China’s meetings industry: A future market for Germany
Germany has been one of the world’s leading destinations for meetings and congresses for many years. It is the role of the GCB German Convention Bureau to secure this position for the future by marketing German meeting and congress facilities and products in source markets, but also by stimulating new ideas in order to prepare the sector for important future developments. As the globalisation megatrend continues, the GCB supports the event sector in adapting its services to the needs of international customers.
As a future market with outstanding potential, China is a major focus of the GCB’s marketing activities, which primarily highlight the expertise of German cities and regions in areas of business and science that are important for international trade between the two countries. These cities and regions offer an ideal framework for events run by Chinese companies and organisations. Germany’s expertise in the automobile industry, chemicals and pharmaceuticals and other technological sectors is of particular interest to Chinese meeting planners.
1 Event destination Germany
A leader in Europe and around the world
Germany is one of the world’s leading destinations for meetings and congresses. In the rankings published by the International Congress & Convention Association (ICCA), which include international association events with at least 50 participants, Germany has been the No. 1 in the European comparison and No. 2 worldwide after the USA for the past 11 years. In 2014, the ICCA statistics for Germany registered 659 international association meetings. (Source: ICCA statistics “International Association Meetings” ICCA, April 2014).
Figure 1: International significance of event destinations
The “Meeting- & EventBarometer Deutschland 2014/15” published in May 2015 includes events and smaller meetings. In 2014, this survey recorded 3.04 million events in Germany. These were attended by a total of 383 million participants, 3.3 per cent more than in the previous year.
Greater demand has also stimulated growth on the supply side: 7,152 meeting and event locations were available in 2014, an increase of 1.7 per cent compared to the previous year.
Figure 3: Event locations in Germany
At the same time, the number of international participants has grown constantly over recent years – from 14.3 million in 2006 to 25.6 million in 2014. Moreover, the sector expects this trend to continue. 58 per cent of the suppliers who participated in the study and 51,7 per cent of German event organisers believe that international events will continue to grow in importance over the coming years.
Figure 4: Foreign participants of events in Germany
Good reasons for events in Germany
For an event location to be internationally competitive, it must satisfy three important needs. As well as excellent value for money, it must also offer outstanding infrastructure. The quality of Germany’s infrastructure is ranked No. 3 in the world (Global Competitiveness Report of the World Economic Forum, 2013). Event planners profit not only from outstanding transport connections with more than 40 airports, a dense railway network and excellent highways but also from the country’s many first-class conference hotels, convention centres and event locations.
Germany also scores highly due to its expertise in important areas of science and commerce that offers meeting and event organisers useful synergy effects and enables them to link conferences with topical and related events – such as factory tours or accompanying programmes.
German convention organisers have also been quick to tap into the innovative power of business and science, for example Germany is an international leader in the growing area of “green meetings”.
GCB German Convention Bureau e. V.
Figure 6: The GCB
The GCB German Convention Bureau is the marketing organisation that represents the German meeting and congress sector. It supports its members and partners in marketing their products and services both nationally and internationally while also stimulating new ideas in the sector. The GCB has around 200 members representing over 450 businesses including leading hotels, convention centres, locations, city marketing organisations and event agencies as well as service providers from the German meeting and congress sector. The roles of the GCB are clearly defined: representation, marketing and promotion of sales, creation of platforms, monitoring the market and collecting data as well as consulting and taking care of the interests of the sector in dealings with international and national authorities, organisations and media.
The GCB’s marketing activities focus on three major themes: Germany’s key industries as a powerhouse of business and science, sustainable development in the German meeting and congress sector and the innovative potential of Germany.
Industrial and scientific expertise, mutually beneficial trade relations and shared key sectors are becoming ever more important factors in the selection of an event destination – and the GCB’s key industries strategy takes account of this trend.
Figure 7: Expertise as an advantage
In the area of sustainability, the GCB takes its responsibilities seriously – not only for the benefit of the environment and society as a whole but also in order to create a competitive advantage for the German meeting and congress sector. As sustainability grows in importance as a mark of quality and as a criterion in the selection process for event destinations around the world, Germany’s commitment as a pioneer in the area of “green meetings” will also pay financial dividends in the future.
The GCB began addressing the topic of innovation in 2013 with the study published in cooperation with its partners “Meetings and conventions 2030: A study of megatrends shaping our industry”. It is no longer sufficient for companies to keep pace with developments. They must forge ahead and proactively shape the future. In doing so, the GCB also implements its own innovative ideas helping the event sector to prepare for the megatrends and challenges identified in the study.
