About Business Events
What is a Business Event?
BECA defines a business event as:
any public or private activity consisting of a minimum of 15 persons with a common interest or vocation, held in a specific venue or venues, and hosted by an organisation (or organisations). This may include (but not limited to): conferences, conventions, symposia, congresses, incentive group events, marketing events, special celebrations, seminar, courses, public or trade shows, product launches, exhibitions, company general meetings, corporate retreats, study tours or training programs.
The demand for a business event is driven mainly by organisations choosing it as a forum to communicate messages, to educate or train, to promote a product, to reward or celebrate, to collaborate on issues and solutions, or to generate resources.
Types of business events
Business events are generally made up of meetings, incentives, conventions and exhibitions.
- Meetings: Meetings and Events Australia (MEA), a member of BECA, has characterised meetings as comprising of:
- off-site gatherings in a commercial venue;
- more than 15 persons; and
- with a common purpose.
- Incentives: These refer to programs which are attended by ‘high achievers' to recognise and further motivate participants for their performance within the organisation (TA, 2005). Incentives are also used to introduce new products and services to key players.
- Conventions: Also referred to as conferences, conventions are a large assembly of participants, often several thousand, with many international visitors. Most conventions will have some form of exhibition attached.
- Exhibitions: Exhibition events are the gathering of suppliers to display their product and services for trade and public exhibition purposes (Deery et al, 2005, p 59).
What is the economic benefit of business events to Australia?
$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 purchased from: http://www.crctourism.com.au/CRCBookshop/page.aspx?page_id=2&productID=382)
The executive summary of the report can be downloaded from this site at no charge.
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
*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
*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.
There is an important connection between Business Events and Leisure Tourism ......
Business events are considered to be part of the tourism industry because of their potential to attract international visitors to Australia (both delegates and accompanying persons) and to extend their stay beyond the BE. The infrastructure and services used by BE delegates are also used by the leisure tourist.
While BE and leisure tourism are complementary in this respect, marketing approaches for the two segments have to be approached differently. While the general awareness of Australia created by a leisure tourism marketing campaign is useful, it is not in any way sufficient to "cut through" to generate BE business.
Having portrayed this, it is important to understand that (in BECA's well researched view), the two areas must be separated for marketing purposes
There is a very important distinction between business events visitors and leisure visitors. Too often there is the perception that business events are a ‘category' of leisure tourism.
The differentiation between the two stems from two fundamental principles:
- selection of a holiday destination is markedly different from the selection of a destination to hold and attend a business event.
- the decision to travel for leisure is taken in a totally different context and by a different "person" than that for a business event.
Leisure tourism motivator
Leisure visitors are primarily motivated to travel because of the opportunity to explore other cultures, to experience freedom and personal growth, and to visit family and friends (TA, 2006, pp 4-5).
Business Event motivator
On the other hand, the principal motivator to attend a business event is the business activity itself rather than the desire to travel for pleasure. Whilst tourism may be a consequence of the event, there is no overriding tourism objective.
There are two aspects to the ‘selection process' of a business event:
- event organisers (decision-makers of holding the event) - are predominantly motivated by the suitability of the venue, a strong local host association and the range of venues, accommodation and transport facilities in the city; and
- delegates (attendees to the event) - are primarily influenced by the content of the business program as well as the networking opportunities, location and accessibility of the venue (Deery et al, 2005, pp 33, 51).
This focus on the business of the event therefore has implications for tourism strategy planning and the government's approach to promoting business events in Australia