Tourism Product Innovation: Positioning Meetings, Incentives, Conferences And Exhibitions, As A Strategy For Product Diversification In Beach Hotels of Mombasa County, Kenya
1Dr. Alice Nzioka Phd
Machakos University
Abstract
The study purposed to investigate Meetings, incentives, conventions and exhibitions, abbreviated “MICE” as an important element of tourism product innovation and diversification in Kenya. This paper had specific reference to the Beach Hotels in Mombasa County in the Kenyan Coast, which has traditionally offered vacation and leisure tourism product. As one of the major sectors within the global tourism industry, MICE have long been recognized as a sector that gives direct and indirect revenue for host destinations, creates employment opportunities and generates foreign exchange. As a consequence of all these major characteristics, the number of destinations vying for this industry is increasing (UNWTO, 2014). This study adopted a census approach while data collection took a two pronged approach. A validated questionnaire was administered to the respondents while a focus group discussion was held with selected hotel owners from the county. Results from this study indicate that during the period of focus 50% of the study hotels offered incentive tours while 33% offered exhibitions and trade fairs. The proportion of MICE earning compared to the total earning in the beach hotels grew from 21% in 2013 to 51% in 2017. The study found that 38% of the hotels are increasing their marketing targeting MICE, 31% are investing in developing their facilities. Seventy percent of the respondents said that the MICE product need diversification as an opportunity for growth as well as income to cushion the hotels during the seasonal fluctuations of the leisure tourism. Results showed that 60% of the hotels have not exploited their advantage of being on the beach to offer more incentive tours. The study recommends that beach hotels address new and existing innovations and technological solutions to diversify their businesses by offering products that incorporate business with leisure packages to be able to maximize on their revenue all year round.
Keywords: MICE, Tourism product, innovations, Destination, Diversification, Beach Hotel., Revenue
Introduction
Tourism has an economic relevance hence captivating attention from policy makers, researchers, business sphere of the tourism sector. It is one of the biggest and fastest growing industries in the world with international tourist arrivals reaching 1,135 million in 2014 (United Nations World Tourism Organization,2014). A report from the Kenya Tourism Board (2015) indicates that the tourism economy represents 5% of global Gross Domestic Product (GDP). International tourism ranks fourth (after fuels, chemicals and automotive products) in global exports, with an industry value of US$1 trillion a year, accounting for 30 % of the world’s exports of commercial services or 6 % of total exports (UNWTO & International Labour Organization, 2014).
In Kenya, tourism has been the cornerstone of the economy, and a leading foreign exchange earner. The country earned Ksh 96 billion in 2013 while attracting more than 1.5 million tourists (Kenya National Bureau of Statistics, 2014). The high tourism earning can be attributed to diverse strategies adopted by the tourism industry which include seeking alternative tourism products (Kenya Tourism Board, 2016).
A report from the Kenya National Bureau of Statistics (KNBS) 2016 “Economic Survey”, the number of international arrivals to Kenya fell every year from 2011, when it stood at 1.8M, through to 2015, when the figure was at 1.18M, before bouncing back to 1.3M in 2016. Tourism earnings followed the same trajectory, falling from KSh97.9bn ($955.2M) in 2011 to KSh84.6bn ($825.4M) in 2015.
According to the Kenya Tourism Board, (2016), this contraction was the result of perceived insecurity in the region, noting that arrivals to Mombasa had suffered the most in 2015: international arrivals fell by 41.1% to 59,194 between January and October 2015, down from 101,073 during the same period in 2014. The trend was further exacerbated by travel advisories announced throughout 2015, which included the key tourist centers. This study therefore explored innovations in MICE tourism as an alternative tourism product.
Statement of the Problem
Tourism in Kenya concentrates on traditional products of Wildlife (Safari) and Beach Tourism (sun, sand and sea). A World Bank Report “Polishing the Jewel” (2010), observes that tourism in the coast region Kenya constitutes the highest bed-night stays within the tourism sector, and has had several years of consistent growth however the sector was negatively affected by post-election violence of 2007/2008, charter flight cancellations, and a continuing drop in arrivals as global financial markets faltered.
According to Kenya Vision 2030 a blue print for development in the country, there is need to diversify Kenya’s tourism product in order to remain competitive. Various policy documents have advocated the need for tourism product diversification. With the challenges facing beach tourism, there is a need to look for other alternatives to attract and retain the tourists. This paper explored technological solutions and innovations that could enhance attendee experiences and make (MICE) tourism a potentially strong product line within the tourism sector in the coast region of Kenya.
Literature Review
The Mice Tourism Product
Global tourism industry is categorized as leisure tourism and business tourism (Swarbrooke and Horner, 2007). However, the two categories require the same infrastructures in terms of transport, accommodation, communication, entertainment, and information services (Cooper, Fletcher, Fyall, Gilbert, and Wanhill, 2008). The main difference between the two sub-sectors depends on the “type of services rendered the level of transport and accommodation” (Lickorish and Jenkins, 1999).
Business tourism quires special facilities and services such as a conference centers specialist contractors as reported by Swarbrooke and Horner, (2007). This sub-sector is also linked to leisure tourism as in some conferences social programmes of leisure activities are included (Swarbrooke and Horner, 2001). Dwyer and Forsyth (2008) asserts that MICE is one of the fastest growing sectors of the global tourism industry and generates millions in revenue annually for host destinations while creating a positive impact on the city image.
