POSITIONING AUSTRALIA AS A DESTINATION FOR BUSINESS EVENTS A challenge and an opportunity. Two papers
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1 POSITIONING AUSTRALIA AS A DESTINATION FOR BUSINESS EVENTS A challenge and an opportunity Two papers 1. Executive Summary of the Pre-Budget Submission & 2. Supplement to The Submission 13 June 2007 Contact details: Business Events Council of Australia Elizabeth Rich Tel elizabethrich@a1.com.au
2 1. Executive Summary of the Pre-Budget Submission (November Updated June 2007) 1 The Business Events Council of Australia The Business Events Council of Australia (BECA) is the peak industry body representing the interests of the business meeting, convention, incentives and exhibition sectors in Australia. 2 Purpose of this submission This submission calls on the Australian Government to increase its funding for the Business Events industry in Australia by establishing a new and dedicated Division within Tourism Australia (TA) to strategically market Australia as a leading Business Event (BE) destination. The need for this funding is urgent due to the dramatic and continuing decline in Australia s market share of the international BE sector. Accordingly, BECA calls on the Government to allocate funding in the Budget to establish this Division. BECA has developed a funding model which calculates a share of TA funding that should be allocated to the new Division. For the year, the model calculates an incremental allocation of $21.4 million. 3 Contribution of the BE Sector in Australia The BE sector is a high yielding sector given the level of expenditure of BE delegates and the attraction of some 550,000 visitors each year. International conference delegates can spend up to nearly six times more (on a per day basis) than the leisure tourist and nearly 1.5 times as much per trip. Overall and including both direct and indirect effects, business events contributes 2% of value added in the Australian economy. The National Business Events Study (Deery et al, 2005) (NBES) estimated total expenditure attributable to the BE industry is approximately $17.3 billion per year. The NBES estimates value add by the BE sector at $6.13 billion. Business events employ (directly and indirectly) over 214,000 people. This includes 116,000 in direct employment accounting for 21% of direct employment in tourism (Deery et al, 2005, p. 98). International conference delegates spend up to 5.6 times more per day than the leisure visitor, and nearly 1.5 times as much per trip. 4 Australia Loses Market Share Over the last 10 years, there has been significant international growth in both the number of meetings held and the number of delegates attending BE worldwide.
3 Statistics from the International Congress and Convention Association (ICCA) demonstrate a 51% growth in the number of association meetings and a 34% growth in the number of delegates attending association meetings in the period 1996 to 2005 (ICCA, 2006). Whereas in Australia there has only been a 30% growth but an 11% drop respectively in both these key statistics (ICCA, 2006). Compare this to the growth occurring with some of our regional competitors and also with more mature markets in Europe (see Graphic below). The international growth has been linked with a dramatic increase in the number of serious competitors entering the market to capture a share of the BE market. This has been accompanied by a massive investment in convention centre and associated infrastructure in these new, as well as, established markets. 5 Industry Potential The success of many BE sectors around the world, particularly in the Asian region, demonstrates the significant growth opportunities for those countries that choose to take a proactive role in this industry. This is not just the case with direct economic benefits which flow from hosting BE, but also the added value they bring to their national industries and economy.
4 BECA believes that there is a significant opportunity for the Australian Government to adopt an innovative long term industry development policy using BE as a platform to launch and grow specific industries in which Australia has a competitive advantage or has targeted for development and growth. 6 Government Action Required In this submission, BECA is calling on the Government to provide additional funding to support the re-capturing of Australia s share of the international BE market and to position Australia as a recognised leader as a BE destination. This funding should commence in the year. BECA believes that the initiative to recapture the BE market should occur via a new stand alone Division within Tourism Australia which is charged with, and accountable for, implementation of a dedicated marketing strategy. The BE sector must be clearly differentiated from, and marketed differently to, the leisure tourism market. This is not being done currently within the existing TA structure, hence the need for a new and dedicated Division of TA. With the assistance of KPMG, BECA has developed a Business Event Funding Model (BEFM) that calculates a share of funding that the Government should allocate to the new Division within TA to support BE. The incremental funding required for the year is $21.4 million (refer to the full submission for modeling details) or a total of $25 million per annum including estimated current spend. 7 Conclusion In this submission, BECA has articulated its short and long term vision and goals for the BE sector. In the short term, there is an urgent need for Government to commit additional funding to appropriately position Australia as a BE destination to win back BE business lost to our competitors in a growing world market. This must be done through an increase in funding for TA to implement a new and targeted strategy aimed at the BE market. In the long term, there is a huge opportunity for the industry and for Government to implement an innovative policy and strategy that will see BE promotion integrated into overall industry policy.
