Challenge, change in the business events industry

March 30, 2020


With physical events set to remain on hold for some time, more businesses are using video tools for meetups and meetings and finding new ways to connect without summits and conferences.

The question is whether people will return to face-to-face events even when it’s safe to do so?

The Events Industry Council values the global MICE (meetings, incentives, conferences, exhibitions) sector at more than $1 trillion and estimates that, due to the pandemic, about 23 percent of the market has disappeared. Since the onset of the pandemic, hundreds of events have been canceled worldwide. Microsoft has suspended all live events until July 2021, and Facebook canceled gatherings of more than 50 people until June 2021.

According to an April survey from Global DMC Partners, a global network of independently owned destination management companies, 64 percent of 374 respondents from the United States, Europe and Canada predict they will resume live events between August and January.

For a glimpse into the future, Global DMC Partners asked what new initiatives will be added to live programs. Not surprisingly, the vast majority (90 percent) cited hand-sanitizer stations, social-distancing restrictions (79 percent), fewer attendees (61 percent), and eliminating buffets in favor of plated or boxed meals (66 percent).

Other new practices include using hotels, venues and event vendors with verifiable sanitation processes (60 percent), requiring face masks (40 percent) and temperature checks (34 percent), and providing medical and Personal Protective Equipment to staff (28 percent). More than 51 percent said they will offer a virtual alternative to live events. Twenty-three percent said they will have programs closer to home to eliminate international travel. Eleven percent responded they are considering ground transportation changes and 5 percent are looking into charter flights.

In these unprecedented times, event organizers must reconsider their options and balance two priorities: On the one hand, it is crucial to uphold the health and safety of staff, sponsors and attendees, yet it also is necessary to meet financial obligations by minimizing losses caused by disruption and maintaining cash flow.

Acknowledging the gravity of the situation is not the same as underestimating the value of events that are, after all, spaces where high-level debates take place and fruitful professional relationships can be forged, says Dimitrios Zarikos, regional vice president and general manager at Four Seasons Hotel Cairo at Nile Plaza.

Many events likely will resume while abiding by government guidelines, but given the massive costs involved in travel and attendance for such conferences and the capacity for online tools to replicate the experience, the event industry may have changed forever as a result of COVID-19, says Zarikos.

“It is very possible that we will get to see a group of 200 people from different countries attending a major conference on video,” he says. “People who were supposed to fly in for an event can now simply join virtually.”

The MICE business represents 15-20 percent of total revenue at Four Seasons, says Zarikos, adding the majority is government booked. Egyptian and GCC corporations also are active, with the banking and finance sectors sealing the most deals.

Hope-studded future

The World Travel and Tourism Council (WTTC) on June 1 unveiled the second phase of measures to rebuild consumer confidence in travel. Measures announced include: “physical distancing for seating distribution and aisles, utilizing available government guidance, creating visual support to show intent as appropriate, reducing venue capacity limits for participants as appropriate and required by local legislation, distinguishing between different areas of risk in the venue, considering pre-arrival risk assessment questionnaires for participants, limiting physical interaction and possible queuing at reception and registrations, and using advance registration to enhance participant flow, as well as creating isolation units outside the venue where possible for those showing COVID-19 symptoms,” according to WTTC.

However, Zarikos points out that social distancing and other measures mentioned go against the concept of coming together to network at an event.

“You can not shake hands, you can not even see the other person speak from the mask,” he says. “We are human beings who crave social and physical interactions by nature. If this is taken away from us, will we actually make the effort to travel for hours with masks and gloves on just to get into a meeting room where strict social distancing rules apply?”

Zoom and Microsoft Teams have been the go-to substitutes for face-to-face gatherings, and local and multinational companies are making important long-term decisions online.

“We realized that there is no reason to gather for every single detail and, actually, we will be able to reach more people that way when it comes to large meetings, events and conferences, as we cut costs and time wasted on Cairo commutes,” says Zarikos notes.

Nothing can replace meeting people in-person, he adds, but depending on the goals in attending such events, people may rethink their approach.

