Australia’s international business events sector: the economic and strategic value proposition Association of Australian Convention Bureaux Inc. (AACB)

May 2014

Liability limited by a scheme approved under Professional Standards Legislation. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. © 2014 Deloitte Access Economics Pty Ltd

Contents Key findings................................................................................................................................ i

1 Introduction .................................................................................................................... 5

2 International business events .......................................................................................... 7

2.1 Measuring the value of business events ............................................................................ 7

2.2 Value of international business events .............................................................................. 8

2.3 Australia’s convention bureaux ......................................................................................... 9

2.4 Impacts beyond the visitor economy ............................................................................... 12

3 Strategic imperatives..................................................................................................... 14

3.1 Drivers of industry growth .............................................................................................. 14

3.2 Proximity to a growing Asian economy ............................................................................ 16

3.3 The challenge ................................................................................................................. 17

3.4 The imperative................................................................................................................ 20

Appendix A : Australia’s convention bureaux ........................................................................... 21

Appendix B : Supporting definitions ........................................................................................ 22

Appendix C : Supplementary data and charts .......................................................................... 23

References .............................................................................................................................. 24

Limitation of our work .......................................................................................................................... 26

Charts Chart 2.1 : International business events, 2009-2012 ................................................................ 8

Chart 2.2 : International delegate days and expenditure, FY 2008-2013 .................................. 12

Chart 3.1 : Market share of International Associations Meetings (selected countries) ............. 18

Chart 3.2 : Market share of International Associations Meetings (selected regions)................. 18

Chart 3.3 : Total value of international bids lost, FY 2008-2013 ............................................... 19

Chart C.1 : International bids (won and placed), FY 2008-2013 ................................................ 23

Australia’s international business events sector: the economic and strategic opportunity

Tables Table 1.1 : Tourism 2020 strategic areas of focus ...................................................................... 5

Table 2.1 : Average yield by international visitor, 2012 .............................................................. 9

Table 2.2 : Convention bureaux international bid performance, FY 2009-2013 ........................ 11

Table 2.3 : Average yields among international delegates, FY 2008-2013................................. 11

Table 3.1 : International business events across the 5-pillar economy ..................................... 15

Table C.1 : Average yield of all business events delegates, 2009-2012 ..................................... 23

Table C.2 : Average yield of international business events delegates, 2009-2012 ..................... 23

About this report

This report has been prepared by Deloitte Access Economics for the Australian Association of Convention Bureaux. It draws on data sourced from a variety of repositories, as well as anecdotal evidence collected from industry, to demonstrate the economic and strategic value proposition of Australia’s international business events sector. This is just one component of the total business events sector. All findings should be interpreted and utilised in light of the analysis provided in the full report.

Australia’s international business events sector: the economic and strategic opportunity

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Key findings This report focuses on the economic value of international business events facilitated by Australia’s network of convention bureaux – this is a subset of the broader business events sector, which is referenced in early parts of this report for context and comparison.

Direct economic value

The business events sector is a high-value, fast-growing component of Australia’s visitor economy –

• One in five dollars spent by international visitors in Australia is spent by an international visitor attending some form of business event.

• Expenditure by international business events delegates generated an estimated $2.2 billion in GDP and 22,500 jobs in 2012 (noting that convention bureaux contribute to these figures through international marketing activities, often in partnership with Tourism Australia and industry).

• International business events delegates spend, on average, 21% more than other international visitors over the course of their trip – and 77% more per day (see Chart i).1

• Days by international business events delegates have grown at twice the pace of overall visitation over the last four years, while expenditure has grown nearly five times faster.

The business events sector also augments economic activity well beyond directly measurable metrics, underpinning knowledge creation and exchange, innovation and investment, among others positive impacts – economic value referred to as ‘beyond tourism’ benefits.

• International business events bring international expertise and world-best practices to Australia, while attracting skilled migrants by showcasing Australian education and business possibilities.

Chart i: International visitor yield comparisons, 2012

1 Comparison excludes international students.

$2,960

$149

$2,456

$84

Per trip Per day

International Business Events All International Visitors

+ BTB

+ BTB

Australia’s international business events sector: the economic and strategic opportunity

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Source: Deloitte Access Economics, based on TRA data. BTB refers to ‘beyond tourism benefits’. International visitors whose reason for travel is education are not included as their average expenditure and duration of stay skew yield numbers.

Australia’s convention bureaux are instrumental to the performance of the business events sector, working to secure, facilitate and support major business events, while also marketing their city, region and Australia as a leading business events destination.

• Visitors attracted to business events facilitated by Australia’s network of convention bureaux are a high-yield subset of the broader business events visitor market.

• Those visitors whose primary purpose of travel is attending a conference or convention spend nearly three times that of average international visitors ($236 per day).

• Noting the role played by convention bureaux in contributing to the generation of the $2.2 billion in GDP referenced above, international business events secured through convention bureaux business development activities alone in FY 2013 contributed an estimated $241 million to the nation’s GDP and generated 2,460 jobs.

• In FY 2013, the nation’s convention bureaux secured 356 international business events, or 68% of those bid for – a success rate which has remained relatively stable over the last four years.

• Despite maintaining its bid success rate, the number of delegate days secured by the industry has recently fallen, as competition for international business events has increased.

Policy alignment

There is also a significant level of alignment between the endeavours of convention bureaux and the strategic imperatives of industry and government.

• The trajectory and focus of convention bureaux activity is aligned with both industry targets – that is, Tourism2020 – and the strategies of Australia’s business and political leaders.

• The endeavours of convention bureaux – that is, the types of events they are targeting – can be readily refocused to support the priorities of government and business as these priorities shift over time.

