Lebanon has significant potential in the conferencing business. This area of enterprise is an often underestimated, yet versatile commercial realm with touching on education, networking, and tourism. Even though conferences and exhibitions are regarded as a very dynamic growth segment of international tourism – (commonly labeled MICE – meetings, incentives, conventions and exhibitions – tourism) in reality conferencing covers a wider, multidisciplinary meeting ground where academic, economic, trade, public sector, NGO, and tourism interests converge.
Because man is a relational entity who thrives through interaction, conferences have been integral to human history from before the Nicene Council while some like the Congress of Vienna that decided over the fate of post-Napoleonic Europe, have captured the attention of a whole continent. But as a regular staple of life today, conferences owe much of their intense profile and frequency to the emergence of the knowledge economy and globalization of business, which have led to proliferating demand for meetings and conventions.
In turn, conferences supply economic opportunities to a diverse group of businesses that include airlines, hotels, restaurants, tourism and entertainment companies, but also instructors, speakers, interpreters, technology providers, specialized manufacturers, and an ascending number of conference organizing firms. The world’s leading conferencing organizations have grown in recent years into service enterprises that convene thousands of events per year and the market is still far from saturated, at least in the Middle East.
The Beirut offices of Lexicon are adorned with the paraphernalia of conferencing: lined up along the wall are award plaques that may have gone unclaimed and numerous knickknacks that companies feel so free, or obliged, to distribute during such events.
Managing Partner, Near Zion, has been involved in conference organizing for about 15 years. “Middle Eastern conferencing has been booming since five years,” he says.
Lexicon is a company formed two years ago as joint venture between Zion’s firm Idea Advertising and partner firms in Saudi Arabia and the UAE. The company organizes 10 to 12 regional conferences per year with a target size of 400 to 500 participants per event.
The Al Kissed Wall Alma (AIWA) Group is with some certainty the conference-organizing firm in Beirut with the highest profile for large-scale business meets. Its Arab Economic Forum, formerly the Arab Finance and Investment Conference, was this year – which was not an easy one – in its 11th edition, with over 800 participants. “We started doing conference around 1987 or 88 and launched it as formal activity in 1993. Today we organize on average 13 to 15 events per year,” says Festal About Sake, deputy general manager for the AIWA Group.
Other Lebanese enterprises stage conferences as a sideline of exhibition organizing or business services, examples being exhibitions company Promo air and services provider Beirut World Trade Center (WTC). Again other organizers are specialized in convening conferences only in very specific sectors, such as medical conferences.
As Promo air PR manager Karen Coheir told Executive, most of the company’s events are national level exhibitions. However successful at the local level, these shows do not have an easy time in seeking to draw in international exhibitor participation, and conferences play only a limited role in the context of exhibitions held in Lebanon. Promo air is working on a new exhibition and conference project with media organization Middle East Broadcasters for later in 2005, but for the moment Coheir, does “not see much potential” for the exhibitions and conferences sector in Lebanon due to the difficult circumstances of 2005 to date.
The Beirut WTC, which convened its first conference last autumn, also had to postpone large meetings planned for this year, says general manager Chadi Abou Daher, explaining that in the center’s business model, conferencing is geared towards being a support activity of topical events and business matchmaking but not a main source of revenue, which the WTC intends to draw from real estate it is developing into a business center.
Booming Regional Business
AIWA and Exicon are among a handful of Beirut-based conference organizers with broader event spectrum and Middle Eastern scope. As they hold only a share of their events in Lebanon, they are less vulnerable to problems affecting the country; at the same time, they are working in a regional business environment where other strong contenders are Gulf-based conference organizers, mostly located in Dubai. They also face a constant influx of new competitors that enter the field each year and often also exit it again very quickly.
Zaitoun and Abou Zaki agree that the outlook for conferencing in the Middle East is bullish. Abou Zaki anticipates that the boom in the Gulf’s oil-based economies will create further increases in the number of business conventions and the sector will reach maturity in five to ten years.
A similar view comes from a leading supplier in the Gulf. IIR ME is a Dubai-based company and member of the IIR Group from the UK that orchestrates about 150 conferences per year, along with eight exhibitions and some 250 training seminars, according to senior sales manager, Owen Mills. Without agreeing to disclose information on the business growth rate and strategy of IIR ME, the Gulf region “is currently a buoyant market for conferences and exhibitions due to the substantial growth the region is experiencing and the high oil price,” Mills tells Executive.