5 Appendix 1: BECA Organisational Chart + Overview
6 BECA Overview BECA'S Aim To foster the development of the business events industry in Australia through close liaison and cooperation between the key segments of the industry - meetings, exhibitions, incentives, and special events. BECA's Objectives: maintain a watching brief on trends/developments affecting the business events industry develop positions on issues of common interest communicate industry views to government and to Tourism Australia encourage improvement and expansion of the BE work undertaken by Tourism Australia support adequate government funding of convention bureaux raise the profile of business events to government and business community consider, recommend and coordinate industry-wide research projects BECA's Members: The main common interest that all organisations have in their membership of BECA is to foster and develop their respective members to create a leading business events industry in Australia. Its membership is as follows: The Association of Australian Convention Bureaux (AACB) Exhibition and Event Association of Australasia (EEAA) International Convention and Congress Association (ICCA) - Australian Chapter Australian Convention Centres Group (ACCG) Meetings and Events Australia (MEA) MEA's Meetings Managers Special Interest Group BECA COUNCILLORS: Chairman: Geoff Donaghy (Director, Ogden IFC Pty Ltd) Executive Director: Elizabeth Rich Robyn Hendry, President, AACB (CEO, Canberra Convention Bureau) Michael Cannon, Executive Director, AACB Martin Winter, Chairman, ICCA Australia Chapter (CEO, Adelaide Convention and Tourism Authority) Barrie Markey, ICCA Australian Chapter (Managing Director, ICMS Pty Ltd) Linda Gaunt, Chief Executive, MEA Annabel Davis, President, MEA (International Sales Director, Sydney Convention & Exhibition Centre) Robert O'Keeffe, President, EEAA (Chief Executive, Brisbane Convention & Exhibition Centre) Kevin Doherty, General Manager, EEAA Ray Shaw, MEA Meetings Managers SIG (Managing Director, Intermedia Pty Ltd) Roslyn McLeod, MEA Meetings Managers SIG (Managing Director, Tour Hosts Pty Ltd) Ton van Amerongen, ACCC (Chief Executive, Sydney Convention & Exhibition Centre) Leigh Harry, ACCC (Chief Executive, Melbourne Exhibition and Convention Centre
7 Appendix 2: 22.50% International Association Meetings Movements In Regional Marketshare, (Asia/Middle East and Australia, ICCA) 20.50% 18.50% 16.50% 14.50% 12.50% 10.50% Australia China Singapore Korea Hong Kong 8.50% 6.50% 4.50% 2.50%
8 Appendix 3:
9 2. SUPPLEMENTARY PAPER TO BECA S PRE-BUDGET SUBMISSION, November June 2007 Contact details: Business Events Council of Australia Elizabeth Rich Tel elizabethrich@a1.com.au
10 PURPOSE OF THIS PAPER This supplementary paper is not intended as a stand-alone document. It should be read in conjunction with the original Pre-Budget Submission prepared by BECA in November In this paper, BECA is responding to a request from the Australian Government and Tourism Australia to provide a suggested plan for the proposed $25M per annum funding. SNAPSHOT BECA S RECOMMENDATIONS: 1. Total annual spend of $25 million by Australian Government to position Australia as a business events destination. 2. Dedicated resources within TA to deliver this specialised, B2B marketing. 3. Formalised process of industry consultation. INTRODUCTION The Business Events Council of Australia The Business Events Council of Australia (BECA) is the peak industry body representing the interests of the business meeting, incentive, convention and exhibition sectors in Australia. BECA calls on the Australian Government to increase its funding support for the Business Events industry in Australia by establishing a new and dedicated Division within Tourism Australia (TA) to strategically market Australia as a leading Business Event (BE) destination.
11 The need for this action is urgent due to the dramatic and continuing decline in Australia s market share of the international BE sector. Our call is for ongoing dedicated funding of a total of $25 million per annum for business events marketing delivered through Tourism Australia. STRUCTURE The high yield BE sector must be clearly distinguished from, and marketed differently to, the leisure tourism and major events markets. BECA believes that, in order to grow Australia s share of the international business event market, there needs to be a dedicated, specialised division within Tourism Australia which is charged with, and accountable for, the development and implementation of a strategic marketing plan for the Business Events market. A general diagrammatic view is provided below to illustrate BECA s proposal. This recommended structure, with a dedicated Business Events Division, is in line with industry-recognised world s best practice (refer PBS for further information). This well-resourced division would have: a dedicated published annual budget a published annual marketing plan with KPIs senior strategic manager at executive level reporting directly to the CEO specialised staff with BE competencies, in all key markets as well as Head Office
12 BECA S PREFERRED STRUCTURE FOR BUSINESS EVENTS AT TOURISM AUSTRALIA MINISTER FOR SMALL BUSINESS AND TOURISM BOARD MANAGING DIRECTOR INTERNATIONAL (WESTERN HEMISPHERE) MARKETING BUSINESS EVENTS INTERNATIONAL (EASTERN HEMISPHERE) CORPORATE SERVICES STRATEGY AND RESEARCH CORPORATE COMMUNICATIONS PEOPLE AND CULTURE The above diagram is a simplistic organisation structure to illustrate the executive level proposed for the business events division.
