Thailand's industry readies for comeback

It has been far from an easy year for Thailand's conference and incentive industry. In that the country is definitely not alone. Recent global and regional events threw a spanner in the works of all financial plans and projections as the industry expected to build on its gains from last year. To make things worse, travel advisories were slapped on the south-east Asia region by some key source markets, such as Australia, due to health and safety concerns. These worked to effectively derail many events that were booked, as companies simply could not afford the additional insurance premiums. For a time, a real fear gripped the trade and there seemed little that could be done as companies faced up to businesses losses, layoffs and the struggle to keep things going. However, what it did also do is create a stronger industry. Hotels in Bangkok have stricter security and health policies than ever before and destination management companies (DMCs) have re-addressed their businesses with particular attention to their key source markets. It will not be a bumper year as was expected by many with most firms predicting only to break even. But, with the long-term fundamentals many believe are now in place, combined with one of the most buoyant economies in Asia, there are few with seriously furrowed brows. "Year to date we are down 60% on budget and 40% down on last year," Diethelm Events executive manager Mr David Barrett says. "This figure could have been worse but Singapore has been our saviour. Regional meetings business has been the quickest to rebound post-SARS and we are on track with our meetings business while our major long-haul incentive travel source markets are still soft. "I predict next year we will see a healthy growth in the regional meetings into Thailand, continued growth of our corporate teambuilding sector and interest with firm business returning from our long-haul markets such as Australia, UK and mainland Europe. Events from USA will probably return in 2005." Mr Barrett confirms travel advisories from major source markets rocked business earlier in the year. "Australia performed well in the first quarter 2003 and it looked like a bumper year for Thailand until government travel advisories resulted in the flow of business drying up temporarily. We now see signs of renewed interest in the destination," he says. "The beginning of the year was very encouraging, but business totally ceased during SARS and was like a wound-up coil. "From August, events from Singapore have sprung back in force as event organisers and corporates rush to stage events, postponed from mid-year, by year end." One unexpected performer has been the Philippines. "The Philippines provided us with some very good large incentive programmes earlier this year that further woke us up to the fact that there is a goldmine of business on Thailand's doorstep," Mr Barrett adds. Despite a tough year, development of new products and venues continues apace. The JW Marriott Phuket Resort and Spa has emerged as a clear success story in its second year of operations and has been consistently applauded by DMCs. Its quiet and all-inclusive location plus its distance from the heavily populated Patong area are clear pluses for the property, especially given the security concerns raised by travel advisories and some companies regarding properties being in the heart of the action. The JW Marriott Phuket's conference and incentive business is dramatically up compared with 2002 levels, confirms Mr Jeff Crowe, director of marketing Thailand for the JW Marriott Phuket Resort and Spa and its sister property the JW Marriott Hotel Bangkok. "By August of this year we had already surpassed our full year 2002 room night total for meeting, conference, and incentive production," he says. "In a very short amount of time, JW Marriott Phuket Resort and Spa has quickly come to be recognised as one of the top luxury meeting venues on the island and we're confident that in 2004 we will draw even with, or surpass, the older but more established resorts." Interestingly the success of the resort has been built mainly off the back of regional business, a trend that is likely to continue given the more tentative bookings coming from long-haul markets. International air access is the obvious major benefit for Phuket as an established conference and incentive destination and with the JW Marriott Phuket only 15 minutes from the airport, compared with the 45 minutes it takes to Patong, it has been an major boon for the property for short meetings. Of the up-and-coming destinations for meeting planners in 2003, front-runners are clearly Hua Hin and Krabi. "Both resort destinations have been winners as clients express heightened concern over security and are attracted to less-developed destinations compared to traditionally heavily populated beach resorts of Phuket and Pattaya," Diethelm Events' Mr Barrett adds. The Sheraton Krabi Beach Resort is the most recent luxury opening. The property is hitting up the domestic market heavily for business due to the high frequency of flights from Bangkok to Krabi International airport, with services from Thai Airways International, PB Air and Phuket Air, with Bangkok Airways planned to enter the fray soon. The high competition is creating competitive