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The National Business Events Study: Australia

By Dr Margaret Deery
Dr Leo Jago
Tourism and Business Events International Pty Ltd

 

The Business Events industry – previously known as the meetings, incentives, conventions and exhibition sector (MICE) – is generally regarded as one of the highest yielding tourism segments because of the high per-delegate spend.  The Australian government regards business events as an important industry because of the contribution it makes to the Australian economy and yet, until 1999, no substantial data had been collected to verify its importance.

 

Context for the Study

 

In 1999, Australia’s Bureau of Tourism Research’s (BTR) study, Meetings Make their Mark, undertook the first major study on the business events industry in Australia.. As stated in the foreword of the BTR study,

“The results [of this study] provide the industry with the first independent, nationally consistent statistics on the size and economic worth of the meetings and exhibition sector.” (Johnson, Foo and O’Halloran, 1999 p. iii).

Whilst the BTR study provided the Business Events industry with an estimate of its value, the study did not cover all areas of the industry and was thus not seen to fully reflect the value of the industry. In the conclusion of the BTR study, it was suggested that similar research be undertaken to update the findings every few years. A study by the Australian Bureau of Statistics on the Business Events Venue Industry (ABS, 2002, p.3) looked at the size and scope of the Venues Industry. This study, however, only investigated the large end of the industry using venues capable of hosting at least 500 delegates. Only 121 venues were included in the ABS study.

Following discussions with key Business Events participants, the need to update the BTR study in a more comprehensive fashion was identified. A steering committee for an updated study entitled the National Business Events Study (NBES) was established to guide the national project and comprised representatives from Australian Tourist Commission (now Tourism Australia), the Business Events Council of Australia (BECA), the Bureau of Tourism Research (BTR), the Australian Association of Convention Bureau (AACB), Tourism Queensland, Melbourne Convention and Visitors Bureau, the Gold Coast Convention Bureau, Sustainable Tourism CRC (STCRC) and Victoria University (VU).

The STCRC provided substantial funding for the project using one of its partner universities, Victoria University, to provide the day-to-day operation of the project on behalf of STCRC. In order to operationalise the project and to engage with the stakeholders around the country, a number of STCRC Research Nodes were established. These were formed in different regions and included a Convention Bureau representative, an industry representative and an STCRC researcher who acted as the facilitator for the data collection in each state and territory. This structure enhanced the study by developing strong relationships between the industry sector and the researchers involved.

 

The Study

 

The Australian Business Events industry, therefore, embarked on a major study in 2003 to provide an estimate of the events sector in relation to its size, economic contribution and to provide increased knowledge on the decision-making processes of delegates/attendees in the Business Events Sector. It also aimed to provide key indicators for monitoring the performance of the Business Events Sector in subsequent years. The NBES was conducted over a two-year period commencing in 2003. One of the first activities for the steering committee was to actually define what a business event was and the following definition was the basis for data collection of business events:

 

‘Any public or private activity consisting of a minimum of 15 persons with a common interest of vocation, held in a specific venue or venues, and hosted by an organisation (or organisations). This may include (but not be limited to): conferences, conventions, symposia, congresses, incentive meetings, marketing events, special celebrations, seminars, courses, public or trade shows, exhibitions, company general meetings, corporate retreats, training programs. (BECA 2002)’

 

In order to make the NBES as comprehensive as possible, an effort was made to cover all of the key components of the Business Events Industry. This included conferences and conventions, corporate meetings, and exhibitions. Sectoral insights were gained from various industry participants, including venue managers, meeting and convention delegates, conference organisers, exhibitors, exhibition organisers, trade visitors and the incentive travel sector.

 

The study collected data from a number of sources through online surveys and hard copy questionnaires. The questionnaires were designed by the Steering Committee with additional advise from various industry and government experts in the areas. Many of the questionnaires were placed on the web for on-line completion. On advice from the industry experts, some questionnaires remained in hard copy and were either mailed or faxed to the potential respondent. In particular, on-line distribution of the delegate, trade visitor, exhibitor and venue questionnaire was a cost effective means of maximising reach to large groups of potential respondents. Other questionnaires such as the incentive travel and the organiser surveys were faxed, emailed or mailed. Overall, the following data were collected from the various segments of the Australian Business Events industry:

  • Venues                                                         531
  • Convention delegates                                  6,723
  • Meeting and conference organisers                 161
  • Exhibitors                                                     843
  • Incentive travel                                                51

 

As with most research undertakings, there were limitations to the ways in which the study could be implemented. Such was the case with the NBES and the limitations of the study are outlined below.

