1 The True Value of Business Events Professor Leo Jago PhD
DeHaan Institute Boston Convention Partnership Meeting 30 November
2010
Slide 2
2 FACT Business events make key broad-based contributions to
host economies BUT Most of our efforts focus on the tourism
contribution of business events CONSEQUENCES Business events dont
get the recognition and support they deserve Destinations lose
opportunities to leverage the benefits SOLUTION Need to assess and
promote the beyond tourism value of business events
Slide 3
3 Presentation Outline Traditional Approaches to Valuing
Business Events Problems with these Approaches Change Prompted by
the Global Financial Crisis (GFC) Business Events Contribution to
Innovation Assessing the Broader Value of Business Events Next
Steps
Slide 4
4 Traditional Measures for Estimating the Value of Business
Events Delegate Numbers Delegate Hotel Nights Number of
Accompanying Persons Pre and Post Event Touring Activity Total
Delegate & Accompanying Person Spend Economic Impact of
Delegate & Accompanying Person Spend
Slide 5
5 Traditional Measures for Estimating the Value of Business
Events (Cont) Often done for an individual event Sometimes
aggregated across a year for the destination The sector has been
sucked into narrow measures of performance We are focusing on the
wrong thing and often not measuring it well anyway
Slide 6
6 Economic Impact of Business Events Australias National
Business Event Study (2005) Business Events generate $17.3 billion
spending per year Contribution to total employment of 213K
Contribution to Gross Value Added of $11.4 billion Obtained
substantial traction with government Prompted a UNWTO study
Slide 7
7 Economic Impact of Business Events: Boston Economic Impact
from Academic Events (2009 Annual Report) From 2011 2013, the MCCA
projects its activities will: generate over 1.62 million hotel room
nights; generate $1.65 billion in economic impact to the
Commonwealth; Variable2009 Total Events21 Total Attendees50,450
Total Hotel Room Nights36,340 Economic Impact$33.99 M Tax
Benefit$1.91 M
Slide 8
8 Fundamental Problems The commonly used measures focus
exclusively on the tourism impacts of business events Many see the
impact to only benefit hotels, convention centres and restaurants
Tourism benefits are seen to be more frivolous and have lower
credibility than benefits from other sectors Until recently, not
even those in business events often promoted the additional
benefits of the sector
Slide 9
9 Why the Link with Tourism? Dates back to at least the
nineteenth century where business events were seen as a way to
promote destinations and fill hotel rooms (Detroit in late 1800s)
The attraction of delegate visitors and their spending pushed
business events into Tourism Departments Tourism Departments
measure value through visitor numbers and spend, hence the flow of
this approach to business events This impact is fairly easy to
measure and short term so can be estimated soon after the
event
Slide 10
10 Consequences Grossly understates the value of business
events to the region Understates the range of dimensions /
variables / benefits Understates the range of beneficiaries
Understates the total value Connection with government tends to be
through Tourism Minister (usually lower status in government)
Rarely do Industry Ministers let alone the Governor, Prime Minister
or President see tourism / business events as key high profile
drivers of economic development
Slide 11
11 Beyond Tourism The fact that the funding for business events
has often come from Tourism Departments has meant it has been
difficult to extend outside tourism There is now a push for this to
happen but it tends to be rear guard action Most Convention Bureaux
Boards dominated by people with strong tourism affiliations Boston
a notable exception (only 2 in 12 from tourism)
Slide 12
12 AIPCs Guide to Calculating Economic Impact Figures Whilst
this Guide focuses on the tourism impact, it does identify the need
to consider other dimensions: Dont forget the other business
benefits that result from congress centre activities. These can
include such things as trade and investment impacts, new business
opportunities and creating a showcase for local product and
services, and may be of more direct importance to parts of the
business community than spending data. Along with business
benefits, your congress centre also generates broader community
benefits such as educational opportunities, technology development,
professional and cultural development and enhanced tourism. In a
time of heightened global tensions, the kinds of activities and
events Conferences and congresses promote international cooperation
and create forums that help improve international relations, global
communications and professional networking.
