Japan has some ground to make up if it is to become a world leader in the MICE space, but the advent of IRs presents the perfect chance to ride the MICE wave to the top.
While much of the talk around Japanese IRs has up to this point focused primarily on problem gambling concerns, one aspect that is starting to gain traction is the opportunity IRs present to grow the country’s Meetings, Incentives, Conferences and Exhibitions (MICE) industry.
MICE facilities are located throughout the world and the average annual growth rate of the MICE industry (2017-2023) has been estimated at 7.5%. The market, at US$752 billion in 2016, is predicted to grow to US$1.25 trillion by 2023.
The construction of large event halls has continued apace each year and the number of halls with a floor space of 100,000 square meters or more now stands at 72 globally (as of March 2019). Unfortunately, no site in Japan is included on this list with the largest being Tokyo Big Sight at 95,000 square meters (although an additional 20,000 square meters will become available with the opening of the South Exhibition Hall in July this year).
The government has therefore decided a MICE facility is a requirement for the development of a Japanese IR. Moreover, the scale standard is strategic. Regulations call for a massive international hall with a capacity of 6,000 people or more. Currently, the largest in Japan are the Tokyo International Forum and Pacifico Yokohama, each with capacity for 5,000 people.
Further, a very large scale exhibition hall must be 120,000 square meters or greater, beating Tokyo’s Big Sight by a large margin.
The MICE facilities at Japan’s IRs will need to be on a massive scale – far bigger than anything the country has seen before. Naturally, it will be expected to compete globally, heralding a new era for MICE in the country.
At a study session hosted by the Japanese IR Association in Tokyo in March, local government and congressional representatives interested in attracting an IR heard expert observations on what Japan’s MICE industry needs to compete with other leading nations.
“Japan should start with its three IR locations – the big cities and the regions – and in the long term, these will provide a good test,” explained Niall Murray, founder of Murray International, on the topic of expanding the nation’s event facilities.
“Of course, the scale of each MICE is different. There are 10 exhibition halls in Germany of a scale of 100,000 square meters or more. In the future, Japan will expand to match this.”
“A PARADIGM SHIFT WILL OCCUR”
The Chief Sales Officer of US-based IR operator Caesars Entertainment, Mike Massari, explained that a “paradigm shift” will need to occur in Japan’s hospitality industry all centered around embracing MICE.
“First of all, hotels in the vicinity – there should be around three hotels with 3,000 rooms each providing easy access for MICE visitors,” he said. Currently only Tokyo’s Shinagawa Prince Hotel boasts more than 3,000 rooms nation-wide.
“The data shows that visitors who come to an IR for business like MICE will also spend a lot of money during their stay on tourist activities.”
Adding to Massari’s call for many more hotel rooms, Caesars Vice President Meeting Operations for the Atlantic City Region, Steve van der Molen, highlighted, “This is how many people MICE will bring in. It is, therefore, essential to build an ecosystem in advance.
“We have succeeded in this with new MICE in Atlantic City (opened in 2015).”
This ecosystem, van der Molen said, was realized via strong cooperation between the government and local authorities.
“I think you know about Google’s Tech campus,” explained Caesars VP of Sales Lisa Messina, pointing to Caesars Forum Las Vegas, a large MICE facility due to open in March 2020 “There are entertainment facilities and activities built around the core office. IR facilities are the same. There are many experiences in one location, each with great access. I think a ‘campus-style’ IR is very appealing.”
Caesars Forum will offer 51,000 square meters of meeting space and two of the world’s largest event halls at 100,000 square meters. It utilizes state-of-the-art technology to control partitions so the large spaces can be arranged into various smaller meetings rooms, with over 1,000 possible layouts. It also happens to be within a short walking distance of the Las Vegas Strip.
Likewise, Japan’s IR MICE facilities can exploit late-entry advantage, implementing cutting-edge technology while also benefiting from the lessons learned from previous MICE facilities.
There are great expectations that Japan’s MICE will break the mold and set a new international standard.
IAG spoke with the Japan National Tourism Organization’s (JNTO) Etsuko Kawasaki, Executive Director, Japan Convention Bureau, about what Japan’s long-term MICE industry should look like.
IAG: Thank you for speaking to us. Could you start by giving us your definition of MICE?
Etsuko Kawasaki: MICE is an acronym. It represents corporate meetings (Meetings), incentive and training trips for those corporations (Incentives), international conventions such as international company or group conferences (Conventions) and events (Exhibitions/Events). The four categories are entirely different, but they have a lot in common in that companies and groups seek them out as a destination. Therefore, these business events are collectively called MICE.
IAG: What is the current state of the global MICE market when compared to Japan?
EK: If we only consider international conferences then there were 414 held in Japan in 2017. That puts Japan seventh in the world and first in Asia. However, in the Asian region other countries such as South Korea and China are fast catching up. In the 1990s, Japan had 50% market share in Asia, but today it is closer to 30%.
IAG: So competition is getting more fierce?
EK: Exactly. During the “Japan is Back” Japan Revitalization Strategy of 2013, the goal was to “continue to be the number one in Asia until 2030 and establish a permanent position as a hosting country for international conferences.”
IAG: What is the main selling point for Japan if we want to compete?
EK: Japan’s MICE has four strengths. The first is its unique culture and hospitality. Many foreigners feel that special warm welcome that Japan has. The second is the sense of security. The safety and cleanliness of Japan are appealing. The third is the intellectual property in Japan such as world-leading knowledge and talent. The fourth is the high quality of service provided by Japanese staff – for example, the accuracy of Japan’s transportation infrastructure. Things running on schedule is very important when coordinating a MICE event.
IAG: I have heard that Japan’s local cities have opened distinctive MICE facilities.
EK: These are called “unique venues.” For example, in Yamagata they have a MICE with sake and hot springs. Kyoto’s Nijo Castle holds banquets in the gardens for conferences. In May of last year, the approach to Miyazaki Shrine was opened to host an academic conference reception party with 1,000 visitors.
IAG: It’s a place where people from overseas can get a taste of the extraordinary, much like why people go to casinos.
EK: I agree. Even conference participants need downtime. If you can relax in a place with a feeling of openness, you will be able to deepen your relationships with those around you.
IAG: So what is an ideal MICE facility?
EK: It needs to feel like it is really Japanese. If it is a regional city, you have culture and aspects unique to the area. MICE resorts overseas have everything in one place, including entertainment. That’s convenient and the MICE facility becomes a hub. People who gather there will go for dinner at night and that’s when they will come in contact with the local community. They’ll get a feel for the area’s history. In Japan, I think that would work.