The MICE Industry Matures

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Penang prepares to host Meetings, Incentives, Conventions and Exhibitions.

A Subterranean Showcase

By all accounts, its landmark opening was a relatively small and private affair. The Setia SPICE Convention Centre welcomed employees of a green energy-based multinational corporation through its front doors on the first weekend of March.

The company’s annual dinner was held in the complex’s massive 48,000 sq ft ballroom – by far the biggest in the state. “We received our CCC (Certificate of Completion and Compliance) at the end of February, on schedule for us to open in March. We are already booked every weekend until the end of the year and even have events confirmed as far as 2019. The reception has been positive, and hopefully it will continue that way,” says SP Setia general manager (Property North) Ng Han Seong.

For the owner of an event venue that has already hosted an 8,000-person strong convention from China in its first month, Ng may sound overly cautious. The building of the entire SPICE project – now reaching RM350mil in expenditure – is no doubt an ambitious project, undertaken with precise planning and projections.

Broken up into five phases, construction began in 2011 with repairs and refurbishment works to the old Penang International Sports Arena (PISA) structure. A total of RM22mil was spent upgrading the venue, which was renamed the Setia SPICE Arena. “We never fully closed the arena for the repairs as there were events ongoing throughout the construction period. As a result there was a lot of ‘stop and go’, so we took some time to finish,” Ng says.

Now, the Setia SPICE Arena can sit up to 10,000 people terrace-style, house 180 exhibition booths and a further 250 booths on the level 3 concourse, retaining its reputation as the biggest event venue in the state.

The second stage of construction moved next door to the swimming pool. The pool had been shut since March 2010 due to a host of problems including leaking, and was long past its glory days of being a prominent sporting venue. It reopened as the Setia SPICE Aquatic Centre in January 2016.

“It now consists of a 10-lane Olympic-sized swimming pool with salt-water treatment and we’ve retained the 5m-deep diving pool. We also have the largest indoor splash pool for kids in the state, open to all children below the age of 12 with parental supervision,” Ng says. With the RM16mil renovation the Setia SPICE Aquatic Centre now also houses two squash courts, two badminton courts, a dance studio and a gym, while swimming classes for both children and adults as well as diving lessons are also offered.

While the first two stages of the SPICE transformation largely involved existing structures, the third stage – the Setia SPICE Canopy – was something completely new. Facing Jalan Tun Dr Awang and Jalan Mahsuri, the contemporary double-storey complex houses 59 shoplots ranging from 1,200 sq ft to 12,000 sq ft.

Although these marked changes in the area have been greeted with excitement, the jewel in the entire project is definitely the RM284mil Setia SPICE Convention Centre. Completed in less than five years, the much-anticipated complex houses the immense ballroom.

Able to hold 400 tables (and the option of an additional 150 tables in the 20,000 sq ft pre-function area), the convention centre outstrips any other event venue in the state in terms of size, and is the largest subterranean convention centre in the country. It can also seat 8,000 people in a theatre-style setting and has 13 separate function rooms in a 16,400 sq ft area that can hold 100 to 250 people each. These are essential to conferences and seminars which allow guests to hold meetings or functions in a smaller group.

The Setia SPICE Convention Centre's iconic roof lit up at night.

To top it off, Setia SPICE Convention Centre is also regarded as the first hybrid solar-powered convention centre in the world, pulling energy from a 4,546 sq m solar farm on top of the aquatic centre. “We generate 984MWh per year, which saves about 61 tonnes of carbon dioxide emissions – enough to power an average of 100 households or 125 cars a month. We use this energy to power the convention centre’s common areas like the corridors, lobby, pre-function areas and so on. There are plans to increase this (solar power) capacity and we are currently looking into expanding the solar farm,” Ng says.

Aside from being Green Building Index (GBI) certified, atop the convention centre is a six-acre roof garden, which consists of the largest special needs children playground and largest urban spice garden in Malaysia, suitable for outdoor events.

Parking spaces have also been increased: the total number of carparks now stands around 1,600 and this will rise to 2,300 after a 4-star, 453-room business hotel is completed on the premises in the third quarter of 2019. “The hotel, which started construction in April 2016, is located at the corner of Jalan Tun Dr Awang and Persiaran Mahsuri and will ultimately consist of two towers. The first phase, estimated to cost around RM350mil, will consist of a 25-storey tower and when completed can house those attending events at the convention centre,” Ng adds.

To date, both the Setia SPICE Arena and Setia SPICE Convention Centre have been booked for several major events, most notably crowds of 18,000 and 20,000 from India and China respectively on two dates this month.

