What is the economic benefit to Australia of business events?
$17.3 billion per annum !
In 2003 a combined effort of BECA members and Australia's Co-operative Research Centre for Sustainable Tourism produced the most comprehensive study ever undertaken into the business events sector in Australia.
The report entitled, The National Business Events Study (NBES) can be downlaoded through this link. NBES_-_Final_Report_April_05.pdf.
International v domestic business events in Australia
BE can be broken down into domestic and international components.
Domestic events refer to domestically run business activities with local and interstate delegates.
The following table provides some key statistics on the international and domestic parts of the BE industry.
Graphic 3 : International v domestic component
|Expenditure = $1.86 b
Contribution to value added = $638 m
Contribution to employment = 17,000
|Expenditure = $15.50 b
Contribution to value added = $5.50 b
Contribution to employment = 99,000
*Source: National Business Events Study
Although the domestic market is crucial to the success of the BE sector, BECA's position is that Australia's domestic sector is relatively static with limited potential for growth due to a small population size. Australian BE service providers will only continue to share the same market - they will take market share from one another but will not participate in any domestic market growth.
Thus, the real growth prospects lie in the international BE sector. This has the potential to create additional export dollars.
BECA advocates that priority be given to developing and promoting Australia as an international business events destination. The increase in international business events will provide high yield to local businesses and establish Australia as the destination of choice for business travellers and event organisers.
Contribution of the business events industry
On a number of measures, business events is the tourism industry's highest yielding sector given the level of expenditure (per day) of event delegates and the attraction of some 550,000 visitors each year.
Overall and including both direct and indirect effects, business events contributes 2% of value added in the Australian economy (Deery et al, 2005, p 99).
Total expenditure attributable to BE
The total expenditure attributable to the BE industry is approximately $17.3 billion per year with the largest expenditure items being registration fees ($7.55 billion), floor space ($2.41 billion), food and beverage ($2.16 billion) and accommodation ($1.53 billion) (Deery et al, 2005, p 87).
Contribution to "Value Add" and employment
The NBES notes two important measures of the economic significance of the BE sector - contribution to "value add" and employment.
The NBES estimates value add by the BE sector at $6.13 billion. The sector positively impacts on related and interdependent industries such as transport, restaurants and hotels, and retail.
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).
Comparison of expenditure by BE delegates and all other visitors
Data from the International Visitors Survey (IVS) prepared by Tourism Research Australia (TRA) and the NBES shows that delegates to business events clearly yield a greater rate of return than leisure tourists. In fact, international conference delegates can spend up to almost six times more (on an expenditure per day basis) than the leisure visitor and nearly 1½ times as much per trip.
Graphic 4: Average BE delegate expenditure v All Visitors expenditure
|Per Trip||Per Day|
*Source: National Business Events Study 2003; International Visitor Survey 2004
The comparison above highlights that on average, convention delegates spend far more per day than any other type of visitor.
This can be attributed to various factors including the fact that business events delegates tend to stay in up scale hotel accommodation and their employer often covers the costs of their travel.
Another element of BE visitation which must not be overlooked is the "pre and post touring" by visitors that often occurs by BE delegates and their families. This is a significant "flow on" effect from the BE segment.
Intangible contribution by the BE sector
As well as the significant expenditure and economic contribution made by the BE sector, business events also bring in significant indirect and intangible benefits to attendees and the host city or country.
Networking: Business events are essentially communication mediums - a place for delegates to network and enhance business relationships. As previously discussed, this opportunity to network is one of the main motives of why a delegate chooses to attend an event.
Education: The majority of international BE offer an education program, affording Australian delegates the opportunity to gain exposure to international learning in their own country and also to profile themselves before their international peers.
Trade: Many international BE include trade exhibitions and commercial sponsorships, which offer Australians trade exposure to the international market on their own territory. Study tours and satellite meetings offer the opportunity to showcase Australia's products and services pertinent to the specific host area.
Research: International scientific and professional meetings are prime drivers in exposing original research to the marketplace.
Leverage: Business events provide an ideal forum for leveraging existing exports such as mining, medicine, technology.
Funds: International meetings often provide Australian host not-for-profit organisations with an opportunity to raise funds which in turn allows them to improve delivery of services to their Australian members.
Prestige: Hosting a meeting in Australia in a specific trade, profession, or industry, allows that sector the chance to lift its profile in the international market, just as a meeting like APEC is a prestigious event for the Australian government. Intangible benefits flow from the dynamics of having the best in their field on Australian soil.
A "showcase opportunity": Business events provide an opportunity for the hosting country to showcase its infrastructure, innovation and quality of service. To the meeting organiser, suitability of the venue is a top priority and success will largely depend on the facilities and attraction of the location. Success of one event often leads to testimonials and word of mouth publicity within the market and more international events as a result.
Benefits to the leisure tourism sector: Leisure tourism is often a by-product of business events. That is, international business conventions can substantially raise the profile of a city and country and lead to prosperous
tourism growth. This is consistent with the results of the NBES which found that nearly 60% of overseas business event delegates would likely return within 2 years.
Regional dispersal: The NBES found 46% of international delegates surveyed took a pre or post event trip, and 25.7% brought accompanying persons. Dispersal throughout the country also occurs with satellite meetings, study tours, pre and post courses, in locations other than the main event destination. Cairns is a leading example of the potential of second tier regional centres to attract international events. The 2005 ICCA statistics show Cairns in 3rd position in Australia after Sydney and Melbourne.