Slide 13
13 Key Messages for the Meetings Industry (Joint Meetings
Industry Council) Meetings and conventions generate uniquely
high-yield economic benefits and attract influential visitors;
Meetings generate a wide variety of other economic and community
benefits; Meetings and conventions generate incremental tourism;
Meetings and conventions promote the profile of a city or region
and its role in national and international affairs; Meetings are
directly connected to the key issues of the day; Meetings play an
important role in building better understanding amongst different
groups and countries throughout the world.
Slide 14
14 Based on the Rhetoric in MCCAs 2009 Annual Report: Boston
Seems to See the Big Picture Five years since the opening of the
BCEC, it has become one of the Commonwealths key economic engines,
bringing thousands of people from around the world to
Massachusetts, and spurring long-term economic ties with local
businesses that propel our economy forward. Deval L. Patrick
Governor, Commonwealth of Massachusetts The Hynes and the BCEC have
together helped to raise the profile of Boston as a worldwide hub
for life sciences, medical research and technology by bringing
leading international thinkers together with local talent, creating
long-term economic benefit to our industry and economy. Thomas M.
Menino Mayor, City of Boston
Slide 15
15 Meetings and shows at the BCEC and the Hynes bring some of
the best minds in medicine and science to Massachusetts and
reinforce the areas reputation as the hub of our industry. Sylvie
Grgoire, President of Shire Human Genetic Therapies. One of the
best ways to engage in teaching and learning is for people from
around the world to get together to explore ideas and share their
unique perspectives and experiences. In Massachusetts, we see this
globalization of education happening every day as meetings and
conventions bring the brightest minds together, across languages
and nations. The energy and dynamism of this type of information
exchange goes a long way toward making Massachusetts the leader in
higher education. Phillip Clay, Chancellor of MIT If these quotes
represent Bostons widely held view of the value of Business Events,
Boston is well placed
Slide 16
16 External Shock Prompts Change Global Financial Crisis
prompted government and companies to cut expenditure Business
travel, especially business events seen as a soft target Leisure
tourism could offset facilities losing business travel Advances in
technology seen to compensate Attending business events seen by
many as a jolly Forced the business events sector to reflect on its
true value A range of studies were commissioned to assist
Slide 17
17 The Return on Investment of U.S. Business Travel (Oxford
Economics) For every dollar invested in business travel, companies
realise $12.50 in incremental revenue The average business in the
U.S. would forfeit 17% of its profits in the first year of
eliminating business travel 28% of current business would be lost
without in-person meetings Business travellers stated that 5-20% of
their companys new customers were the result of trade show
participation In order to achieve the same effect of incentive
travel, an employees total base compensation would need to be
increased by 8.5%
Slide 18
18 Oxford Economics Study (Cont) Trip TypeReturn on $1 of
Investment Customer Meetings$15 - $19.99 Conferences$4 - $5.99
Trade Shows$4 - $5.99 Incentives$4 +
Slide 19
19 Managing Across Distance in Todays Economic Climate: The
Value of Face-to-Face Communications (Harvard Business Review) A
global survey of 2300 HBR subscribers 79% said that in-person
meetings are the most effective way to meet new clients to sell
business 89% agreed that face-to-face meetings are essential for
sealing the deal 95% said that face-to-face meetings are a key
factor in successfully building and maintaining long-term
relationships
Slide 20
20 Why the Need to Demonstrate Size and/or Value? Business
events must be seen as an investment rather than a cost by
companies and destinations To be taken seriously, an industry must
produce credible figures to show its contribution to the economy
Tourism Satellite Accounts (TSAs) were the coming of age for
tourism Underpinned investment in infrastructure Government support
for promotion
Slide 21
21 Why the Need to Demonstrate Size and/or Value? (Cont)
Business events adopted this logic but it clearly undervalues the
contribution Even the UNWTO project to estimate value looked only
at the tourism value It also overlooks opportunities to leverage
the value of business events
Slide 22
22 Explore the beyond tourism broader-based value of business
events The meetings and events industry should rightly be thought
of as a key component of the global knowledge economy, rather than
as a branch of tourism (Leigh Harry, 2009)
Slide 23
23 human interaction, especially face-to-face interaction,
drives innovation and inspiration. Accidental connections between
leading thinkers studying different topics can unlock seemingly
intractable challenges and insoluble puzzles (Harry 2009)
Slide 24
24 Beyond Tourism Tourism is a key beneficiary of business
events, not a driver Business events are staged for specific
reasons that have nothing to do with filling hotel rooms this is