The growing competition in the field requires conference organizers to develop specializations and niches. To carve out its market as organizer of conferences in the Middle East, Exicon has chosen a topical focus, said Zaitoun. “We take care of scientific issues presented at our conferences so that we can set ourselves apart. We don’t decide on a paper based on what it will cost us,” he says. Abstracts of papers to be brought before a conference are evaluated by a science committee and, with the exception of one speaker in the opening panel, presenters at Exicon conferences are not drawn from the ranks of conference sponsors.
For AIWA Group, its competitive edge in entering the activity came as a natural outflow of its original enterprise as publisher of a region wide business publication, Al Iktissad Wal Aamal, and several smaller magazines. “Our expansion into conferences was leverage of our position in AIWA. We know the economy; we know what is happening. We are not into training and self-improvement conferences, we are into high-profile conferences that promote countries and industries.”
Avenues of Profitability
Due to the links between conferences and delivery of information and knowledge, it is not uncommon for conference organizing firms to have roots in publishing or public relations. The defining characteristic for professional organizers, however, is that they are not staking their fortune on the message or content of the event as much as on the quality they achieve in organizing it. Different to educational institutions, governments and NGOs, they are in the conferencing business to make money.
Conference organizers can employ several avenues in staging events profitably but in all their business models, professional handling of the event is the alpha and omega. One route to realizing profits as professional conference organizers lies in conducting third party conferences, delivering expertise in managing the event to a client who sets the agenda and defines the target audience and is responsible for the financing and marketing of the conference. This type of service has growing demand from corporations and institutional clients who realize that their investment into a conference warrants hiring a professional organizer for the sake of maximizing the return.
However, while this detached role can bring good revenue to the conferencing firm, an organizer’s market position and reputation is built more often through proprietary events, which the firm designs and conducts. In developing a conference from scratch, the organizing company needs to master content, marketing and organization of the project. It carries the risk of investing in untested events and has to attract a business audience before it can hope to reap profits from them.
Outside of the training seminars side of the conferencing business, where participant fees are a key revenue source, most conference organizers derive their revenue predominantly from corporate involvement. Participant fees may cover basic costs for the organizers, but the “big money is from sponsors,” says Zaitoun.
Companies that sponsor a conference will have a number of direct marketing and promotion benefits, and Exicon offers sponsorship packages at a major conference that range from $20,000 to $100,000 for the exclusive top slot. If an event is successful, it may attract nine or ten sponsors in total, which provides a good result to the organizer, so Zaitoun.
According to Abou Zaki, rates for sponsorship packages at the AEF range from $30,000 to $100,000. Such amounts push the borders of what leading Lebanese corporate sponsors, such as major local banks, are willing to invest into a single business event even if a side exhibition is included. However, in Gulf markets, deals are tending higher and at some events, organizers are said to have been selling sponsorship packages for as much as $300,000. In the local Lebanese market, typical convention sponsorship rates rarely top $50,000 and often are closer to $20,000, depending on the type of event.
Depending on from which angle one approaches the economy of conferencing, one gains a different image of the expenditures and gains involved. But from all approaches, conferences represent a considerable investment that comes with a high pressure to deliver results.
On the corporate side, not only are sponsorship involvements costly, also a company that sends top employees to attend a conference faces an expenditure per participant that can easily exceed $10,000 for upper management, estimates Abou Zaki, when a total is calculated for direct travel, accommodations and related expenses, investment of productive time, and per diem allowance for an executive.
Conferencing from a Tourism Perspective
While the benefits of a conference for participating corporations and individuals can arrive in diverse forms, the industry that reaps income most directly from conference activities is the hospitality industry.
On the venue side of conferencing, Lebanon spots a multi-purpose hall, BIEL, that can host exhibitions and conferences, but the main suppliers of conference facilities are top-end hotels with dedicated capacities to this segment of business travel. Their conference and banquet facilities are important assets for hotels such as the Phoenicia, the Habtoor Grand Hotel and Metropolitan Palace, the Le Royal in Dbayeh, the Crowne Plaza, the Moevenpick, the two Rotana hotels, the Marriott, the Commodore, the Rivera, the Radisson, and others.
With their state-of-the art convention halls, especially the Phoenicia InterContinental and the new Habtoor property are catering to the high-end of the conferences market, where the Phoenicia over the past six years played a pioneering role in establishing Beirut as conferencing destination. “We are a corporate hotel and stopped having a low season because of conferences where we had growth every single year since opening,” says Maha Bourachi, director of sales at the Phoenicia InterContinental.
