MICE on the rise
We all take product exhibitions and trade fairs for granted as a normal feature of everyday business life. In GCC countries such as the UAE, Kuwait or Qatar they have been a normal part of business life for decades, but in Saudi Arabia, it is a relatively recent phenomenon – and thus a dynamic sector in full expansion.
Yet it is not as straightforward and simple to organise an exhibition here as might be expected. When the Riyadh Exhibition Company (REC) introduced the practice to Riyadh in the early 1980s, the first hurdle to take was as basic as the infrastructural issue: the company had to build its own exhibition hall. Other problems had to be overcome too: draconian visa restrictions were forcing exhibitors to cancel participation at the last minute, and adequate accommodation for exhibitors and visitors alike was few and far between. Moreover, the company could not just put on any show in the conservative atmosphere of Saudi Arabia's capital. Better to be safe than sorry.
Today, Riyadh's infrastructure has drastically improved at all levels, from airports, highways and hotel room availability to the brand new and gigantic Riyadh International Convention and Exhibition Centre (RICEC). Its first show, the Book Fair, was put on as recently as March 3rd, 2009, but the building was conceived long before that date. “The Chamber of Commerce adopted the plan to build a dedicated exhibition centre in the mid-nineties and construction started in 2005. This year, the Book Fair attracted almost a million visitors - as opposed to the couple of thousands which attended the first edition,” explains RICEC's CEO Abdullah Al Omran.
RICEC: attracting more MICE
RICEC´s curved roof, designed to resemble a sand dune, covers 30,000m², 15,000 of which are net exhibition area. The other half is taken up by supporting facilities: offices, warehouses, restaurants, reception lounges... The 190,000m² of land contain another 5,000m² open air exhibition space, a car park accommodating 1,500 cars, and a second, smaller building: the National Product Centre. “This 8,000m² building is used to support and complement the exhibition industry as a whole in KSA with permanent displays of products manufactured locally.” The main building is designed to be extendable with another 10,000m² of net exhibition area without interrupting its overall design. “We are planning to construct the additional space in five years' time,” says Al Omran; “Meanwhile, construction of our own four-star hotel on the grounds will commence in 2011. The hotel will offer 200 rooms and 12 suites and will be run by an international operator.”
RICEC currently has two main clients, the government and the country's leading private show organiser, the REC. “Apart from the Book Fair,” says Al Omran, “the government also organises an annual event where all the country's universities present themselves to prospective students. REC organises some 12 events every year, most notably Saudi Build and the Travel and Tourism Fair. Next to that, we have some ten smaller companies organising fairs and shows.” But the current number of business-to-business (B2B) and business-to-consumer (B2C) events is not sufficient. Says Al Omran: “There are two sectors which we specifically would like to entice: firstly, the oil and gas sector - which would attract many international visitors - and secondly the tourist industry and all its sub-sectors.”
PIONEERING AND LEADING: THE RIYADH EXHIBITION COMPANY
The country is fully aware of the growing worldwide MICE industry and its benefits to host countries. “We want to promote Riyadh as a city of the future, as the platform for the Gulf Region which will play the role Dubai used to do before the crisis - the port of entry and most popular business destination in the region,” explains Mohammad H. Al Hussaini, deputy general manager of REC. “At this juncture, KSA has the opportunity to grow fast and profile itself positively. We are now the only economically stable country in the region. Our financial situation has not deteriorated thanks to the prudent approach of the authorities and their strict regulation of the banking and investment sector. We can therefore still offer serious investment opportunities.”
Not surprisingly, already established regional exhibitions are now looking toward the Saudi market, moving their interests from Dubai or Abu Dhabi to Riyadh, not least because of the $400 billion's worth of infrastructural projects currently underway in the kingdom. Saudi Build, one of REC's flagship events, is attracting more and more attention. As a long-term player in the field and a certified member of the global association of the exhibition industry (UFI), REC has become the industry's undisputed leader. In all, the company has organised some 330 shows over the past 29 years, covering all economic sectors and involving participants from over 40 countries. REC currently employs 50 people in its Riyadh office and hires outside personnel for fairs as necessary.