purely a spinoff benefit They are key knowledge creation tools If
business events are to realise their potential, there must be a
mind shift on the part of government, destination and event
managers about their real purpose and outcomes
Slide 25
25 The Role of Business Events in Enhancing Innovation Maskell
et als (2006) research argues that: Meetings and conferences are
temporary clusters for knowledge building Core Motives or Needs
Develop and share ideas Educate/inform Promote Network / socialise
Change attitudes / behaviour Sales and performance Core Motives or
Needs Develop and share ideas Educate/inform Promote Network /
socialise Change attitudes / behaviour Sales and performance
Business Event Business Event Key Outcomes Innovation Improved
organisation performance Personal development Increased
productivity Increased sales New skills and knowledge Awareness Key
Outcomes Innovation Improved organisation performance Personal
development Increased productivity Increased sales New skills and
knowledge Awareness Tourism Impacts Direct spend Job creation
Infrastructure investment Tourism Impacts Direct spend Job creation
Infrastructure investment
Slide 26
26 The Role of Business Events in Enhancing Innovation
(Continued) Enhance science and technology: which helps generate
new forms of technology itself improves understanding and access to
it helps improve local knowledge and skills by bringing outside
information and technology into the host community providing a
vehicle for local businesses and professionals to access the latest
developments in their respective fields. Promote cultural exchange
by providing forums and new opportunities to expose local culture
to national and international audiences.
Slide 27
27 Industryscience relationships and Face-to-Face
Networking
29 A Framework for Enhancing Innovation through Face-To- Face
Business events ASSOCIATION CONFERENCES CORPORATE MEETINGS &
INCENTIVES EXHIBITIONS GOVERNMENT MEETINGS Income generator for
non-profit organisations Development of industry positions and
policy Media profile of key community-related issues Knowledge
dissemination within sectors Release of new research Collaboration
between colleagues Community outreach programs New members OUTPUTS:
INNOVATION, TRADE, EDUCATION, PROFILE, PRODUCTIVITY, ORGANISATION
CHANGE Performance reward Collaboration on new products/services
Problem-solving Corporate plans Information Product promotion
Motivation Team building Work skills training Improved
organisational performance Improved individual performance Business
investment Identification of product gaps in market New contacts
and collaborations Export markets Future business leads Sales New
products and services to market Encouragement of investment and
business migration Collaboration on common interests Information
exchange Trade negotiations Influencing national &
international policy Australias international diplomacy and profile
Participants Academics Professionals Non-profit organisation hosts
Sponsors Government representatives Universities Media Academics
Professionals Non-profit organisation hosts Sponsors Government
representatives Universities Media Categories Outcomes Employers
Employees Distributors/franchisee s Corporate guests Sponsors Media
Employers Employees Distributors/franchisee s Corporate guests
Sponsors Media Exhibition owners Visitors Exhibitors Sponsors Trade
delegations Media Exhibition owners Visitors Exhibitors Sponsors
Trade delegations Media Government host Ministers Parliamentarians
Bureaucrats Visiting heads of state & delegations Diplomats
Media Government host Ministers Parliamentarians Bureaucrats
Visiting heads of state & delegations Diplomats Media
Destination / tourism outputs eg: Hotel beds Airline seats Venue
space F&B services Shopping Event managers & suppliers
Ground transport Pre and post touring Repeat visitation
Accompanying persons activities
Slide 30
30 Relationships and Innovation from Business Events Clusters
Innovation Increased Membership; Increased Income Facilitates and
underwrites meetings Contribution to Science and Technology in
Destination and Broader Community Legacies Business Events (BE)
Delegates Employers Host Destination Host Organisation Post Event
Collaboration Further spin- off BEs to: disseminate new information
launch new products to market. Further spin- off BEs to:
disseminate new information launch new products to market. Contacts
Approve attendances Improved Sales Attendance Speaking Knowledge
Contacts Employment Opportunities Professional Development Setting
Facilities Expertise Profile Short term tourism impact Investment
Business Development for Destination
Slide 31
31 Four Dimensions that Underpin Value Value to attendees Value
to employer organisations Tourism value Largely under control
although standardisation needed Broader contribution to the host
economy
Slide 32
32 Value for Attendees & Employer Organisations Business
events too often portrayed as paid holidays in exotic locations
Many in the community have been to events like this which underpins
their scepticism regarding the value of business events Many events
are held and/or attended through habit Often there is no clear
purpose or take-away from the event How can one determine whether
it is worthwhile?
