Colombia looks to grow MICE business
09 DECEMBER 2013 8:58 AM
A recent trip to Colombia highlighted the country’s commitment to group and meetings business.
I haven’t written in a few months because of my heavy speaking and travel schedule, which was highlighted by a trip to Colombia for a three-day symposium on the meetings, incentives, conventions and exhibitions industry.
The first International Symposium for the Events and Conventions Industry was put on by COTELCO, Columbia’s Hotel and Tourism Association, and took place at the Plaza Mayor in the city of Medellin.
I was very pleasantly surprised to see firsthand Medellin’s impressive recovery from the urban wars and drug cartel reign of terror a decade ago, which saw as many as 10 murders a day, locals still missing today and a drop in population as others fled in exile. Instead I experienced a vibrant business climate, warm greetings and extended hospitality in all corners of the city—and, thanks to the local government, new infrastructure, housing and running water for so many previously displaced residents.
Why would Colombia’s hotel and tourism industry put on such an event? I discerned two reasons:
- Colombian hotels and MICE venues are realizing now the real value and future potential of MICE business; and
- the symposium afforded COTELCO an opportunity to showcase both its current and future MICE venues and its genuine interest in capturing a share of future hosted international MICE events.
MICE industry impact in the US
As one of two speakers from the United States, I was asked to present on the impact of the MICE industry in the U.S.—its size, economic impact, jobs created, hosting venues, and marketing strategies and tactics used to grow the segment, sourcing data from various industry sources as well as my own research.
MICE’s economic impact in the U.S.:
- contributes $458 billion to the U.S. gross domestic product;
- more than the automotive manufacturing and air transportation industries;
- $1 trillion in total economic activity;
- $263 billion in direct spending;
- $14.3 billion in federal tax revenue and $11.3 billion in state and local; and
- supports 1.7 million U.S. jobs.
U.S. hotel and event venues profile:
- 1.8 million meetings/events annually, comprising:
- 52% corporate/business meetings
- 25% “congresses” (conventions, conferences)
- 12% trade shows
- 4% incentives
- 7% others
- attended by 205 million people annually; and
- 250 million overnight stays annually.
Human capital value factor
U.S. MICE events have great human capital value as well:
- Participation in off-site MICE events makes employees feel more valued.
- Fortune 1000 chief marketing officers surveyed said business travel and MICE event participation produced the highest return on investment of any marketing channel.
- Non-cash incentives (trips/events) are two to three times more effective in motivating employee performance.
- Five-percent-plus employee retention can generate a 25% to 85% increase in corporation profitability.
- Face-to-face meetings/trips build trust, opportunities for bonding, networking and growth.
- Such events are critical for strategic planning, corporate development, creating culture, strengthening business relations, and educating employees and customers.
I shared with the 200-plus attendees the key strategies and tactics employed by U.S. hotels and destination marketing organizations in order to solicit and capture MICE events in a very competitive market place.
My closing recommendations included:
- tapping into hotel brands, third-party intermediaries, and hospitality sales and marketing consultants for advice, sales training and lead generation;
- establishing local chapters of Meeting Professionals International and Hospitality Sales & Marketing Association International; and
- becoming active members of International Congress & Convention Association and International Association of Exhibitions and Events.
Benchmarks bode well for Colombia as a global MICE player
According to a Jones Lang LaSalle report “Lodging industry in numbers – Colombia 2012,” Colombia is dominated by commercial demand given the increase in business activity and still-developing nature of the country as a tourist and group destination.
Future growth of MICE business in Colombia appears to be very good. Less than 10% of demand for Colombia hotel facilities today comes from the group side. That can be traced to the abundance of economy and limited-service hotels.
Bogota, with more than half of the country’s hotel room inventory, boasts several group-friendly hotels and high-capacity convention centers. Medellin’s Plaza Mayor convention center is an excellent venue featuring a great hall that accommodates 3,000 people theater style.
The benchmarks bode well for Colombia becoming more of a player in the global MICE arena. Several global chains such as Starwood Hotels & Resorts Worldwide and Hyatt Hotels Corporation have formed new viable partnerships with strategic local partners to develop properties ranging from luxury to upscale.
Development plans are driven by a number of factors, including Colombia’s strong economic outlook. It is the third most populous country in Latin America and among the 25 largest economies in the world. Colombia is on path to overtake Argentina in the next few years as the third largest economy in Latin America, with real GDP annual growth expected to be 3.7% in 2013 and 4.2% in 2014, according to the International Monetary Fund.
The country also boasts a newly acquired reputation as a business-friendly country. Some contributing factors, according to Jones Lang LaSalle:
- access to a large, hospitality-oriented labor pool;
- a 30-year hotel development/renovation tax exemption and other fiscal incentives;
- competitive free trade zones and a flat 15% income tax;
- shorter flight times from U.S. and Europe; and
- 1.6 million foreign arrivals in 2011.
Final memorable observations
A VIP tour of the entire city introduced us to Medellin’s modern Metropolitan rail transportation system and an elevated cable car system that takes passengers on breath-taking rides above the city to the top of the surrounding mountains and beyond. I saw new schools and a state-of-the-art library with a children-only room loaded with computers.
We embarked from cable cars for a walking tour of the infamous Santo Domingo neighborhood—the very place where 10 murders a day once occurred. I couldn’t help notice so many locals who lined the sidewalks staring at me. Granted, I stood out on the tour being non-Latino, over 6 feet tall, and with my all-white head of hair.
I asked one of the host committee members, “Are they looking at me?”
“They think you’re Bill Clinton,” he replied.
David M. Brudney (David@DavidBrudney.com, 760-476-0830) is a charter member of Laguna Strategic Advisors and was a founding member of the International Society of Hospitality Consultants. Brudney is a veteran sales-and-marketing professional concluding his fifth decade of service to the hospitality industry. Brudney advises lodging owners, lenders, asset managers and operators about hotel sales and marketing best practices and conducts reviews of sales-and-marketing operations throughout the world. Brudney is a professional speaker, teacher, mentor and sales trainer. His website is www.davidbrudney.com.
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