Ng says that Penang is poised to host more of these large conferences as it now has an event venue that complements the other attractions in the state. Leveraging on the sea, hills, food and heritage sites that Penang is famous for, Setia SPICE Convention Centre – located just ten minutes from the Penang International Airport (PIA) – is ready to tackle almost any type of function. “The business we currently have is a mixture of private and public functions consisting of events like annual dinners, exhibitions, seminars, conferences, weddings and so on. We do get a lot of clients from overseas, mainly China, India, Singapore and Indonesia, not forgetting local clients. Going forward, we hope to attract more international events to Penang.”

The Setia SPICE Convention Centre ballroom seats 8,000 in a theatre-style setting.

A New Waterfront Arena

Just as the newest convention centre in the state opens its doors, another is set to begin construction.

IJM Land is teaming up with Singaporean company Perennial Real Estate Holdings Limited to launch Phase 2A of The Light Waterfront on the eastern coastline of Penang Island. The five-component mixed development project will, upon completion, see the rise of an even bigger convention centre, a retail mall, two hotels, an office block and two residential ventures within a 32.67-acre area.

Leading the charge is Tan Hun Beng, general manager of the joint venture company IJM Perennial Development. “The overall layout plan was approved by the local authorities early this year. We obtained planning approval in early January and we are now awaiting the building plan approval from the Penang Island City Council (MBPP). We are preparing the contract for the substructure works, which means we anticipate that the (full) approval will be coming soon,” Tan says.

IJM Land senior general manager of the northern region Datuk Toh Chin Leong.

In fact, the ground-breaking ceremony for Phase 2A has been set for early this month, mirroring IJM Perennial’s confidence that work will soon begin.

Tan explains that the upcoming Penang Waterfront Convention Centre (PWCC) will be situated on top of a brand new shopping mall, occupying levels seven through nine. “It will contain a main hall measuring about 7,000 sq m (able to fit 500 tables or sit 12,000 people theatre-style), a pre-function area of over 3,200 sq m, a separate banquet hall of 500 sq m (35 tables) and 12 meeting rooms which can fit around 200 to 400 people, depending on the room. The big convention hall is also multi-functional and can be separated into five smaller halls,” he says.

From K-pop concerts to tennis exhibition games, heavy machinery expos to pharmaceutical conventions, the sky is really the limit for PWCC with its flexibility and size. IJM Land senior general manager of the northern region Datuk Toh Chin Leong says that since the project’s location is a greenfield, the company was able to design the convention centre in the most optimum way it could envision. “Because it will be integrated with an office tower, hotel and a shopping mall, it will bring much convenience to people who come for events – you can eat, shop and stay there without having to travel elsewhere,” Toh adds.

A “seamless flow”, as Tan puts it, is the driving force behind the design of the mixed-development project, enabling those who come to the area for events to have all necessary amenities at their fingertips. “We can’t expect convention participants to stay 10km away and take a cab before the morning traffic jams to get to the centre. The area has to be supported with hotel facilities,” he says.

To this end, IJM Perennial will embark on the construction of a unique RM750mil two-in- one hotel complex, to be built at the same time as the convention centre and mall. “It will actually be two hotels: one 4-star with 500 rooms and another 5-star with 250 rooms, stacked up in one building. At 37 storeys, an international renowned hotel operator will manage both hotels which are largely business hotels but will also cater to leisure and holiday goers,” Tan says, adding that this will enable exhibitors who bring important products from overseas to stay close to their exhibitions.

A 37-storey office building is on the cards as well as two residential projects, both to be launched after the completion of the other three components. “We hope to complete the whole phase in about six years,” Tan says.

While the future is undeniably bright at The Light Waterfront, Toh, who is also the Real Estate and Housing Developers’ Association (Rehda) Malaysia’s Penang branch chairman, identifies two issues for improvement that he says would greatly assist the attractiveness of Penang’s Meetings, Incentives, Conventions and Exhibitions (MICE) events in the future.

“The capacity of the airport is too small and just cannot accommodate very large arrivals (of convention participants). Aside from that, we do not have enough direct international flights to Penang. If we have too many transits, participants will have to spend the first and last day just on travel and this reduces our appeal as a location for MICE events,” he says.

The improvement of public transport is also essential for both international and local people who are interested in attending functions at PWCC. “If you’re a Penangite and you want to attend a trade fair, you would want to avoid any jams so public transport is important. If you’re an international participant, in between attending conference events you may want to see a bit of Penang. Either way, public transport is key,” Toh says.

The Setia SPICE Aquatic Centre now houses the state's largest indoor splash pool for kids.

Agencies at Hand

Toh is not the only one who has identified these areas to be in need of improvement. Penang Tourism Development Committee chairman Danny Law says wooing more direct international flights from major cities is essential for the MICE business in the state.

“We are not connected to all major cities by airport. So, we do have quite a few groups who fly to KL and then bus up to Penang,” he says, adding that talks are ongoing to increase the number of direct flights from various destinations to the state.

