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October 21, 2014

Middle East: Why Conference Venues Need to Adapt to Survive

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Perhaps the biggest challenge for conference managers today is retaining share in an increasingly competitive marketplace. This unearths associated challenges of revenues per metre and ensuring the continuing relevance of a space and, in some cases, the location itself. 

In a climate of more venues, ongoing budgetary pressures and increased client demands – and also exhibitor and attendee sophistication – the key to any facility’s survival is adaption. Here, Geoff Donaghy, President, International Association of Convention Centres (AIPC), offers his views on how centres can ensure they continue to attract great business. 

What is the reason for the increased competition in the meetings sector? 
There has been tremendous growth in the centre product in recent years, through both new entries into the market and the renovation and expansion of existing facilities. Ironically, this growth continued right through the recent economic recession, largely because many projects were already underway as well as the fact that several governments saw convention facilities as a way of accessing the many benefits the industry offers. 

What’s been the effect of this competition? 

Clients now enjoy a lot more choice and centres have to compete harder for their business. We have what is essentially a buyer’s market, meaning that organisers and those acting on their behalf can and do negotiate hard and, in many parts of the world, look for incentives and discounts beyond anything we’ve seen in the past. That means everyone needs to find new ways to distinguish themselves. It also means that centres that can’t deliver a high-quality product are finding it tougher to attract business because there are so many good alternatives. 

How can centres and facilities adapt? 
Events are constantly evolving in terms of formats, technology and delegate expectations and centres need to be able to respond to this, often within the constraints of a fixed set of spaces. The key to success is increasingly an ability to create flexibility in both facilities and services that can respond to new demands. 

At the same time, business practices are also changing rapidly in ways that create different sets of relationships and approaches to booking and delivering events. For example, time frames in the booking cycle have shortened dramatically and traditional methods of booking accommodation have shifted in the face of online alternatives. All these factors impact things such as business projections and market strategies and place new demands on centre staff who again need to adapt in order to compete successfully. 

Can more investment in centres help? 
Around 80 percent of centres today are owned by some level of government and many governments have been under significant pressures arising from the financial crisis. That has, in turn, put downward pressure on centre revenues at a time when many governments are challenged in their own finances – which means that the ‘pure’ economic rationale based on incremental visitor spend often isn’t enough to justify ongoing investment. 

Of course, centres aren’t just about generating visitor spend – they’re more about what events can do for a destination, from creating broad economic impacts to facilitating knowledge transfer and attracting new investment. As such, centres need to do a much better job of underlining their broader role in supporting community development policies and demonstrating how they are helping respond to today’s most urgent government priorities – and many are doing just that. 

Has there been an evolution in how clients select a destination? 
Location decisions are the result of a range of factors, such as the quantity and quality of available accommodation, safety and security, ease of access, overall cost structure and attractiveness to delegates. For venues, two emerging factors in recent years have been technology and connectivity and the quality of the experience offered in both the centre itself and the immediately surrounding area – important because many delegates spend the bulk of their time in and around the facility. Centres that can respond to these factors have a better shot at the available business. 

How does AIPC support its member centres in the face of these kinds of challenges? 
– It provides research and analysis around industry conditions and client expectations that help members better plan marketing and management strategies. 
– It offers a range of education programmes that help centres develop more knowledgeable and effective managers in key areas such as sales and marketing, operations and facilities management.
 – It provides globally recognised quality standard guidelines that centres can use to benchmark their performance against industry competitors. 
– It maintains strong interactions with other global industry associations in order to access reliable information on market demands and planner expectations. 
– It creates events and systems that enable centre staff to network with their global counterparts and access a wide range of experience and expertise. 
– It maintains awards programmes that enable member centres to distinguish themselves as centres of excellence. 

Recent initiatives have included the development of a standardised economic impact calculator that can be used for performance reporting; a revised award programme that provides in depth analysis on how clients evaluate facilities and services; and the AIPC Academy, an initiative that enables centre participants from around the world to learn about, analyse and develop strategies around key industry issues. 

Where do you see the meetings business heading from here and how should we respond to the changes? 
There is a number of things we can expect just on the basis of where trends are heading. Firstly, as the economy improves, so does the sector, although we will see a lot of variability around the world. Secondly, content, formats and technology will continue to develop and we will have to learn how to adapt and respond to these in order to deliver the best experience to delegates. Thirdly, as we’ve said, competition will remain intense. 

Finally, we need to respond to the fact that we may be facing any number of unknowns and be ready for that. This means not just creating more flexible facilities and services but also adopting a new kind of attitude towards change as something that is to be expected rather than avoided. 

AIPC will continue to monitor changing conditions and expectations and develop new ways that members can, not only access useful resources, but also interact more effectively with one another to benefit from the world of experience among our membership. 

Geoff Donaghy is AIPC President, CEO of International Convention Centre Sydney and Director Convention Centres AEG Ogden
AIPC represents a global network of over 170 leading centres in 54 countries with the active involvement of more than 1000 management-level professionals worldwide. It is committed to encouraging and recognizing excellence in convention center management, based on the diverse experience and expertise of its international representation, and maintains a variety of educational, research, networking and standards programs to achieve this. AIPC also celebrates and promotes the essential role of the international meetings industry in supporting economic, academic and professional development and enhancing global relations amongst highly diverse business and cultural interests. 

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