The Eureka moment: MICE, weddings are the future
There is nothing more deceptive than an obvious fact.
– Arthur Conan Doyle
While the above quote applies to all aspects of life, it is perhaps best exemplified in the hospitality industry. The industry that’s driven by customer expectations, new emerging technologies and is strongly influenced by events and trends that have always been in a constant state of change/evolution, though the scale is now faster than ever before.
Among the various segments within the industry, MICE (Meetings, Incentives, Conferences, Exhibitions) is globally considered as one of its key market segments and an important contributor to national economies, through income and employment generation directly and indirectly in related hospitality services. As a year-round business prospect, this segment also offsets seasonal tourism challenges and provides additional avenues for domestic tourism and leisure travel, expenditure.
The global MICE industry size was valued at $805 billion in 2017 and is estimated to reach $1,337.4 billion by 2028, registering a CAGR of 21.3 per cent from 2021 to 2028. (ref)
As per a 2019 report on MICE Market in India¹, the estimated market size of MICE in India was Rs 37,576 crore in which nearly 60 per cent came from MIC ie meetings, incentives and conferences. The estimated market size from events/ exhibitions is reported to be in the tune of Rs 4,800 crore from space rental with a multiplier impact to economy in terms of accommodation, traveling, communication, advertisement, remuneration to skilled work force etc.
Weddings are also a major industry in India with ‘The Big Fat Indian Wedding’ known across the world for the destinations, the extravagantly designed and planned venues and the scale of events. Though largely an unorganised sector, a report by KPMG in 2016, estimates Indian wedding industry worth Rs 3.68 trillion and growing steadily.
India, therefore, has a wide portfolio of offerings, with its geographical and cultural diversity leading to greater potential for positioning as a MICE and Wedding destination. In addition, there is also robust demand in India across industries, including the growth in medical tourism sector as estimated to increase at a CAGR of 21.1 per cent from 2020-27, and the travel market to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20.
This, however, is not new information and has been a repeatedly stated fact. Isn’t it funny therefore, how the obvious and oblivious are so close? Traditionally, larger brands had consciously shunned away from the Band-Baaja-Baraat business citing exclusiveness and privacy for their high paying guests. The past two years however, have altered the course and method of doing business, resulting in brands now ‘rediscovering’ the potential of this segment and reinforcing it as an essential aspect of product formulation and owner investments, while continuing with their ‘asset-light’ growth strategy for speed and scale. Leading cities for MICE events have so far mostly been key metros but Tier II and Tier III locations are also fast catching up.
The pandemic had a major impact on the global travel, hospitality, MICE and Wedding industry and India was no different. Strict lockdowns led to partial or complete ban on travel and closed borders, resulting in shutdown of businesses and challenge to livelihoods. As per an industry survey² done at 160 hotels across India, more than 60 per cent of hotels shut down temporarily in the first two months of the pandemic, with only those serving essential services operating. While a majority resumed operations after July 2020, continued restrictions on gathering numbers/ capacity further impacted business and in particular MICE, Wedding segment.
One of the greatest impacts of the pandemic across segments was the accelerated pace of digital transformation. Convergence of online and offline has perhaps never been greater than in the past few years. While the trend of moving smaller gatherings to virtual spaces started rising occasionally, the demand for ‘hybrid and virtual’ events skyrocketed due to the pandemic. Digital/ online platforms were used extensively by companies, to stay connected, operate businesses and over time also to conduct MICE events that were cost effective. What started as a necessity is likely to continue in the long term on account of the flexibility, cost effectiveness and larger outreach this mode offers, thereby greatly impacting the MICE industry.
As the Covid19 crisis appears to ebb, with a rapid decline in cases, the hospitality, MICE and Wedding industry is on the path to recovery with hotel brands rapidly expanding their presence, even in newer locations (Tier III cities), in-person conferences and tradeshows witnessing large turnouts and weddings/ banquet venues have started registering record growths.
The global landscape for the MICE and Wedding industry continues to evolve and get more competitive. In order to optimise opportunities in the industry in India and improve positioning on the global scale, there is a need for a more focussed approach in development, investments, process and service standardisation for every touchpoint of MICE/ Weddings.
However, while we work towards getting ‘back to business’ and regaining business profitability, with the increasing demand and approaching festive season, it is important that the circumstances, challenges and learnings from the past two years propel us to revisit and reimagine our product development/formulations and investment strategies, so as to ensure that desires of the ever-evolving ‘business of profit’ do not lead to the large ‘investments and owners’ suffering, i.e. more than ever before, now is the time to ‘Invest Wisely’.
