MICE market recovery to benefit Cebu

CEBU, Philippines — Cebu is poised to experience significant advantages with the robust resurgence of the MICE (meetings, incentives, conferences, and exhibits) market in the Philippines. Anticipated to gain momentum from this year onward, both small and large in-person events are expected to witness an upswing, contributing to the overall growth in the province, especially the tourism sector.

“We are now seeing more in-person events organized by property firms, manpower agencies, pharmaceutical companies, and travel agencies, and these have been raising the demand for convention centers, function rooms, and similar facilities,” said Colliers Philippines director for research Joey Roi Bondoc.

In a statement furnished to The Freeman, Colliers recommended that hotel developers and operators should assess the future demand for MICE facilities given the segment’s potential for a strong rebound.

 Tied to this is the Department of Tourism’s thrust of priming the Philippines as a major MICE destination, and this should enable the country to corner major global MICE events and further boost tourist arrivals and spending across the archipelago, Bondoc said.

“Developing large convention centers near the newly modernized and expanded airports should also be explored by property firms,” Bondoc added.

Colliers believes that the need for MICE facilities will only expand moving forward. “This is particularly true for Filipinos who value social interaction. Improving business sentiment and further expansion of local businesses also compel developers to mount more networking events.”  

Aside from Metro  Manila, Colliers expressed optimism that other localities likely to corner major events include Clark in Pampanga, Cebu, Davao, and Iloilo. 

Despite headwinds, hoteliers continued to enjoy robust levels of activity over the last quarters. However, with travel and accommodation pricing remaining strong, combined with a tapering off of pent-up demand and inflation eating into savings, growth has started to slow and, in some cases, even peaked.

In addition to the resurgence of the once-thriving leisure market segment, there is a notable and robust comeback. Colliers said it seems evident that the human craving for social in-person interaction surpasses the somewhat impersonal nature of technology-mediated communication.

According to a report published by Allied Research, the Asia Pacific MICE industry is expected to grow by a compound annual growth rate (CAGR) of 8.6 percent to 2025, reaching some USD 441.1 billion.

This bodes well for a sector that was largely marginalized over the last two years but, as with the hotel industry, has forced the sector to re-invent itself. Improvements in infrastructure, the ability to host hybrid events, hence reaching larger audiences at a lower cost, and the increasing trend of ‘bleisure’ means that MICE facilities can look forward to becoming a more profitable venture. Bleisure refers to a trip that combines business and pleasure, and most often bleisure travelers add extra days to their trip to unwind.

Traditionally, especially for large purpose-built venues, the return on investment was limited to the perceived economic benefit through the multiplier effect. As such, most of the stand-alone facilities were government funded, however as funding has dried up, the question is how can this segment become attractive to the private sector across Asia Pacific?

“We anticipate that the demand for MICE across Asia Pacific will continue to grow apace as connectivity and per capita income continues to grow across the region. China and Japan are expected to remain the largest markets, followed by Hong Kong, Macau, Thailand and Singapore as we head into 2024 and beyond,” Bondoc noted.

“By 2030, we expect India to enter the ranks of one of the fastest-growing MICE markets driven mainly by domestic demand. Pricing and ease of access remain a key challenge for organizers, so expect those destinations that can offer both to recover first. Thailand and Malaysia springs to mind,” he said.

According to STR, a company of CoStar Group that provides market data on the hotel industry worldwide, hotels across the Asia Pacific witnessed a revenue per available room (RevPAR) increase of a whopping 53.6 percent at the end of June 2023, (in USD) compared to the same period in 2022, but this remained circa nine percent behind that of 2019 levels.

STR also highlighted that a lag in room occupancy levels, as China outbound remained relatively nascent, contributed to this drag. However, this was to the benefit of the Chinese domestic market which continued to thrive on the back of this. — (FREEMAN)