Indeed, the activities of convention bureaux work to directly augment several of the Australian Government’s stated policy priorities and imperatives2, including:

• Building a stronger, more productive and more diverse economy

• The tourism expenditure generated by the pursuits of Australia’s convention bureaux – as outlined above – contributes materially to the nation’s economic growth.

• Innovation – one of the key drivers of productivity – is stimulated through the endeavours of convention bureaux via the creation of knowledge and the exchange of information and ideas that major business events facilitate.

2 As outlined in Our Plan, Real Solutions for All Australians: the direction, values and policy priorities of the next

Coalition Government.

Australia’s international business events sector: the economic and strategic opportunity

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• Another key productivity driver is human capital – people and skills – and business events are a direct means of professional development by exposing members of the Australian labour force to international expertise and best practice.

• The diversity of the Australian economy is fostered and advanced through convention bureaux activities via the introduction of new technologies, ideas and networks that major business events facilitate.

• Delivering more growth from Asia

• Delivering more growth from Asia requires deepening our economic understanding and strengthening our economic ties.

• Major international business events are a demonstrated mechanism for establishing and expanding professional networks, promoting cultural exchange, building relationships and economic linkages and promoting Australia as a destination to invest, live and do business in.

• Today, 30% of international business events delegates are from Asia – and the growth prospects are greater than any other market. Delegates from Asia/Middle East represent the fasting growing cohort of international meeting participants since 1998, representing almost 20% of total participants in 2012 – second only to European delegates.

• Building a diverse, world-class 5-pillar economy – by building our strengths in Manufacturing Innovation, Advanced Services, Agriculture Exports, world-class Education and Research, as well as boosting Mining Exports.

• The portfolio of business events that Australia currently hosts is broader-ranging in its industry representation, covering all five pillars. Looking ahead to 2020, convention bureaux have already secured a recorded estimate of 265,316 delegates across 278 international business events (amounting to approximately 1.1 million days).

• Of this, 206,756 delegates (amounting to approximately 911,794 delegate days) relate to international business events falling under the five pillars – with a recorded estimate of 114,798 delegates expected to arrive from overseas (amounting to approximately 506,259 delegate days).

• Perhaps more significantly, convention bureaux can help drive the policy and strategic focus of governments by directly aligning the business events they bid on with the priorities of government – be that at an industry or geographic level.

• Delivering stronger and better communities

• A key plank of community strengthening is promoting growth and development in regional Australia.

• The endeavours of convention bureaux support regional development through two key channels: First, through securing satellite events for regional locations; and, second, through facilitating pre- and post-event touring by delegates. 26% of business events delegates are accompanied by at least one family member; and nearly 60% of delegates are likely to return to Australia for either business or leisure within two years.

• While most international business events are held in capital cities, 46% of all business events delegates participate in pre- or post-event tourism, much of which is in regional Australia.

Australia’s international business events sector: the economic and strategic opportunity

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• The success of capital city venues in securing international business events also increases the likelihood that domestic business events will be encouraged to regional locations, bringing economic benefits with them.

Opportunities and imperatives

Looking forward, the economic opportunity in the international business events market is a significant one – and, moreover, one that Australia is well placed to capitalise on given our facilities and expertise; attractive tourism assets; and, proximity to fast-growing Asia.

However, there are challenges afoot – the global business events market is an increasingly competitive one.

• Growing international competition for the staging of business events, particularly in the form of subvention funding by governments in Asian Pacific and Middle East destinations, is contributing to the decline in Australia’s share of the international meetings market.

• Maintaining and enhancing Australia’s position as a leading business events destination will require increasing focus and effort from both industry and government.

There are sound economic arguments to justify support of convention bureaux endeavours by all levels of government – arguments which are strengthened in light of both the opportunities and challenges the sector is currently confronting.

Deloitte Access Economics

1 Introduction In December 2011, ‘Tourism 2020’ signalled Australia’s new national strategy to improve growth and competition in the tourism industry. Geared towards achieving Australia’s ‘2020 Tourism Industry Potential’ to increase overnight delegate expenditure to $140 billion by the year 2020, the strategy laid out an industry and government focus on six strategic areas (see Table 1.1).

Table 1.1: Tourism 2020 strategic areas of focus

Grow demand from Asia Build competitive digital capability

Encourage investment and implement the regulatory reform agenda

Ensure tourism transport environment supports growth

Increase supply of labour, skills and indigenous participation

Build industry resilience, productivity and quality

Source: Department of Resources, Energy and Tourism 2011.

Fully endorsing Tourism 2020, the business events sector has committed to increasing overnight business event delegate expenditure to $16 billion by the year 2020. In 2013, business events overnight delegate expenditure amounted to $13 billion, exceeding projected estimates by more than $3 billion (Business Events Australia 2013). 3 This figure was below estimates developed by the Tourism and Transport Forum (TTF) (2013) which put the total value of business events at $23.6 billion in 2012 – a figure forecast to grow to $31.1 billion by 2020. The difference between the two estimates reflects the broader definition employed by TTF (i.e. whereby economic benefit is not limited to overnight visitor expenditure).

The business events 2020 target followed the launch in October 2008, of the business events sector’s own national strategy – ‘A National Business Events Strategy for Australia 2020.’ Intended to be viewed alongside Australia’s long-term tourism policy direction, the business events strategy also identified a number of key focus areas that reflect and enhance Tourism 2020 priorities.

Australia’s convention bureaux are significant to the growth and competitiveness of the business events sector and, therefore, to the achievement of Tourism 2020. Convention bureaux bid for business events and market their city, region and Australia as a world-class leading business events destination.