Slide 33
33 Return on Investment (ROI) Substantial effort has been made
to adapt ROI technique to business events An excellent technique
for assessing and enhancing the value of business events to
attendees and employers Essential that all business events have a
clear purpose with strong take-aways for attendees that are
communicated throughout the event and reinforced afterwards. ROIs
need to be undertaken on a regular basis
Slide 34
34 ROI (Continued) Although it requires some effort to
calculate the ROI, it has been shown to enhance performance and
output The combined value of ROI across attendees and employer
organisations is generally substantial and a useful inclusion in
the total value of the business event
Slide 35
35 Broader Contribution to the Host Destination Showcase of
local expertise Provide locals with access to international
expertise Fosters innovation within the host community Sales and
investment potential These contributions are both real and
substantial but they are difficult to quantify.
Slide 36
36 Melbourne Convention and Visitors Bureaus Holistic Value of
Business Events Study Two year study tracking 4 business events
held in Melbourne Full economic evaluation at the end of each event
Follow up with key stakeholders for each event at 6 monthly
intervals Document the flow-on benefits
Slide 37
37 Key Benefits To Date (Participants and Suppliers) Developed
new business relationships Experienced an increased profile of
expertise Gained information that will enhance personal or business
performance Received expressions of interest from potential
customers or investors Increased market and/or competitor knowledge
Improved business practices Collaborative research
opportunities
Slide 38
38 Where to from here? Promote the tourism value of business
events as the tip of the iceberg Actively promote the beyond
tourism benefits of business events Innovation resonates with
government Document examples of benefits to destinations
Slide 39
39 Opportunities for Boston Already a leading centre in a wide
range of areas including technology, life sciences and education.
Associations are increasingly wanting to hold events where there is
local expertise not just tourism activity Outstanding universities
and a highly qualified local population, which underpins research
conferences American universities more attuned to this area
Business Event collaboration creates clusters that often lead to
spin offs or new starts
Slide 40
40 Sustaining and Enhancing a Leadership Position for
Massachusetts in IT, Communications and Defence (June 2008) The
vitality of the Massachusetts high-tech sector is critical to the
states future and three initiatives have been identified to achieve
this: 1.Talent Initiative Develop and maintain a highly skilled
talent based focused on technology based clusters; 2.Innovation
Initiative Reignite the Massachusetts innovation engine through
expanded university-industry collaboration; 3.Massachusetts ITCD
Attractiveness Initiative Make Massachusetts the premier state for
launching and growing a high-tech business. Business Events could
underpin all of the above initiatives
Slide 41
41 Opportunities for Boston Demonstrate way that Business
Events achieve existing city goals Create satellite events to
maximise benefits for local business Enhance relationships across
the city Relationships are key Consider a Club Boston amongst key
researchers & industrialists Track spin off benefits for the
city