The growth of the company's business is easily measured by the expansion of its exhibition space: REC's first hall was a relatively small hangar of some 15,000m² in the city centre. In 1984, the company had already upgraded to a larger 40,000m² space north of Riyadh. “We have had an average 10 to 15% year-on-year growth rate and right now we are building a new 80,000m² hall on land donated by the government with a financial injection from the Saudi Chamber of Commerce – which goes to show that both the government and the business community have recognised the importance of our work - and the boost it gives to the tourist industry in terms of numbers of visitors we bring into the country. Currently, the figures stand at between 3,000 and 5,000 per year, typically staying for up to seven nights,” says Hussaini. The trendy MICE industry moves millions around the globe and its attendants, considered business tourists, spend 30% more than regular tourists. The industry also offers unique opportunities to put destinations in the spotlight – which is precisely Saudi Arabia's intention.
Still, there are a number of restrictions that prevent the rapid expansion of the sector in the kingdom. A cumbersome visa process, limited exhibition space and relatively low availability of hotel rooms are some of the more urgent problems to overcome. In Al Omran's view, all restrictions on the development of MICE tourism are related in one way or another to infrastructure and organisation: “There is a mix of constraints - from the difficulty to obtain tourist visas via lack of transportation and accommodation all the way up to getting reliable and complete information about the entire country, its infrastructure and potential. We have everything in this country, from beaches to mountains, from deserts to lush green areas but who knows about this? And where is the infrastructure to go there, find accommodation and be entertained? It is no use to know you can visit Madain Saleh if you have to drive 1,500 kilometres in your own car, not knowing how far the next petrol station is and whether you can get a room in the one or two hotels in the area. And once you have seen the site you have to leave again because there is nothing else for you to do. All the sub-sectors and aspects of the hospitality and entertainment industry have to grow and develop together to create an adequate tourist environment.”
Nevertheless, argues Edouard Rabbat, Al Omran's colleague deputy general manager at REC, “The government is working to genuinely open up the country. It is the best of times to come to Saudi Arabia. Remember that when we started out, we first had to build theinfrastructure. Even in the early 1980s, the capital of the kingdom did not have a single exhibition hall. We had to deal with draconian visa restrictions that forced exhibitors to cancel participation at the last minute and with inadequate accommodation for exhibitors and visitors alike”. Moreover, the company - then still called al Dhyafa – could not just put on any show: fashion shows, for example, were out of the question (they still are), but other exhibitions too could be cancelled.
A DRAMATIC CHANGE
Nowadays the picture has changed dramatically and it is expected to keep on changing for the better. The obstacles that used to hamper expansion in the past gradually seem to get resolved. Visa restrictions are slowly being eased (although women under 30 still have to be accompanied by a male relative), up-to-standard hotel accommodation in the capital is growing at the rate of one or two major new hotels per year, and the traditionally strict and conservative Saudi society is - albeit in piecemeal fashion - coming to terms with the outside world.
“We have been in this business for almost thirty years now and by now the government agencies all know us and trust us. These bureaucratic problems are overstated anyway: many people complain, but then don't offer alternative solutions. If you come to the officials with a feasible solution, they will help you out”, explains Rabbat. “The rules and norms of Saudi society are actually changing rather fast now: two years ago a woman could not have sat in our office to talk to us as men. Today this is an accepted situation that causes no problems. Since about a year, men and women are allowed to work together in offices. These measures are not given much publicity - many people in the country may not even be aware of them - but they make a big change.”
Within the MICE industry in KSA, evolution is occurring too. In the early daysof exhibitors were mainly foreign companies, up to 70% to 80% of the total. “It was the beginning of the economic boom years in the kingdom and foreign companies were still looking for agents to represent them and give them access to the local market. Today, local companies tend to make up a large majority,” adds Rabbat.
The company has been taking care to stay in line with the government's economic and social priorities: “Currently, king Abdullah is prioritising the development of the health and education sectors, so we are concentrating our efforts on those fields”, says Rabbat. The most popular fair in terms of visitor numbers, however, remains the annual IT Show, while the fastest growing is Saudi Build. In fact, the MICE sector has grown so quickly that REC, once the only player in the field, now has to compete with some 250 licensed companies and individuals, although in actual practice only 20 to 25 major companies are active in the field. Consequently, more exhibition centres, as well as spaces for conferences and conventions, will be needed in the near future. REC itself has recently added a conference department to their company. “A conference with industry experts, government agents and academics adds a definite extra value to any trade exhibition, and this is the new international trend,” concludes Rabbat.
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