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July 4, 2008
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CREDIT CRUNCH 3:Venue demand




“Conferences and incentives are vital to our business and there is growing excitement about this market today. Earlier, it was huge groups; and bigger infrastructure, bigger operational teams as well as large destination management companies were needed. When IBM had an annual incentive it would be a group of 4,000 pax. This has changed insomuch as such large groups don’t travel with the same frequency anymore. Now it would be more like 500 pax. This is a definite change in business trends,” says Ahmed Baki, regional director of sales & marketing, Middle East, Starwood Hotels & Resorts.

“Increase in prices of oil and gas, and increasing cost of transportation, is making everybody look more closely at the bottom line. The increase in mergers is also affecting business with big fish eating the small fish. This trend is noticed in the pharmaceutical and IT industries, where if there were 400 pharma companies, after takeovers and mergers there are only about 50 now. So instead of having 10 groups from two large IT companies, we now end up with 10 groups from just one company. These trends are affecting the meetings industry,” he says.

 


Marriott Dubai: In one of the most
expensive cities in the world

 

Optimum mix
According to Baki, companies are looking for new destinations as a way of alleviating costs. “Planners are always on the lookout for destinations that are exotic yet offer the optimum mix of business and leisure. There is a resurgence of destinations like Jordan,” Baki claims.

Samir Daqqaq, vice president global sales, Middle East & Africa, Marriott International, agrees that clients are now looking for cheaper destinations in the region as a way of reducing costs.

“Dubai is rated as one of the most expensive cities in the world. Meeting planners like to get more favourable options. We used to have big meetings in Dubai, but companies are now looking at other destinations because of the cost,” Daqqaq points out.

“In the region, Doha is very strong in meetings and incentives and has attracted some very large conferences and symposia.”

Unlimited potential
Bahrain is another market that appears to be holding its own when it comes to meetings business.

“The perimeter for meetings and incentives business is unlimited,” says Bernard Viola, general manager, The Ritz-Carlton, Bahrain Hotel & Spa. “Business is still very solid, and I don’t see any decline coming. July and August will be a little softer, as always, but business maintains pretty strong levels the whole year long.”

According to Marriott’s Daqqaq, the Middle East market has now reached a level of maturity that will enable it to move forward to tackle even larger, associations-based events, and he sees no stalling on this, regardless of the global credit crunch.

“The Middle East has become very sophisticated where meetings and incentives are concerned. Dubai is one of the most aggressive players and has been marketing itself in such a way that the city has sometime been preferred even over New York. This region is definitely on the right track. The only area where more work is required is in bringing the large association meeting to this region. Dubai has started that, but this has to still happen here in a big way,” says Daqqaq.

 

Look out for more features on the impact of the global credit crunch on the Middle East over the next few weeks.


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