2 The future of the event sector
The study “Meetings and conventions 2030” sheds light on current megatrends, their future development and the ways in which they will affect the meeting and congress sector. Megatrends are an important concept in futurology. They are used to describe transformations, which take place over a number of decades and impact every area of life and society – politics, leisure, working lives and value creation structures. They are frequently global in nature. This study identified five megatrends, which are of particular relevance to the meeting and congress sector:
–Technology in work and life
–globalisation and internationalisation
–mobility of the future
–sustainable development
–demographic change.
These megatrends offer opportunities for events in Germany but also create significant challenges for those involved in the meeting and congress sector.
Figure 8: Megatrends
Megatrend: Globalisation and internationalisation
Observers have been monitoring the phenomenon of globalisation for a number of decades. It directly affects an ever-growing number of population groups on every continent. For example, thriving global networks are being observed in areas such as business, science, politics, social structures, culture, communication and the environment. Global relationships are becoming more densely interconnected and can be seen on every level: from individuals and institutions to states, companies and associations as well as supranational organisations, such as the EU.
Virtually every indicator of globalisation, such as mobility of persons, the volume of global trade or communication and Internet access, is rising. The same applies in the areas of culture, language and politics. The international legal business is expanding, the number of organisations likewise.
Cultural diversity
The continuing trend of globalisation means that an ever growing number of international participants are attending an ever growing number of international events. The result is greater cultural difference and diversity. Despite the homogenisation of many product areas, it means that global companies have to take better account of the needs of local customers and markets.
This has special implications for the meeting and congress sector. As conditions change more and more rapidly, the importance of globally distributed meetings and conferences across many locations is growing. It is therefore vital to understand and study the backgrounds of different markets, countries and participants in order to be able to plan and respond appropriately. Patterns of expected behaviour, languages and cultural norms as well as forms of communication and interaction must become even greater priorities in the organisation of successful meetings and congresses. This affects areas such as formal greetings, religious rituals, provision of breaks and places for prayer, rules regarding physical contact, taboos, holidays and food cultures. In Germany, it is standard practice for employees in the event sector to speak foreign languages. Intercultural understanding and competences are also being promoted enthusiastically.
New competitors and new markets
With the advance of globalisation, new competitors such as the BRIC nations (Brazil, Russia, India and China) are emerging and claiming a growing proportion of the international meeting and congress business. In order to gain an early foothold in the markets of tomorrow, the GCB continuously evaluates the markets it monitors and observes. It tests market development concepts for its members as well as for its own presence in these markets and develops market entry strategies. Globalisation is an important trend of the future and therefore also offers excellent opportunities for German suppliers to grow in existing and future markets.
The growth of worldwide networking
As the internationalisation and globalisation of markets and social structures continues, the meeting and congress sector is taking on fresh importance. Well-equipped meeting places and events are essential as the foundation for more widespread and wide-ranging clarification and networking processes. International organisations, in particular, are highly dependent on the ability to exchange information and ideas effectively as their market positions and services are based primarily on the development and commercial exploitation of intellectual resources.
Accessibility and mobility
Greater internationalisation with growing numbers of international guests attending events also means that Germany, as an international event destination with an outstanding position, must continue to be highly accessible in the future. The rising cost of energy around the world and the need for greater investment in security systems are two of the challenges in this area. Moreover, participants at these events have ever higher expectations regarding the flexibility and individuality of mobility services. Consequently, it will be necessary to make transportation more multimodal, cooperative and efficient and also incorporate input from event providers and planners.
Figure 9: Accessibility and mobility
3 The GCB market development strategy
Source markets with potential
Figure 10: Markets with potential
The GCB develops marketing activities that focus on specific target groups and thus has a widespread presence in both international and national markets. It supports the marketing of Germany as a destination for meetings, congresses and incentives.
Within the framework of its international marketing activities, the GCB differentiates between primary markets (the UK, USA, Belgium and China as a market with above-average growth rates), secondary markets (European source markets such as the Netherlands, France, Italy, Austria and Switzerland as well as Brazil) and tertiary markets (all other markets, in which the GCB cooperates with the foreign representations of the German National Tourist Board (GNTB)).
After an in-depth study of these markets and assessment of their potential, the GCB has decided to focus, over the coming years, on China as well as the key markets of Germany, Europe and the USA.