Those convention bureaux successful in their marketing and bidding campaigns facilitate increased business event delegate expenditure for their city or region. Securing business events is also likely to increase overall visitor economy expenditure as, according to Deery M et al (2005), around:

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46% of business events delegates participate in pre- and post-event tours around regional and metropolitan Australia;

26% of business events delegates are accompanied by at least one family member or friend; and

60% of business events delegates are likely to return to Australia for either business or leisure within two years.

Such characteristics are indicative of why the business events sector is identified as one of the most valuable segments of Australia’s visitor economy. The remainder of this report examines the activities of Australia’s convention bureaux and the economic and social value this generates.

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2 International business events This section – and the remainder of this report – focuses on the value of international business events delegates to the Australian economy. It analyses the value of international business events delegates generally, before honing in on the activity facilitated by convention bureaux.

2.1 Measuring the value of business events

There are several ways to measure the contribution of business events to the Australian economy (Business Events Australia 2013):

Visitor delegate expenditure: these are international and national business events delegates, including those travelling over 50 kilometres for a day trip, as measured by Tourism Research Australia’s International and National Visitor Surveys. In 2012, total visitor delegate expenditure amounted to $13 billion (representing the Tourism 2020 performance indicator).

All delegate expenditure: the sum of visitor delegate expenditure and those business events delegates travelling less than 50 kilometres.

Total business events expenditure: the sum of all delegate expenditure and other expenditures including event expenses, registration and entertainment.

Entire business events benefit: in addition to total business events expenditure, this measure includes the indirect contributions of business events – i.e. the beyond tourism benefits (BTB) – including knowledge transfer and innovation, which are difficult to quantify (see section 1.3).

Figure 2.1 diagrammatically presents the complete set of measures that describe the contribution of business events to the Australian economy.

Figure 2.1: The value of business events

Source: Deloitte Access Economics 2014, based on Business Events Australia 2013

Indirect effects of business events(e.g. business deals, knowledge transfer, innovation)

Visitor delegate

expenditure(including day trip > 50km)

Other delegate expenditure(day trip < 50km)

Other non-delegate expenditure

(e.g. registration, venue hire)

Entire business events benefit

($ + BTB)

Total business events expenditure

($)

All delegate expenditure

($)

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2.2 Value of international business events

Business event delegates constitute a valuable part of the Australian international tourism market. In 2012, Australia received more than 900,000 international business events delegates, who collectively spent over $2.7 billion. The employment and economic activity generated by this expenditure is estimated at 22,500 jobs and $2.2 billion in GDP (noting that convention bureaux contribute to these figures through international marketing activities, often in partnership with Tourism Australia and industry). International delegates attending some form of business event represented 17% of all international visitors to Australia and 21% of all international visitor expenditure (Deery 2013, TRA 2013).4

Since 2009, the number of international business events delegates has risen by 21% (compared with 10% for all international visitors), with delegate days increasing by 39% and international delegate expenditure by 50% (see Chart 2.1). This growth has seen the sector considerably outpace broader international tourism growth (during the same period, the number of all international visitors rose by around 10%, with visitor days increasing by 17% and visitor expenditure by 10%) (TRA 2013).

Chart 2.1: International business events, 2009-2012

Source: Deloitte Access Economics 2014, based TRA 2013. Business events delegates are those delegates aged 15 years or over attending a conference/convention/seminar, trade fair/exhibition, incentive trip or business meeting.

Compared with other international tourists, international business events delegates are high yielding (see Table 2.1). Their average spend per trip in 2012 was $2,960, 24% higher than that of visitors to Australia for the purpose of a holiday and 80% higher than the average per trip spend of those visiting friends and family.

While higher per trip spending is attributed to visitors to Australia for education or employment purposes, international business events delegates had the highest average daily spend ($149) in 2012 – 77% higher than the per day spend of the average international visitor.

4 Comparisons exclude international students.

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Table 2.1: Average yield by international visitor, 2012

Visitor type Per trip ($)

Yield difference*

(%)

Per day ($)

Yield difference*

(%)

Education $16,108 -82% $114 31%

Employment $8,897 -67% $75 99%

Business events $2,960 - $149 -

Holiday $2,389 24% $89 67%

Visiting friends and family

$1,647 80% $58 157%

All international visitors**

$2,456 21% $84 77%

*Yield difference measures the relative difference in per trip and per day expenditures between business events delegates and each visitor type. ** International visitors whose reason for travel is education are not included as their average expenditure and duration of stay skew yield numbers. Source: Deery2013; TRA 2013.

At the regional level, the majority of business event activity takes place in Australia’s capital cities for international business events delegates. The proportion of international delegates attending a business event held in a capital city in 2012 ranges from 94% (Melbourne) to 66% (Brisbane) across Australian States and Territories5, highlighting a strategic opportunity for federal government to encourage – through the provision of bid support – the staging of international business events in regional destinations.

Helping to build stronger regional communities

The value generated by international business events that are held in regional communities across Australia is significant. For example, in 2013, Cairns hosted the Conference of the International Confederation of Principals, which expected to see 3,500 delegates contributing $13 million in expenditure.

In 2008, Melbourne was hosted the Amway Greater China Leadership Seminar, which was attended by 7,200 delegates. The economic contribution to regional Victoria, including Phillip Island and Ballarat, amounted to more than $2 million (BECA 2011).

2.3 Australia’s convention bureaux

Australia’s convention bureaux are significant to the growth and competitiveness of the nation’s business events sector. Convention bureaux undertake various activities, which include bidding for business events, marketing their city, region and Australia as a world-class leading business events destination, organising road shows and professional development programs, delegate boosting and conducting sector research (Business Events Industry Strategy Group 2008).