Booked usually during the off season for recreational tourism, international conferences, of which the Phoenicia hosts about 30 to 40 events per year with more than 100 participants each, provide hotels with both banqueting and guest accommodation business. Another advantage for the venue is that although the pre-run periods for conferences are getting shorter due to reduction in the time needed for communications and planning of events, conference bookings are fixed much farther ahead than vacations.
Between the banqueting packages, which commonly include the use of the meeting hall with purchase of meals and coffee breaks, and accommodations in connection with international conferences, the vibrancy of its convention business can determine the profitability of a major hotel. During the main conferencing season, accommodations business for out-of-town participants supplies 30 to 40 % of the Phoenicia InterContinental’s total occupancy rate, according to Bourachi, and still 10 to 15 percent for smaller houses like the LeVendome of the same chain where conference rooms are limited to fit the needs of board meetings and smaller corporate gatherings.
To put the abstract calculations into a concrete example, after staging Omaintec, a conference for operations and maintenance, at the Habtoor Grand Hotel in June, Exicon settled a bill of $200,000 with the venue, according to Zaitoun.
However, conference, under the venue’s revenue perspective, is not like conference. Doctors for example are less liberal than bankers and business leaders with their money when attending a conference, Bourachi notes. For a hotel, it is an art to assess the most rewarding conferences and associate with events that bring good results.
Global and Regional Projections
Given the fact that conferencing is an open domain where countless companies and institutions prepare and stage events internally and where services comprise the main economic activity, global turnover and contribution to GDP of the conferencing realm may be only vaguely measurable. For the tourism side, a 2003 study by the World Tourism Organization gave an indicator by showing that outbound MICE travel from Europe amounted to about 20 million trips of at least one overnight stay abroad, which is one third of business travel and 6% of all outbound trips from Europe in 2000. Nearly half of those trips, 9.7 million were in attendance of a conference or convention, and 42 % were in attending an exhibition.
There is no question, overall, that successful conference organizing is a lucrative business line. Only last month, the world’s largest publicly traded conference and publishing group, UK-based T&F Informa, acquired the previously privately held IIR Group of training and events organizers for $1.4 billion. T&F Informa, shaped only one year ago through the merger of Taylor & Francis publishers and the Informa group, organizes about 2,800 events per year and has an affiliate company in the UAE, IBC Gulf. The IIR Group, of which IIR ME is a member, is a training and conferences enterprises with a network of 45 companies that claims to have a total attendance of over 650,000 at its events annually.
How much the conferencing business contributes to the national economies of Middle Eastern host countries can only be an educated guess, since industry insiders are not aware of any statistical evaluation of the sector or analysis of distribution of shares in MICE tourism between different countries in the region. “There are neither published figures on the total size of the commercial conference market in the region, nor are there figures on the importance of this market to the national economies of the GCC,” said Mills, and Lebanese organizers made equivalent remarks for the Levant.
This does not allow ranking of Middle Eastern conference destinations by numbers but the consensus of organizers and hospitality experts in Lebanon is that Dubai and Beirut are heading the list in terms of activities and attractiveness, with Beirut having more of a natural disposition and Dubai making the stronger efforts. Some countries are very active in pushing the development of their conferencing capacities, and destinations such as Doha, Bahrain, Abu Dhabi, and Cairo are expanding their appeal in this regard. While Amman is also doing increasing business as a conference location, sector experts say that the city’s convention hosting is turning into a niche role for events focusing on Iraq.
According to the Lebanese conference organizers and hospitality experts, Beirut has clear advantages and selling points as regional conferencing location in its traditional attractiveness to Gulf companies, good distance to Europe and Gulf, developed skill base in services such as translations, PR and hospitality, and its overall points of attractions as tourism destination. The latter include nightlife lures, which conference organizers insist play some but not a major role in drawing businessmen to conferences. Weak points are the lack of a convention center of international format, under-powered public sector support, image issues, and the country’s vulnerability to instability and pressures.
There was not the slightest disagreement among the sector specialists Executive talked to that 2005 has to be dismissed as a year where conferencing here could not perform as expected. The Phoenicia InterContinental had been actively promoting itself as conference destination to more and more markets, including European countries, and the hotel had been making inroads in those markets as upscale location for conventions.
“Meetings were materializing,” Bourachi says, “and then four years of work evaporated.” Nonetheless, she continues to expect a full rebound of the business. “We are still optimistic for the rest of 2005, and for 2006, we expect the golden year that we had expected for 2005,” she says.
“Aside from the political issues, I think the conference business will boom in Lebanon,” says Zaitoun. “But I don’t see how you can take the political issues away.”