Substitute vs. complement?

The World Tourism Organization (UNWTO) says in its global report on the meetings industry that 20 percent of people who travel worldwide do so for business. The meetings industry plays a leading role in the growth of the world economy and is key to improving understanding and relations among different regions and cultures.

So if events are invaluable, what is next for the MICE industry? Are there any best practices to cope with large-scale disruption? At this critical junction, learning to navigate the situation requires extensive planning and the willingness to adapt quickly, according to Moataz Sedky, general manager of Travco Holidays Egypt.

“Now is an opportunity for us to reset and reinvent our businesses,” he says, explaining that a Lego Strategy could follow for the MICE industry where businesses realign pieces in a new way.

Could it be about hybrid or virtual events, where some people are present in-person and others attend online? Could you be walking through a virtual reality version of a convention center, stopping into a virtual, real-time meeting with presenters? We’ll know soon, Sedky says. “All it takes is getting the infrastructure right and following a solid plan,” he says. “There are a lot of creative wheels spinning right now and we’ll see what develops.”

Hybrid events combine live in-person and remote attendance, so they eliminate many barriers. This type of online event may suit seminars, lectures, conferences, and training workshops, according to Congrex, a leading association management firm and professional conference organizer. Hybrid events are an option in certain areas as long as the number of face-to-face participants is in line with local regulations. In the current environment, hosting a hybrid event could be the best way of covering all bases if an event is still a few months away.

“In these uncertain times, every event planner should develop a backup plan, and hybrid events may fit the bill,” the firm notes.

What we know is that virtual events cannot replace face-to-face events. Virtual components can enhance events and there will be adjustments made to existing events to make them virtually compatible in the short term. Sedky adds the industry should have a clear post-COVID-19 strategy and put out dedicated, well-structured packages, not just “rush in” once the pandemic is over.

Among the benefits of virtual events is the ability to manage the participation of those more interested in certain kinds of events, show an avant-garde image and reduce costs such as airfare and accommodations, said Maged Fawzy, chairperson of the Chamber of Hotel Establishments, to Al-Ahram last month. On the other hand, he says, virtual events could represent a significant loss of jobs.

Event organizers provide work for architects, designers, florists, light and sound crews, press, caterers, airlines, travel agencies, and many others, said Fawzy. The atmosphere at a face-to-face event generates better communication and strengthens relationships.

“We should not do everything virtually,” said Fawzy. “Let’s postpone and not cancel events that mostly need personal interaction so the MICE industry can move forward.”

The Nile Ritz-Carlton’s MICE business has been directly hit by cancellations due to COVID-19.

“There are still a few bookings that are postponed to the last quarter that hopefully will be confirmed this summer,” says General Manager Joe Ghayad. MICE represents about a quarter of the hotel’s revenues.

As per the Ritz-Carlton cancellation protocol, the hotel either refunds the total payment or postpones the booking.

During these times, the hotel will continue focusing on the local market and targeting different segments as it uses the slow period to revamp areas on the property. Ghayad expects the entire structure of running the business to change.

“There will be new industries and techniques that support new methods of running the business, yet the impact and actual decline figures for MICE are still under study,” says Ghayad, adding he foresees more virtual meetings and conferences taking place into early 2021. “We are positive that MICE will be back gradually as we continue emphasizing ‘we will travel again.’”

Rising to the challenges

Professional events have several key functions. They bring brand awareness and revenue for the organizer, share up-to-date information, and provide opportunities for networking. For a long time, face-to-face meetings seemed the best way of achieving this, and resistance to adopting new meeting formats mainly came from not knowing how alternative formats could fulfill these objectives, according to Congrex.

As technology evolves, virtual and hybrid events prove they can fill in the gap left by large-scale cancellations and other restrictions. Not only that, but they also offer some substantial advantages.

“Virtual and hybrid events can be highly profitable since they partly or wholly eliminate the need for venue rental, certain types of insurance, and additional services like staffing and catering,” Congrex notes. Therefore, they can help organizers reduce expenses and operational costs. Moreover, in-person meetings entail geographic and travel constraints that may prevent some prospective participants from attending.