The activities of the convention bureaux – i.e. securing the attendance of business events delegates – markedly contributes to the utilisation of Australia’s tourism infrastructure, facilitating the achievement of a return on substantial publicly funded investments.

5 TRA 2013, unpublished data.

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Benefits will also accrue to various private investors, including airline operators, taxi licence holders and retailers.

This section demonstrates the economic contribution of the international business event facilitation activities of Australia’s bureaux – which is a subset of the broader international business events sector. The scope of the analysis is limited to convention bureaux members of the Association of Australian Convention Bureaux Inc. (AACB) (see Appendix A for a list of AACB member convention bureaux).

About the AACB

The AACB is a network of Australian business events convention bureaux committed to strengthening the growth and competitiveness of Australia’s business events sector, guided by its vision to drive economic prosperity for Australia.

Comprising of 15 city and regional convention bureaux in FY 2014, the AACB is dedicated to identifying and addressing opportunities and issues pertinent to the business events sector. Its goals are to:

Ensure that the role of business events is understood and that it is recognised as a key contributor to Australia’s visitor economy.

Advocate for positive government (and government agency) policy and funding arrangements that support economic growth through the business events sector.

Facilitate the transfer of knowledge and professional development of AACB convention bureaux staff.

The convention bureaux are drivers of business events being staged in Australia, and their activity is underpinned by a combination of public and private funding. In FY 2013, convention bureaux slightly over 70% of its funding from the public sector (including 60.6% in State Government funding and 11.7% in Local Government funding) with the remainder comprising of private sector funding (inclusive of 10.4% in membership funding and 5.6% in Co-operative Program funding).

International bid performance

Table 2.2 presents the international bid performance of convention bureaux since FY 2009. In FY 2013, a total of 522 international business event bids were decided (noting that this includes bids submitted from the previous year), of which 356 were won by convention Australian bureaux. This represents a bid success rate of 68% – a figure which has remained relatively stable over the last five years.6

6 AACB describes the bid success rate as a productivity measure – a percentage derived from the number of bids won in a financial year (that were submitted in that financial year and the previous financial year) divided by the number of bids submitted in that financial year that reached a decision in that same financial year.

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Table 2.2: Convention bureaux international bid performance, FY 2009-2013

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

International bids

Bids decided 297 363 509 569 522

Bids won 196 247 321 359 356

Bid success rate 66% 68% 63% 63% 68%

Source: Deloitte Access Economics 2014, based on AACB data

A decided bid occurs when a business event organiser declares the awarding of a scheduled event to one of the bid destinations, made on behalf by a convention bureau, irrespective of when the actual bid was submitted.

Delegate expenditure

Tourism Research Australia data shows that international visitors who indicated “convention/conference” as their main reason for visiting Australia in 2012 are associated with an average per day spend of $236 – nearly three times that of an average international visitor. Modelled expenditure data prepared for AACB shows per visitor expenditure of delegates attending events secured by the bureaux to be considerably higher than this figure – in excess of $600 per night (Table 2.3). The anticipated average delegate spends per trip and per night from bids won for international business events held in Australia remained relatively stable from FY2008 to FY2012, before dipping in FY 2013. The dip in the most recent year is predominantly reflective of a fall in the average size of events secured.

Table 2.3: Average yields among international delegates, FY 2008-2013

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

International bids

Per trip $2,655 $2,724 $2,689 $2,514 $2,671 $2,534

Per night $639 $644 $623 $632 $642 $609

Source: Deloitte Access Economics 2014, based on AACB data.

Overall value of activity generated

Chart 2.2 shows that despite Australia’s bid success rate being maintained, the number of delegates secured and the value of expenditure generated by convention bureaux has declined since FY 2009. This, in part, reflects a reduction in the number of bids submitted but, as noted above, is also a function of a fall in the average size of events secured. One explanation for this decline – discussed in Section 3.3 of this report – is the increasing levels of competition in the international business events market. As competition has grown, the events which convention bureaux have been able to competitively bid for have become both fewer in number and smaller in size.

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Chart 2.2: International delegate days and expenditure, FY 2008-2013

Source: Deloitte Access Economics 2014, based on AACB data. Business events refer to corporate meetings, corporate incentive trips, association conferences and exhibitions. Appendix C provides for AACB definitions of business event type and reporting methodology used to derive delegate, delegate night and expenditure numbers.

In FY 2013, around 115,000 delegates were expected to attend an international business event held in Australia in subsequent years as a result of international bids won (a 7% decrease since FY 2008), generating $292 million in expenditure (a 11% decrease since FY 2008). Deloitte Access Economics estimates that the international visitors expenditure generated by international business events bid wins in FY2013 – secured through convention bureaux business development activities alone – amounted to around $241 million in gross domestic product and generated 2,460 jobs (directly and indirectly).

2.4 Impacts beyond the visitor economy

In addition to the contributions generated through delegate expenditure, business events are considered to impact the Australian economy more broadly. Jago and Deery (2010 p7) explain that “[b]usiness events are key tools in the knowledge creation and dissemination processes that are so fundamental to underpinning innovation.” The Joint Meetings Industry Council’s7 publication in 2009, Key Messages for the Meetings Industry, identifies a number of indirect benefits associated with the staging of business events, including:

attracting investment and creating other business opportunities;

enhancing professional development by providing exposure to regional and international expertise;

improving science and technology and disseminating knowledge and ideas; and

promoting cultural exchange.

Other research exploring the wider impacts of business events include Oxford Economics (2009), which found that “for every dollar invested in business travel, companies realise $12.50 in incremental revenue” and “that the average business in the US would forfeit 17% of its profits in the first year of eliminating business travel” (cited in Jago and Deery 2010).