The importance of the Chinese market
The Chinese market has emerged as an important future market for the German meeting and congress sector. According to the “Meeting- & EventBarometer 2012/2013”, China has already risen to become the 11th most important source market for suppliers to the German meeting and congress industry and stands alongside the USA as the only non-European country to feature in the upper regions of the rankings.
The GCB’s marketing activities primarily highlight the expertise of German cities and regions in areas of business and science, which are important for international trade between the two countries. These cities and regions offer an ideal framework for events from China. This was confirmed, among other things, by a survey of predominantly Chinese MICE buyers in the “China and Asia Meetings Industry Research Report 2011”, which identified important factors influencing the selection of an event destination as being not only price, location and quality of accommodation and service but also the strength of the trade relationships with China.
China is Germany’s largest trading partner after France and the Netherlands. The German Chambers of Commerce and Industry forecast that China will become the country’s number one trading partner in approximately 10 years. Germany is already China’s top trading partner in terms of export volumes.
German joint ventures have taken on a central role in the world’s largest automobile market and the boom in the Chinese chemicals and pharmaceuticals sector has benefited Germany as well through rising exports. Moreover, China is an important market for German engineering companies in the rapidly expanding area of laboratory, measurement and control technology as well as in medical-technical systems.
China: Economic partner
In 2013, Germany and China traded goods with a total value of more than €140 billion.
– Exports: In 2013, Germany’ exports to China were worth around €67 billion, primarily machinery, vehicles and chemical products.
– Imports: Chinese companies exported goods worth over €73 billion to Germany in 2013 – a fourfold increase compared to 2000. The most important products were computers, mobile phones and electronics as well as clothing and electrical equipment.
– Investment: So far, German companies have invested more than €26.5 billion in China. Some 4,000 companies are currently active in the country. In 2012 alone, German investment in China rose by 28.5 per cent to US$ 1.45 billion. Conversely, 98 new Chinese companies settled in Germany in 2012. There are now a total of 2,000 Chinese businesses operating in the Federal Republic making China the third largest foreign investor in Germany after the USA and Switzerland.
Source: Handelsblatt Online, 31.03.2014
GCB marketing in China
The GCB’s activities in China are based on intensive market research and evaluation. Of these, a study the GCB commissioned from TNS Infratest with a special focus on bilateral German-Chinese key industry sectors and the development of business travel statistics are worthy of special mention. Other sources, surveys and studies have also been taken into account.
For entering the Chinese market, the GCB has implemented the following strategy and formulated objectives for the near future:
–August 2013: Opening event in the “Audi City Digital Showroom” in Beijing as part of the GNTB theme of the year “Germany: open for business – trade fairs and conventions” – the theme and selection of the event location were closely related to the GCB’s key industry strategy
–2014: Market development in cooperation with GNTB representatives in Beijing. As well as media relations and sales calls, the focus was on a multi-month online training programme for Chinese event planners in order to inform them about Germany as a meeting and congress destination
–2015: Opening of GCB representative office in Beijing, expansion of marketing activities, step-by-step development of further opportunities for participation by GCB members.
Outlook
Germany’s success as a destination for events from the Chinese market depends heavily on the mutual trade relationships between Germany and China, which is expected to continue its positive trend and indeed intensify over the coming years.
Furthermore, the GCB together with many partners in the German events sector supports German market participants – such as hotels, convention centres, locations and mobility service providers – in presenting their products. These have been adjusted to the needs of an increasingly international market and the expectations of Chinese customers in particular. To ensure that employees working in the sector in Germany meet these expectations it is crucial that companies and institutions in the event sector invest in effective training and professional development programmes. The globalisation megatrend will make competence in foreign languages and intercultural skills a key criterion in the selection process for event locations.
Mobility services capable of handling the challenges of the future are equally important – multimodal concepts, which not only ensure that international guests are able to find their way around easily and comfortably using the latest technology but also integrate services from a wide range of transport systems that are both flexible and conserve resources.
The study “Meetings and conventions 2030: A study of megatrends shaping our industry” has supplied the foundation for vital initiatives in the sector. The activities implemented by the GCB together with its partners in the wake of this study continue to sharpen awareness of the significance of these areas among providers of events products and services in Germany. The aim is to secure Germany’s top position as a destination for international event planners – including and especially those in China – for the future.
4 Literature
Global Competitiveness Report of the World Economic Forum, 2013
Handelsblatt Online, 31.03.2014
ICCA statistics “International Association Meetings” ICCA, April 2015