate Buyers indicated that the number of delegates travelling in 09 will increase
43% Corporate Buyers indicated that the number of delegates travelling in 09 will decrease

45% Corporate Buyers indicated that the value of MICE travel in 09 will remain the same
55% Corporate Buyers indicated that the value of MICE travel in 09 will be reduced

Creativity is vital
“As a developing country, most of Russia is not burdened with excessive debt,” explained Waddoup. “While some large companies are struggling, most Russian medium and medium to large-size organisations are well capitalised and secure.

“Cost-cutting is being carried out and efficiency being carefully scrutinised for the first time. The fall in value of the rouble will affect imported goods, but Russian industry has improved greatly in recent years, and the domestic market continues to grow.”

Although the Russian MICE market will undoubtedly be affected by the global downturn, and some high-profile events will be downsized, Waddoup stresses that the importance of sales and productivity is recognised by Russian management. She advises MICE suppliers look towards creative ideas as opposed to the availability of high budgets for previous spectacular events.

“The good news is that optimism remains,” she said, “with the number of participants booked for the Moscow International MICE Forum higher than previous years.”

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