(According to Malaysia Airports Berhad, Penang has direct air links to over 20 international destinations.)

Currently, from China, Penang International Airport (PIA) sees daily direct flights only from Guangzhou, while there are two flights weekly connecting Penang with Sanya, Wuhan, Kunming and Hainan.

Law adds that there are no direct flights from anywhere in India, meaning the huge crowds of participants attending the V-Conference (being held in Penang for the fifth consecutive year this month) would make their way from KL by road.

Dealing with the arrival of thousands of visitors over specific weekends is also a major logistical challenge, which Law has been tasked to assist with. “Since we know it’s such a big group, we call the organisers for a meeting to discuss where they can park the coaches. We’re talking about hundreds of buses and if it’s not managed properly, everything will go haywire,” he says.

Law adds that his office also handles issues of public awareness, informing local stakeholders on the arrivals, and arranging for security with the help of the police. “We help conference organisers stagger the arrivals of participants if they intend to visit specific places and provide them with the necessary information they need on certain venues. It’s a win-win situation for everyone if things run smoothly,” Law says.

This can also translate into repeat business tourists from out of state, which in turn means big tourist dollars for Penang. “We see that after attending conferences, participants return with family and friends on separate trips for holidays. We even see the conference organisers doing the same thing! The spillover effects are great,” Law says, adding that tourist arrivals from China to Penang, in particular, have risen steadily in recent years, from some 65,000 in 2014 to 70,000 in 2015. He adds that 2016 also recorded a jump in Chinese tourists, but the exact figure has yet to be released.

On top of that, Law explains that in terms of spending, business tourists far outweighed free independent travellers (FITs). “FITs and group travellers usually spend an average of RM3,000 in Penang per day. Conference participants spend double, sometimes even triple this amount,” he says.

However, Law says awareness of Penang as a business events location is still lacking. “Where China is concerned, we can’t afford to go to every province and promote ourselves. There is nevertheless big potential to attract more business from there,” Law says, adding that through events like the WTCF (World Tourism Cities Federation) Asia-Pacific Tourism Conference held here in March, Penang is working to bring key stakeholders from China to promote Penang.

Ashwin Gunasekaran.

Assisting the state in getting a bigger slice of the global business events pie is the Penang Convention & Exhibition Bureau (PCEB), a state agency set up in January 2016. PCEB acts as a one-stop focal point for business tourists, specifically in business events activities – an industry that has been growing from strength to strength since around 2010, says CEO Ashwin Gunasekeran.

Apart from bidding for local, regional and global conferences, pairing them up with local hosts and driving MICE business to Penang, PCEB also often serves as a solution provider and liaison for big conference owners as well as local hospitality and logistic players in the state. “For example, when the big conferences come in with 10,000 or 15,000 participants, all hotel rooms in Penang would be booked in advance. There would be no more rooms available. Some of these purchases would be done by small travel players who bulk purchase hotel rooms to sell to participants. The problem with this is that the rooms are marked-up and the rates just go higher and higher and higher,” Ashwin says.

He explains that in the past when big conventions were in town, rates for three-star hotel rooms could reach RM900 a night, causing the overall price of hosting conventions in Penang to soar. “The delegates were finding it very expensive to attend big conferences in Penang. In fact, it was becoming cheaper to attend a conference in Dubai than here!” he exclaims, adding that this caused the numbers of delegates signing up for Penang conferences to drop and in turn jeopardised the state’s attractiveness as an affordable business events destination.

After studying the problem, PCEB now advises big conference owners to select and appoint one large, reputable wholesale travel agent as the official agent of the conference. “The wholesale agent has to commit to minimal mark-up rates but in return, he gains publicity and recognition as the official agent.

“Hotels, on their part, can confidently do business with this agent. There have been cases in the past where smaller agents who were unable to fill the rooms disappeared without making full payment. In these cases, hotels are sometimes left completely empty during these important conference periods,” Ashwin says. PCEB also assists big conferences in securing quotations and organises coordination meetings with stakeholders.

On PCEB’s hopes for the future, Ashwin says the entrance of Professional Conference Organisers (PCOs) is high on the wish list. “These are the people who are the pros in organising big conferences and they handle everything from A-to-Z for big events. In Malaysia, there are only about five big players and none of them are currently in Penang or the northern region.

“The reason it would be good to have them is because they also bid for conferences themselves and they support the destinations they operate in. Having them set up here will be a game changer for Penang,” he says, revealing that some interest have been shown by several PCOs to set up office in the state.

One such PCO – AOS Conventions & Events – has in fact confirmed their first event in Penang, for November. “We are keen to bring conferences to Penang because of its many local attractions and cost benefits to local association clients. We consider Penang a strong contender as a second-tier city destination in Malaysia,” a company spokesman says after touring the Setia SPICE Convention Centre last month.

The Bigger Picture

Ho Yoke Ping.