Additionally, the technology used to deliver online events has built-in capabilities that allow organizers to measure success in real-time. Such data can be used to make changes and gauge the audience’s reaction. In short, online event tech facilitates continuous improvement both during and after the event, the association says on its website.

“Switching to virtual events may be easier than it appears,” Zarikos says. “These events rely on mediums and formats that are already familiar, as we are conducting an increasing number of activities and interactions online nowadays.” He adds that in the majority of cases, the audience previously will have attended some sort of online events, such as webinars or live-streamed training courses.

Sedky shares that sentiment and agrees the adaptation process is minimal. Having established the crucial benefits of virtual and hybrid events, it is now time to dig into the different meeting models available, he adds.

A central question for event planners and organizers is whether all events can be delivered remotely, Congrex notes: “With the current technology, anything from scientific sessions to workshops and exhibitions can be delivered virtually. The specific format will vary, but there are five types of online events. These differ from each other in terms of location and interaction levels.”

They include centralized broadcasting from a single location and no interaction with the audience; centralized broadcasting from a single location with full audience interaction; centralized broadcasting from a single location with limited interaction with the audience (only a specific number of attendees can interact); broadcasting from multiple locations and no interaction with the audience; and broadcasting from multiple locations with multiple audience interactions.

According to Congrex, each format requires a different strategy to guarantee optimal delivery and engagement. However, some practical and technical considerations are applicable to all types of virtual eventsSedky says, such as the specific technologies and platforms to be used.

“Areas to consider are the bandwidth needed to support smooth delivery and participation, the interaction model to follow if Q&A sessions are planned, tools needed to facilitate networking, how will the event be marketed and monetized, how will engagement metrics be measured and how feedback from attendees will be collected,” he explains.

Irrespective of the event type, all planning should be geared toward boosting interaction and supporting virtual infrastructure.

“Do not overlook the social aspect of meetings,” Congrex notes. “Remember that virtual meetings should fulfill two critical functions: circulating information and providing a space for professionals to network. This means that an online event still requires introductions, ice breakers, and virtual watercooler or coffee break sessions.”

Don’t lose faith

In the MICE business, unscripted moments are when the magic happens during events, where ideas are formulated, business deals closed and new connections made. It all happens during conversations after the plenary session, while networking over dinner and even sharing a ride to the airport after the business event.

Tourism, which peaks between April and September, presents a major source of foreign exchange. Many tour operators likely will face bankruptcy as a consequence of canceled major public events, Andrew McCorkell wrote in the March issue of Conference and Incentive Travel Magazine.

The International Air Transport Association (IATA) estimates total losses to the industry could reach $29 billion. Central banking institutions, including the U.S. Federal Reserve, have announced monetary policy changes in a bid to improve access to credit for small- and medium-sized enterprises. The Organisation for Economic Co-operation and Development predicts that global GDP growth could slow to 2.4 percent in 2020, down from 2.9 percent last year.

“The event industry should be doing everything in its power to persuade clients not to cancel travel incentives, meetings, and events. Instead, MICE businesses should encourage a wait-and-see attitude, work with suppliers and partners to honor deposits paid for use on future dates, check future availability and work on moving programs and events to 6 or 9 months from now,” Huw Tuckett, executive director of Euromic, a nonprofit marketing association of 52 of the world’s leading Destination Management Companies (DMC), wrote in an open letter to Kongres Magazine.

“My message to the MICE industry – whether you are the hotel, supplier, event planner, end client or the DMC providing the program – is to communicate with your clients. Sell the benefits of traveling at a later stage, focus on the positives, offer more time to plan, and more time to research, and make programs better. Why not highlight the fact that buyers will soon have tremendous buying power if they are willing to commit to future operations? Discounts will be found everywhere instead of incurring cancellations fees that in reality are a lose-lose situation.”

Our mindset should be one of how we make our programs happen, rather than just accepting cancellations never to be seen again, he wrote