7 The Joint Meetings Industry Council is the peak body of the meetings industry at the international level.

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In Australia, a 2011 study conducted by the Melbourne Convention Bureau (MCB) found that 54% of survey respondents established new business relationships and 69% felt their profile of expertise had strengthened. Business Events Sydney (2012) found that the majority of respondents believed that business events helped build knowledge and capabilities and contributed to increased sales, domestically and abroad.

There is growing recognition of the indirect benefits associated with the staging of business events. However, quantifying these benefits, and linking them to a particular business event, remains difficult to do.

Anecdotal evidence of the indirect benefits of international business events (MCB 2013)

36th International Conference on High Energy Physics (2012) – “There has been a step up in interest from international students wanting to come and do research work to do higher degree.” – Professor Geoffrey Taylor

25th General Assembly of International Union of Geodesy & Geophysics (2011) – “It showcases your own science…[and brings]…the world’s best here to discuss cutting edge science and to be able to help develop Australia’s profiles in these research fields. This applies particularly for our research students who often have limited opportunities to go to conferences overseas...One of the major outcomes of a truly interdisciplinary and international conference like this is the opportunity for everyone to network and build their researchers networks.” – Professor Ray Cas

14th International Conference on Functional Mapping of Human Brain (2008) – “Outcomes that rose from the Victorian Science Agenda Grant, Monash’s investment, and the rise of Victoria’s profile include 15 new positions created in biomedical imaging at Monash, the recruitment of a new neuropsychiatry research group of 15 researchers to Monash, obtaining approximately $3 million of research funding in biomedical imaging research from the NHMRC and ARC competitive grants schemes for 2012 and 2013, and successfully establishing R&D partnerships with major international companies having R&D labs in Victoria.” – Professor Gary Egan

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3 Strategic imperatives Australia’s business events sector is a significant part of the nation’s visitor economy. It is a sector which attracts some of the highest spending visitors to the country and one which, over recent years, has grown considerably more rapidly than the broader tourism industry.

Australia has a number of strengths on which to consolidate its reputation as a premier business events destination and capitalise on the strong growth in business events that is forecast. The key strengths that the business events sector can leverage include (TNS 2012 - unpublished; Business Events Strategy Group 2008):

Experience and expertise: Equipped with high quality facilities, experienced associations and developed corporate meeting and incentive markets, Australia has a strong reputation for consistently delivering creative and well managed business events. In addition, Australia has recognised world leaders in a variety of fields – including medical research, renewable energies and water resources management – making it well placed to host events in a wide range of industry sectors.

Business security and trade: Australia is considered to provide a secure and transparent business environment that is based on internationally recognised legal practices, developed corporate governance and high quality infrastructure. In addition, Australia is an open and dynamic trading economy, with competitive strengths in natural resources exports, facilitating exciting business opportunities to attract delegates from across the country and around the world.

A unique natural and cultural environment: Australia boasts a diverse offering of World Heritage sites and an appealing climate during colder periods in the Northern Hemisphere. In addition, Australia is both an English-speaking and multicultural country, enabling it to facilitate effective communication and knowledge transfer, while accommodate for diverse cultural, religious and dietary needs.

3.1 Drivers of industry growth

International business events are highly effective vehicles for driving industry growth in Australia – an opportunity not yet fully realised. What makes them effective platforms to help grow Australia’s economy – both in terms of GDP and employment – is their ability to deliver those benefits that are beyond traditional tourism spends (e.g. travel and hospitality expenditures) (BECA 2011). Notably, international business events can facilitate the strengthening of Australian industries by their unique ability to:

bring international expertise and world-best practices (i.e. attracting global talent);

attract skilled migrants by parading Australian education and business possibilities;

identify industry trends, innovations and strategic targets;

cultivate business relationships;

stimulate trade; and

expand the country’s export markets.

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Strengthening Australian industries

Growing our exports: Info Salons Australia Pty Ltd, a specialist in automated registration systems to the exhibition industry (a subsector of the business events industry), introduced their IT products and services into the Asian market on the back of the growing global exhibitions industry. With multiple overseas offices, including one in London, the company employs 150 permanent staff and derives around 40% of its revenues from offshore markets (BECA 2011).

Bringing the world’s best to Australia: The 22nd International Conference on Atomic Physics held in Cairns in 2010 saw three Nobel Laureates discuss the latest advances in atomic physics - one of which undertook a visit to Cairns State High School to meet with students. Following the conference, many international delegates toured the laboratories across Australia, resulting in significant exposure for the Nation’s research (BECA 2011).

The portfolio of business events that Australia currently hosts is broad-ranging in its industry representation, covering all five pillars of the Nation’s economy.8 Convention bureaux have already secured an estimated 265,316 delegates (amounting to approximately 1,180,656 days) for international business events from September 2013 to the year 2020. A significant number of these delegate – 206,756 delegates (amounting to approximately 911,794 delegate days) relate to international business events falling under the five pillars, with an estimated of 114,798 delegates expected to arrive from overseas (amounting to approximately 506,259 delegate days).9

Table 3.1 provides examples of specific international business events across each pillar, demonstrating the sizeable number of business events delegates that a single business event can attract, particularly from overseas.

Table 3.1: International business events across the 5-pillar economy

Pillar Event Year International delegates

Total delegates

Manufacturing Innovation

International Joint Conference on Artificial Intelligence

2017 450 1,000

Agricultural Exports 29th International Horticulture Congress

2014 1,750 2,000

Advanced Services 22nd

World Diabetes Congress

2013 5,635 12,500

Education and Research

9th International Convention of Asia Scholars

2015 500 1,000

Mining Exports International Conference and Exhibition on LNG

2016 2,800 5,000

Source: Deloitte Access Economics 2014, based on AACB data.