13 ALLOCATION OF $25M P.A. FUNDING BECA s pre-budget submission provides general examples and suggestions as to strategies which might be adopted in developing a TA marketing plan for the business sector (refer pages 31/32). Government has asked for a more detailed suggested plan of expenditure which this supplementary paper provides. As background, it is useful to show the different relative roles played by the Australian Government through Tourism Australia, the state convention bureaux, and private industry. The following charts provide estimates for the purpose of comparisons of these respective roles. Tourism Australia: Recommended BE Marketing Mix 5% 20% Bids/Assistance Branding 0% 10% 5% 60% Delegate Boosting Research Sales Targeted marketing Footnote to TA BE Marketing Mix pie chart above: Based on proposed $25 million per annum budget.
14 Convention Bureaux: Estimated Current BE Marketing Mix Bids/Assistance 30% 30% 10% Branding Delegate Boosting Research Sales Targeted marketing 20% 5% 5% Industry: Estimated Current BE Marketing Mix 15% Bids/Assistance 35% 5% 5% 10% Branding Delegate Boosting Research Sales Targeting marketing 30% Footnote to Bureau and Industry pie charts: Total convention bureaux spend in estimated at $23.7 million (including industry co-op marketing), the majority of which was allocated to international marketing. In addition, the eight major convention centres estimated to spend a further $14 million on international marketing. These figures do not include direct spend by other industry suppliers such as hotels, DMCs and PCOs.
15 TOURISM AUSTRALIA S BUSINESS EVENTS BUDGET SAMPLE ALLOCATION OF PROPOSED $25 MILLION BUDGET FOR TA S BUSINESS EVENTS DIVISION, YEAR 1 Function Percentage Budget Marketing Elements Activities examples Branding 60% $15m Develop Business Events Australia brand/logo/materials and launch in first year Advertising PR Website Ambassador program Industry buy-in/coop Target Marketing 20% $5m Trade Events Famils Education/roadshows Direct mail/emarketing campaigns Domestic campaigns Joint ventures with relevant bodies eg Austrade, Invest Aust Leveraging major events for future BE business, eg major sporting events, APEC Support creation new int l business events Launch at key trade shows with improved trade booth, including Australian show (AIME) to embrace Australian industry and int l hosted buyers New handout materials Advertising in int l business and trade magazines, on-line ads in target market VJP famils for PR Update website, on-line BE newsletter Extend current Conventions Australia campaign using Ambassadors both from association and corporate markets Offer bureaux and industry opportunities for joint marketing EIBTM, ITME, IMEX, IT&CMA, AIME, MPI Target market famils for corporate and association markets Dreamtime, TABEE, educationals in North America (with G DAY USA) and Europe Broad-based domestic motivational campaign to corp and assoc n decision makers & influencers for int l business Support scheme to encourage start-up of new international events Encouragement of national associations and corporates to expand current meetings to Asia Pacific events
16 Bids assistance 5% $1.25m Australian Government support for bureau-led bids Sales 0% Nil Direct sales done at bureau and industry level Delegate boosting 5% $1.25m Promotional materials Specific events Assistance scheme TA calendar of events on website Research 10% $2.5m Market Intelligence Statistical gathering Database of targets Specific research projects to dovetail into campaigns TOTAL 100% $25m Appropriate letters of supports from Government Ministers Central contact for assistance with key Government departments Financial assistance scheme for associations Identification of bid leads using overseas offices such as DFAT, Austrade, Ambassadors (TA to distribute leads) Complimentary Australian promo collateral to event organisers and DMCs TA staff assistance at pre-event major conferences held overseas Promotional financial assistance scheme, eg for printing and distribution and travel to promote specific events Advertising to drive potential delegates to website calendar with hot links to specific BEs BE Market briefs to Australian industry online and roadshow NBES (National Business Events Study) updated research Ongoing development of national database from targeted campaigns Corporate end user and Incentive House research campaigns to identify sales leads for follow up and conversion by the Bureaux and their industry partners
17 Each area and activity determined in the marketing plan would have its own specific objectives and KPIs. It should be noted that the business events market is highly measurable and trackable. This is a division which can and should be highly accountable for its results. Many activities have cooperative potential with industry partners to boost funding and maximise the impact. INDUSTRY CONSULTATION Given how closely Government and industry must work together to win BE business and maximise our market share, it is critical that that the new Division and industry consult and have an ongoing dialogue about strategy development and implementation. Furthermore, BECA commits that members of the industry would work together in partnerships and joint ventures with government to implement many of the initiatives outlined above. BECA recommends that: There should be a formal consultation mechanism between the new Division and the industry via BECA. This should be documented in an agreement which sets out roles, responsibilities and accountabilities. The Business Events market has enormous potential for Australia, locally and internationally. This proposal suggests a structure and funding that will allow the industry to work collaboratively with Tourism Australia to exploit that potential; to realise the economic benefits of positioning Australia as a highly successful Business Events destination; and to assist Australia regain its competitive edge.
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