prices also, with Phuket Air offering US$105 return fares from Bangkok. Regionally, Singapore is the key market, with twice-daily direct flights. Sheraton Krabi Beach Resort is located on a 500m stretch of beach, a major advantage over most other luxury developments where a 10-15 minute walk is required to the beach. "Having a beach frontage is a great advantage as we can organise activities such as team-building, treasure hunts, beach games, outdoor BBQs and even break-out sessions under the swaying palm trees," the hotel's sales and marketing director, Mr Richard H'ng says. The soft adventure, nature and eco-tourism destination for which Krabi is reknowned will be put to good use he adds. "Krabi's natural resources are perhaps the most powerful attraction of all. We will take advantage of this and delegates can take day trips to nearby islands using high-speed boats. "There they can spend the whole day out in the remote islands snorkeling, scuba diving or conduct brainstorming sessions with our hotel catering for their picnic lunch. "For the more competitive, we have organised team-building events that involve kayaking in Ao Thalane Bay or trekking in the nearby jungle." Activity has been no less vigorous in Bangkok, with investment in renovations and development that all point in the direction of long-term business confidence in the city as a regional centre for conference trade. One of the biggest spenders has been at the Royal Orchid Sheraton Bangkok Hotel and Towers, where more than US$7 million has been spent on improvements since the end of last year. "I think this confirms our belief in Bangkok and in particular Royal Orchid Sheraton in meeting and conference business," the hotel's Ms Goh Choo Leng says. "Bangkok has been selected as a venue for a few world conventions in 2004. We believe these conventions will generate demand for regional conference business and having the right facilities will be one of the key to success." Regional race Regional business is the name of the game like never before. With world events conspiring to limit the volume of long-haul traffic the importance of building serious long-term business among regional multinationals and taking on Singapore and Hong Kong for their business has become the new battleground for conference and meeting trade. Ms Goh believes with the world-class quality of Bangkok's hardware and software, the city is competitively placed. "Bangkok provides exceptional value compared to its main competitors of Hong Kong and Singapore," she said. In another part of town, away from the Chao Phraya River in the heart of the business district of Sukhumvit, the combined offering of the Sheraton Grande Sukhumvit and the recently rebranded and renovated Westin Grande Sukhumvit, located directly opposite, is grabbing headlines. The combined facilities of the two properties offer organisers access to a total of 800 rooms, two ballrooms, 17 function rooms and 10 restaurants. "It provides us with a unique opportunity to capitalise on the larger corporate and convention market," Sheraton Grande Sukhumvit general manager Mr Richard Chapman says. A sky-bridge connection between the two properties is planned, with preliminary permission having been obtained from the Bangkok Municipal Authority, that will connect the two buildings and the Sky Train's Asok station. "As of August 2004, this will be connected to the Subway Sukhumvit station immediately adjacent to Asok, providing the hotel with direct covered connection to the city's two mass transit systems - the only two hotels in the city to have this facility," added Mr Chapman. An increasingly Asia-centric strategy seems to lie at the heart of Thailand's conference and incentive future - a strategy that aggressively competes for business with Hong Kong and Singapore. This is the major development caused by the recent global events. This view is confirmed by InterContinental Bangkok regional general manager, Mr Michael Herrmann who confirms intra-Asian markets will deliver the highest volume of meeting and convention business for the property. There is no doubt that the business environment now compared to just two years ago is radically different. The world is a different place and the trade has been at pains to adapt to the new challenges and dynamics. Safety and security are now key concerns for clients in all destinations - especially for large venues such as the 1,100-room Royal Cliff Beach Resort and PEACH facility in Pattaya, which can handle 4,500 delegates. However, the resort appears to have allayed all fears with the securing of major business going forward, central to which are the Pacific Asia Travel Association Annual Conference and the SKAL World Congress to be held in 2006. It has been a difficult year for everyone, and the eastern seaboard icon is no different with prospects of breaking even for 2003 the best they can hope for, says PEACH spokesman Mr Zahid Ali. The brightest light for the industry is the increasing involvement of the Thai Government, having set up a dedicated bureau to market Thailand and aid in bids for major events. However, it is also is keenly awaiting its launch to provide them with the support to challenge the dominance of Hong Kong and Singapore and chart a new path with the goal of becoming the center of conference business in Asia. l