8 As outlined in Our Plan, Real Solutions for All Australians: the direction, values and policy priorities of the next Coalition Government.

9 Delegates are assumed to attend all days of the staged business event. Further, delegate days do not include

pre- and post-tourism days.

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Strong global trends in the international association meetings market across the 5-pillars further enhance the potential value of a collaborative convention bureaux-Federal Government partnership. Between 2008 and 2012, the international association meetings market saw medical sciences, technology, education, commerce, agriculture, science, transport and communication and ecology and the environment represent just over 62% of meeting subject matter (ICCA 2013).

Convention bureaux can help realise Australia’s economic potential by directly bidding for events which align with areas of expected economic growth. That is, to the extent that Australia is looking to expand its knowledge of, or economic linkages with, an industry sector, convention bureaux can secure business events within this sector to facilitate this. Securing events in fast-growing segments of the global economy can serve as a strategy for augmenting Australia’s economic activity in these areas. A recent report by Deloitte, entitled Positioning for Prosperity? Catching the next wave, found gas, agribusiness, international education, wealth management and tourism to be sectors which would be both fast growing and aligned with Australia’s comparative advantage over the next two decades (Deloitte 2013).

Driving the oil and gas industry

In 2011, the Australasian Oil and Gas Exhibition (AOG) brought an estimated $10.1 million in expenditure to Perth. AOG allows Australian companies to promote a range of products and services, with surveys showing “the average total value of sales leads generated by each exhibitor was $911,000, pointing to an estimated $410 million in potential business written at the show.” Further, the AOG Careers Day, attended by more than 400 tertiary and 600 secondary students in 2011, informs students about a career in the oil and gas industry (BECA 2011).

3.2 Proximity to a growing Asian economy

Australia’s proximity to a growing Asian economy provides the Australian business events sector with a major strategic advantage, positioning it to serve as a gateway for Australian industries to access Asian markets, cultivate relationships with Asian business partners and drive industry growth in the region.

Participation in international business events by Asian (and by proximity, Middle Eastern) delegates continues to grow. The estimated Asia/Middle East share of total participants to international meetings has consistently grown since the early 1960s from 11.4% to 19.7% in 2012. Currently, only Europe has a larger share at 50.5% (ICCA 2013).

Delegates from Asia already represent a significant segment of the Australia’s business events sector, accounting for at least 30% of all international delegates who travelled to Australia for business including convention/conference as their main purpose of journey in FY 2013 (Business Events Australia 2013). However, the establishment of a competitive Australian business events sector among the Asian markets remains some way off.

Tourism Australia, together with key business events stakeholders, recently commissioned two separate research studies into the opportunities presented by the Chinese corporate

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meetings and incentives markets and associations market. China has been identified by the Australian business events sector as a platform from which it can access the rest of the Asian region. The studies conclude that Australia has a wide range of strengths to attract Chinese business events – many of which were discussed above.

Delivering growth from Asia

China’s corporate meetings and incentives market: In 2010, Chinese event buyers held on average 5.6 events (up from 3.7 events in 2009), with an average 200 of attendees, and responsible for 2.32 million RMB (a 34% increase in budget spend from 2009). Awareness of Australia as a destination for incentive trips and business events ranks highly compared to other countries within and outside the Asian region, including South Korea, the United States, Germany and the UK. Australia has strengths in innovative team-building activities, venue capacity, climate conditions and natural and cultural environment. Australia’s opportunities lie in improving its communications with Chinese agencies, with a focus on building selling points around delivering business results for event buyers (TNS Global 2011 prepared for Tourism Australia).

China’s associations market: There are almost 240,000 Chinese associations that collectively conduct 1.4 million events each year, representing 14% of the Chinese conference/events market. Almost all of these events are held domestically due to government restrictions. A small number of association members attend overseas events, but it is becoming increasingly popular to do so. Australia has strengths in venue quality and capacity, service capabilities and climate conditions. There are also developed trade and investment relationships between China and Australia. However, Australia is perceived to have weak relationships with Chinese associations. Key opportunities for Australia include improving communications with Chinese associations and increasing the number of Chinese delegates at Australian conferences (TNS Global 2012 prepared for Tourism Australia).

3.3 The challenge

Despite Australia’s strengths as a business events destination, the global environment for business events remains a challenging one.

Growing international competition for the staging of business events presents a challenge for the sector – one which, if not adequately addressed, could negatively impact the size of Australia’s share of the international business events market. For example, between 2008 and 2012, Australia’s share of the international associations market fell to 2.1% - ranking behind 13 other countries including the United States, United Kingdom, China, Japan and Brazil – from 2.4% between 2003 and 2007 and from 3.1% between 1998 and 2002 (ICCA 2013). In 2013, Australia’s international ranking further declined to 16th (ICCA 2014).

The concern of growing international competition for the staging of international business events is further demonstrated by reference to the international associations market. Chart 3.1 shows that Australia’s declining share of the international associations market since 1998 has been met with rises in market shares by both China and Korea. The nature

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of these trends is somewhat reflected when aggregating to world regions, with Oceania’s share declining and Asia/Middle East’s share rising since 1998 (Chart 3.2).

Chart 3.1: Market share of International Associations Meetings (selected countries)

Source: Deloitte Access Economics 2014, based on ICCA 2013

Chart 3.2: Market share of International Associations Meetings (selected regions)

Source: Deloitte Access Economics 2014, based on ICCA 2013

1.0%

1.5%

2.0%

2.5%

3.0%

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2%

4%

6%

8%

10%

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14%

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Oceania Asia/Middle East

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Countries from all over the world are increasingly aware of the benefits derived from hosting business events, having invested heavily, over the last decade, in business events infrastructure to heighten destination appeal (Business Events Industry Strategy Group 2008). Further, many international governments are (BECA 2013):

…providing subvention funding at a level which far exceeds that of Australian state and territory governments, reducing Australia’s competitiveness and ability to attract major international business events.