  • The timing of the data collection period coincided with the aftermath of world events such as September 11 in 2001, the global SARs outbreak and the bombing in Bali 2002. As a consequence of these events, the data collected represented a travel industry at it lowest ebb and the findings must be seen in light of the data collection period.
  • The reluctance of certain parts of the Business Events industry to respond to the study meant that the duration of the study had to be extended to ensure that sufficient data were obtained in order for the results to be representative of the industry. This problem was particularly evident with the venues.
  • The lack of reliable data on which to base sampling estimates also created problems in that the original estimates were somewhat larger than was either realistic to obtain or reflected the true size of the industry.

 

Findings           

 

A number of important findings were made about the various components of the Australian Business Events industry and these findings have been used substantially to show the value of the industry and its importance to the economy. Specifically, the key findings included that the total number of business events in Australia was 316,000 events, while the total number of business events participants was 22.8 million. These figures included

  • 19.9 million meeting and conference delegates
  • 2.4 million trade visitors
  • 256,000 exhibitors
  • 274,000 incentive delegates

The total expenditure for 2003 in the Business Events Industry was $17.3 billion which included:

  • $11.5 billion from meetings and convention delegates
  • $2.4 billion from meeting organisers
  • $2.3 billion from exhibitors
  • $540 million from trade visitors
  • $585 million from incentive organisers

The figure of $17.3 billion was a substantial increase on the previous assessment of the industry of just over $11billion and the international expenditure of $1.86 billion in 2003 also showed an increase in expenditure. With regard to the average expenditure for international meeting and conference delegates, it was found that these delegates spent $3,526 per delegate total trip or $554 per day. Delegates were found to spend:

  • 24% on conference registration
  • 29% on accommodation
  • 13% on shopping
  • 15% on ground transport and airfares within Australia
  • 11% on restaurants
  • 3% on theatres, cinemas
  • 6% on tours

The study also found that the industry contributed substantially to employment with a direct contribution to employment by Business Events of 116,000 jobs, indirect contribution to employment of 98,000 jobs and the contribution to total employment in Australia of 214,000 jobs. So what does all this mean for the Australian Business Events industry?

 

Implications and recommendations from the NBES

As the NBES was seen to be both comprehensive and credible, the key results that were produced particularly in relation to the expenditure generated and jobs created made government take note. Seeing the magnitude of the contribution that Business Events made to the economy made the government much more supportive of industry. Although the study was published in 2005 based on data relating to 2003 and 2004, the results are still quoted as being the most encompassing evaluation of the Australian Business Events industry. In addition, the rigorous method used in the study led to an invitation by the UNWTO to the project team to lead a similar project, but this time examining the global meetings industry.  The completed UNWTO project developed a framework and methodology for evaluating the global meetings industry and this method has been piloted in in a number countries. This framework has been used to underpin national studies to assess the economic contribution that business events make to the economy in Canada, USA, Mexico, Denmark and UK.

One of biggest challenges in the NBES was in determining the total population of venues that host business events that could be used to create a sampling frame. Venues play a critical role in these studies as they provide estimates for the number of events that are staged within a year and the number of delegates that attend these events. These variables are crucial for estimating the expenditure generated. Getting estimates of event and delegate numbers from a representative sample of venues was very difficult. Many venues either did not keep adequate records on these details or were reluctant to spend the time to extract the data. Many follow ups and offers of assistance were made in order to obtain sufficient data.

 

In order to facilitate the collection of data from venues, the NBES recommended that:

‘A template should be devised and distributed to venues that would facilitate their on-going collection and recording of data relevant to assessing the overall size of the sector. This would overcome the problem of having to trawl back through records in order to complete the questionnaire.’

This recommendation was acted upon after the NBES and an electronic means of uploading, collating and analysing business event data from the front office systems of business event venues was developed. This was called the Business Events Venue Performance (BEVP) project that was successfully piloted with Australia’s convention centres. BEVP provided monthly reports on the number of events, types, duration and number of delegates attending business events in convention centres. Efforts were made to roll out the project to the key hotels hosting business events but there was insufficient support from the hotels for this important extension of the project to succeed.

Finally, it was recommended that regular updates of the NBES be undertaken so that the Business Events industry would be able to monitor its development. As these studies are so expensive to undertake, an update version of NBES has not yet been done even though the NBES is based on data that are 10 years old. An application to the Australian Government for  funds to match an industry contribution to undertake a smaller version of the NBES looks likely to be approved. This will provide some updated estimates on the contribution of the industry.

Whilst these studies are very important to provide estimates of the economic contribution that business events make, they understate the true value of the industry. These studies are based on the tourism contribution of the industry revolving largely around the expenditure made by delegates. As business events play very important roles in the creation and dissemination of knowledge, it is critical that recognition be given to these ‘beyond tourism’ contributions that help ensure that the economy is innovative. Much work is needed to incorporate these beyond tourism dimensions into the evaluation of business events.

 

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