Within the country, KL still far outstrips any other city in terms of MICE business. Malaysia Convention & Exhibition Bureau (MyCEB) business events general manager Ho Yoke Ping says that KL claimed over 70% of the market share across all segments in 2016.

“Based on our 2016 destination analysis, the key destinations are KL due to it being the capital city and having good direct access; followed by Penang, Langkawi, Sabah and Sarawak which are highly attractive destinations for corporate incentive travel,” she says.

From 2010 to 2016, Ho says Malaysia hosted an estimated 1,726 international business events that brought in 822,628 delegates and created an economic impact of RM9.811bil to the country. “We are seeing more and more international organisers selecting Malaysia as the destination for conferences and meetings, or more commonly known now as business events. In addition, we have also secured a total 807 international business events, which will bring us 526,914 delegates and a national economic impact of RM5.156bil. These events either have taken place or will be happening from now till 2024.”

It is also important to note that the business events industry also has multiple non-monetary spillover effects.

“According to UNWTO (United Nations World Tourism Organisation), in addition to being one of the key drivers of the tourism industry’s development, the business events sector is an important generator of income, employment and investment. It is also proven to produce higher return on investment by bringing benefits beyond tourism in the form of positive impacts from international business events which stretch beyond direct spending and job supplying,” Ho says.

Some examples are the spread of knowledge and innovation enhancement through exposure to global best practices, enhancement of Malaysia’s international profile and reputation, and the creation of a legacy for research.

Ho says Penang has many unique offerings and had garnered strong accolades as a tourist destination. The completion of the Setia SPICE Convention Centre and the launching of PWCC will make the state more competitive in winning business events, she adds. “The setting up of PCEB is timely with all this new infrastructure coming into place. Support from the government and industry players is also important.”

Other areas that the state can work on to boost its MICE appeal are training local players to have a better understanding of the needs of business events, embracing the ever-changing use of technology in meetings and conventions, and tapping into the international market.

On its part, MyCEB was firstly creating awareness for Malaysia in the global business events market, while introducing different destinations within the country for association meetings, corporate and incentive travel as well as exhibitions. “Under MyCEB’s current campaign ‘Malaysia Like Never Before’, we want corporate and incentive planners to showcase Malaysia in a different light by introducing creative and unique themes by destination (Party in Langkawi, Indulge in George Town, Shop in Kuala Lumpur, Escape in Kota Kinabalu and Unwind in Kuching). Penang’s current branding of ‘Experiences Unfiltered’ by PCEB is aptly designed to showcase the state in many different ways,” Ho says.


Aside from the newly minted Setia SPICE Convention Centre, we should not forget three prominent venues that have been faithfully serving the state for years.

 Straits Quay Convention Centre (SQCC)

Book fairs are regularly held at SQCC.

SQCC, located within the Straits Quay Retail Marina in Seri Tanjung Pinang, opened its doors in November 2011. Spanning 25,300 sq ft, the event hall can house up to 180 tables, 2,300 people in a theatre setting or approximately 150 exhibition booths.

Eastern & Oriental senior general manager of projects and property investments Emily Teh says the venue currently enjoys an occupancy rate of about 65%. “The majority of events organised at SQCC cater to the local market. Only about 10% of the events are organised by our international clients,” she says.

Teh adds that SQCC plays host to a variety of large exhibitions and conferences all year round, some returning year after year. “Since its inception, events such as Popular Mega Book Fair, Home Fair, Comic Fiesta Mini – to name just a few – have been organised at SQCC,” she says. “As the number of event spaces on Penang Island keeps increasing, the key challenge is to constantly innovate to set ourselves apart as an event space provider.”

SP Arena and Sunway Carnival Convention Centre

The first is the SP Arena in Seberang Jaya. Measuring just over 1,300 sq m, its banquet hall can seat 1,000 people (approximately 100 tables). It also has the unique option of outdoor dining for up to 300 people. Theatre-style, it can seat up to 1,500 guests and has one breakout room that can accommodate 14 long classroom-type tables. Popular for weddings and trade fairs, the site played host to events like this year’s state-level Chinese New Year open house in February and will house Pasarena Aidilfitri in June, which will be, it is believed, the biggest Raya mega carnival in the northern region.

Sunway Carnival Convention Centre

Sunway Carnival Convention Centre is currently the largest pillar-free event venue on the mainland. With a 320 sq ft digital video wall, its 20,000 sq ft space can be divided into three separate rooms. As one hall, it seats 1,500 people in a theatre setting and 1,060 guests for banquet dinners.

It is located just steps away from Sunway Hotel, providing overnight or out-of-state guests with convenient accommodation.

 

Andrea Filmer is a freelance journalist who has lived in the US and Australia but, for reasons unknown to herself, finds it impossible to call anywhere but Penang home.



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