For example, in 2010, the Malaysia Convention & Exhibition Bureau has been provided with an annual $15.3 million funding increases from the national government pursuant to its Economic Transformation Plan to boost the number of its business events delegates. Malaysia is one of many Asian Pacific destinations, including Singapore, Hong Kong, South Korea and China that are increasingly receiving bid support funding from governments to strengthen their market share within the region (BECA 2013).

The challenges Australia faces are reflected in part in the bids that are unable to be secured and the reasons for this. As Chart 3.3 shows, the value of international bids lost declined considerably in FY 2009 and FY 2010 (compared to FY 2008), before rising sharply in both FY 2011 and FY 2012 and the falling again in FY 2013.

In FY 2013, the value of future business missed as a result of losing international bids amounted to an estimated $265 million in direct expenditure. The value of lost business is significantly larger when indirect contributions of staging business events are also factored. The value of lost business wasn’t as substantial in the following year (noting that this is partly attributable to there being a lower number of bids decided).

Chart 3.3: Total value of international bids lost, FY 2008-2013

Source: Deloitte Access Economics 2014, based on AACB data. Business events refer to corporate meetings, corporate incentive trips, association conferences and exhibitions. Appendix C provides for AACB definitions of business event type and reporting methodology used to derive delegate, delegate night and expenditure numbers.

Convention bureaux have identified several key reasons for losing international bids, with competitor subvention frequently cited (referring to the situation where the final decision is based on a stronger financial incentive or convention package offered by a competing destination). Other significant reasons for losing bids include lack of destination appeal and

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where final decisions influenced by geographic region preference and the location of where key executives and stakeholders are based.

Similar to the factors identified by the convention bureaux, TNS Global (2011) finds that considerations around time, distance and cost continue to challenge Australia when competing for business events in long-haul markets. Other challenges, particularly with respect to markets that Australia has traditionally performed well in include the ability to provide innovative business events marketing programs.

3.4 The imperative

The discussion above highlights that, in many respects, Australia is well positioned to capitalise on the expected growth from – in particular – Asia. At the same time, it underscores the challenges Australia faces; particularly in the form of well-resourced international competitors. Realising the growth opportunity and ensuring that the business events sector achieves its 2020 target will require continued focus from both industry and government. For its part, industry must continue to focus on targeting its efforts toward the growth opportunities, understanding the decision drivers for these markets and building the networks and relationships required to successfully secure events in an increasingly competitive environment.

At the same time, like many aspects of the tourism industry, there are strong economic arguments to justify governments’ direct support of the business events sector. The economic benefits that are generated by Australia securing international business events accrue disparately. It is not merely conference and convention facilities that benefit, it is airlines, taxi operators, hoteliers, restaurant owners and retailers; to name just the most major. While these economic spillovers can be addressed, in part, through industry agreements, such arrangements will invariably only be effective among larger operators. Given how widely the economic gains are diffused, direct support from government is required and, given the nature of the spillovers, can be justified at both the state and national level.

As competition in the global business events market in which Australia operates intensifies, the case for ensuring that there is strategic alignment across government and the convention bureaux and that the sector is adequately resourced will only strengthen.

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Appendix A: Australia’s convention bureaux The economic contributions demonstrated in Section 2.2 are representative of the following convention bureaux:

Adelaide Convention Bureau

Brisbane Marketing Convention Bureau

Business Events Cairns & Great Barrier Reef

Business Events Gold Coast

Business Events Sunshine Coast

Business Events Sydney

Business Events Tasmania

Canberra Convention Bureau

Mackay Convention Bureau (from FY 2010 to FY 2013)

Melbourne Convention Bureau

Northern Territory Convention Bureau

Perth Convention Bureau

Tourism Whitsundays Convention Bureau

Townsville Convention Bureau

Associate members of the AACB (but not included in the data analysis in this report) include:

Business Events Geelong

Newcastle Convention Bureau

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Appendix B: Supporting definitions AACB definitions of business event type:

Corporate meetings: in which the organiser represents a commercial entity. Corporate meetings have a strong professional or business rationale to visit a destination.

Corporate incentive: the common theme of incentive travel reward programs is that they present participants with unique experiences and recognition for high achievement. Being a recipient of an incentive travel award conveys status and prestige upon the winner.

Association conferences: the organiser represents an Association with members from more than one entity. Members share a common goal or purpose in which people elect to join, covers societies, educational institutions, social groups (e.g. annual convention).

Exhibition: an event that brings together suppliers of products, equipment and services in environment where they can display their products and services.

AACB methodology used to derive delegate, delegate night and expenditure numbers:

Delegates: this relates to the collective, expected delegate numbers that are likely to materialise in relation to the reported groups/events in the reporting period.

Delegate nights (or room nights/conference duration): the event duration should assume that actual nights of the conference would be equal to the number of days of the conference (it was agreed that members would continue to report on room nights rather than room days).

Delegate Expenditure Criteria: Delegate expenditure figures are separated into City Tiers based on convention centre size/population size. Delegate expenditure figures are then calculated by dividing: number of delegates / the total expenditure / average length of stay according to AACB Performance Report FY 2007 (4.0 nights). In some cases where the figures looked a bit odd, estimates were used and then averaged out.

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Appendix C: Supplementary data and charts

Table C.1: Average yield of all business events delegates, 2009-2012

2009 2010 2011 2012

Per trip $595 $592 $648 $643

Per day $225 $222 $244 $237 Source: Deery 2013

Table C.2: Average yield of international business events delegates, 2009-2012

2009 2010 2011 2012

Per trip $2,407 $2,533 $2,747 $2,960

Per day $138 $151 $157 $149

Source: Deery 2013

Chart C.1: International bids (won and placed), FY 2008-2013

Source: Deloitte Access Economics 2014, based on AACB data. Business events refer to corporate meetings, corporate incentive trips, association conferences and exhibitions. Appendix C provides for AACB definitions of business event type and reporting methodology used to derive delegate, delegate night and expenditure numbers.

188 174 163 151 149 141

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References Business Events Australia 2013, 2020 The business events sector progress report, http://www.australia.com/docs/business-events/TABE7879_BE_Sector_Progress_Report_July13(1).pdf, accessed 29 November 2013.

Business Events Australia, Conference or convention arrivals to Australia – June 2013 update, http://www.businesseventscouncil.org.au/performance-measures.html, accessed 29 November 2013.

Business Events Council of Australia 2013, Business events policy priorities: driving economic activity through business events, http://www.businesseventscouncil.org.au/files/TTF0754_BECA_Policy_Paper_FINAL.pdf, accessed 29 November 2013.

Business Events Council of Australia 2011, Business Events: delivering for Australia, http://www.businesseventscouncil.org.au/files/Business_Events_-_Delivering_FINAL_November_2011.pdf, accessed 29 November 2013.

Business Events Council of Australia 2009, Business Events Council of Australia (BECA) pre-budget submission2011-2012 to the federal government, http://www.businesseventscouncil.org.au/files/BECA_PBS_2011.pdf, accessed 29 November 2009.

Business Events Council of Australia 2009, Business Events Council of Australia (BECA) pre-budget submission to the federal government, http://www.businesseventscouncil.org.au/files/beca_pbs_feb_09.pdf, accessed 29 November 2009.

Business Events Industry Strategy Group 2008, A national business events strategy for Australia 2020, http://www.businesseventscouncil.org.au/files/BES%20full%20doc%20Nov08.pdf, accessed 29 November 2013.

Business Events Sydney 2011, Beyond tourism benefits: measuring the social legacies of business events, http://media.eventreport.it/media/attach/2012/02/BeyondTourismBenefitsMeasuringthesociallegacyofbusinessevents.pdf, accessed 29 November 2013.

Deloitte 2013, Position for prosperity? Catching the next wave, http://www.deloitte.com/view/en_au/au/news-research/luckycountry/index.htm, accessed 29 November 2013.

Deery M. 2013, State of the business events industry report 2012, http://www.businesseventscouncil.org.au/state-of-the-industry-reports.html, accessed 29 November 2013.

Deery M. et al 2005, The national business events study: an evaluation of the Australian business events sector, Common Ground Publishing, Victoria.

Department of Resources, Energy and Tourism 2011, Tourism 2020, http://www.ret.gov.au/tourism/Documents/nltts/2020/tourism-2020-strategy.pdf, accessed 29 November 2013.

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[ICCA] International Congress and Convention Association 2013, A modern History of International Association Meetings.

[ICCA] International Congress and Convention Association 2014, ICCA 2013 statistics: International association meeting sector continues strong growth, ICCA press releases, http://www.iccaworld.com/npps/story.cfm?nppage=4020, accessed 17 June 2014.

Jago L. & Deery M. 2010, Delivering innovation, knowledge and performance: the role of business events, http://www.aacb.org.au/files/The_Role_of_Business_Events_BECA.pdf, accessed 29 November 2013.

Liberal Party of Australia, Our plan – real solutions for all Australians, http://lpa.webcontent.s3.amazonaws.com/realsolutions/LPA%20Policy%20Booklet%20210x210_pages.pdf, accessed 29 November 2013.

[MCB] Melbourne Convention Bureau 2013, Club Melbourne Ambassadors study – results.

Melbourne Convention and Visitors Bureau 2011, The holistic value of events – interim report, http://www.melbournecb.com.au/portals/mcvb_com_au/documents/MCVB%20Beyond%20Tourism%20Interim%20Report%2013%20May%202011.pdf, accessed 29 November 2013.

Oxford Economics 2009, The return on investment of U.S. business travel, http://www.aacb.org.au/files/oxford_economics_study_09.pdf, accessed 29 November 2013.

Tourism Research Australia 2013, International visitors in Australia: December 2012 quarterly results of the International Visitor Survey, http://www.tra.gov.au/publications/publications-list-December-2012-Quarterly-Results-of-the-International-Visitor-Survey.html, accessed 29 November 2013.

Tourism Research Australia 2013, Travel by Australians: December 2012 quarterly results of the National Visitor Survey, http://www.tra.gov.au/publications/publications-list-December-2012-Quarterly-Results-of-the-National-Visitor-Survey.html, accessed 29 November 2013.

Tourism and Transport Forum 2013, The value of business events: measuring the value of the Australian business events sector, 2003-2020, http://www.ttf.org.au/Content/businessevents.aspx, accessed 29 November 2013.

TNS Global 2012, China – success by association, http://www.australia.com/docs/business-events/China_Success_by_associaton.pdf, accessed 29 November 2013.

TNS Global 2011, China – corporate incentives and business events. An incentive for progress, http://www.australia.com/docs/business-events/China_Corporate_incentives_and_business_events.pdf, accessed 29 November 2013. TNS Global 2011, There’s nothing like Australia for you next business event – selling business events in the international, http://www.australia.com/docs/business-events/Selling_business_events_in_the_international_market.pdf, accessed 29 November 2013.

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