In Kenya, MICE tourism has been identified as one of the priority sectors and economic pillars that contribute towards the realization of Vision 2030 (National MICE committee & secretariat 2011). According to the Kenya Tourism Master Plan (GoK, 2005a), Kenya boasts of world class meeting places in addition to the traditional wildlife and beach attractions.
Economic Importance of Mice Tourism to Hotels
Hotels are perhaps the best known venues for meetings and conferences. They are especially popular when a residential venue is required. According to (Maingi, Odunga, Belsoy, & Nthinga, 2011) during the tourism slump of the 1990’s, conference service suppliers especially hotels and resorts strategically positioned themselves to take advantage of this money spinning business. The boom from this complimentary revenue source was perceived as the ‘Goose that lays the golden egg, when the hen was not producing’.Hotels may supplement their role as accommodation and catering providers with that of suppliers for rooms where meetings are held. The attraction of offering conference facilities ranging from a single seminar room to a whole conference wing is easily explained since it often represents the opportunity to take advantage of underutilized resources and infrastructure. The National MICE Committee & Secretariat (2016) reported that residential conference increases occupancy and generates higher room rates than leisure tourism market.
Grass and Root (2011) reports that incentive tours have significantly grown with an increasing proportion of corporate clients utilizing within their incentive packages in addition Davidson and Cope, (2003) found that a significant number of hotels by their very design are well suited to responding to the need for incentive trips”.The MICE sector alone in the United States of America generated $ 122.31 billion in total direct spending in 2004, making it the 29th largest contributor to the Gross National Product. These statistics were released by the Convention industry council’s 2004, Economic impact study and cited by Maingi, Odunga, Belsoy, & Nthinga, (2011).
The National MICE committee & secretariat (2011) reports that Tourism in Kenya and in particular the MICE sub- sector has been identified as one of the priority sectors and economic pillar that contribute to the achievements of the goals contained in the Kenya Government’s Vision 2030
Recent report by the Kenya Tourism Board (2017) indicates that Kenya has recorded steady growth in the Meetings, Conference, and Incentives industry. The MICE sub- sector welcomed 117,630 tourists to Kenya in 2015 indicating a remarkable 14% increase and giving a total contribution of 15.6% of the country’s total international tourist arrivals. In 2016 alone, according to the report the MICE industry accounted for 13% of total international tourism arrivals; a large number consisted of business travelers.MICE tourism spending in Kenya contributed 32.5% of the total revenue and predictions by World Travel and Tourism Council (2017) shows a steady rise by 5.9% pa to Ksh 242.6 Billion by 2026.
Technological Innovations in Mice Tourism
Age – established methods of working may collide with innovations and new ideas. It is therefore important to overcome the hurdles of conducting business the traditional way in order for existing business to be innovative and push boundaries. The MICE industry is where old is meeting new (Nyameino, Bonuke, & Cheruiyot, 2015). MICE tourism has proved to be less susceptible to peaks and troughs of demand as the one experienced in leisure tourism. The spending is more evenly spread throughout the year. This has made it an attractive venture for hotels and destinations. It is evident that events have the capacity to be scheduled in periods of low tourism demand. According to Besteiro, (2003) “… Conference tourism has been an important factor for out of season diversification of tourism and economic development in Galicia, Spain.
Stevens and Wootton, (1995) found that MICE can boost a declining destination as is the case for Wales, which has been dependent on declining seaside holiday market and has chosen MICE as the more sustainable choice. A number of African countries have committed massive resources to construct conference rooms and exhibition facilities especially in the recent past. As reported by the World Tourism Organization (2014), MICE facility development is seen as an important way to attract much needed jobs and income to a number of areas outside urban centers. Several MICE destinations including Asia and Vietnam have since become the favorite among business travelers because of their world class convention centers that offer state –of –the-art facilities and exceptional services (World Travel and Tourism Council 2017).
Currently, the catalyst for advancement in business is technology. Sirirak, Islam and Khang (2011) found that Technology, such as artificial intelligence and virtual assistants are important for guest experiences and are increasingly becoming important for event venues as they are regarded as cultural shifts on consumer preferences.Technology is indeed changing both how events are planned and how attendees participate in the action. Facial recognition technologies for MICE tourism are faster, safer and also more unforgettable systems, because they make people remember any event (Shaham and Sajjad-ul-Aziz. (2012). Additionally the utization of augmented reality allows the projection of project data and images about things seen through a smart device, such as Google Glass or the screen on smart phones.
World Travel and Tourism Council (2016) indicate that well-equipped conference centers and high adaptation of technology has come in handy; to supplement the growing number of hotel conferencing facilities. The proposed a state-of-the-art Bomas International Conference and Exhibition Center in Nairobi with a capacity for 10,000, exhibition hall to hold 15,000 will go a long way in pushing Kenya as the continent’s unrivaled MICE destination. Reports by Euro monitor international (2015) showed that terrorist threats had adversely affected Kenya’s tourism industry. Repeated travel advisory against visiting the Kenyan coast has drastically reduced the number of tourists who have traditionally visited the region which is a popular destination.
Methodology
The population for this study comprised 29 resorts on the beaches of Bamburi, Nyali, and Shanzu which fall under the administrative boundaries of the Mombasa County. These are facilities that have direct access to the beach. Therefore the most important criterion in selecting this area was that it is a good representation of the leisure tourism in Kenya. The resort managers were the respondents for this study.
A survey questionnaire that consisted of a set of Likert-type scales multiple-choice items was developed. It included a grid to evaluate performance in terms of guest numbers and revenue trends of MICE activities and two open ended questions.
To test the questionnaire for reliability, a pre-test of 3 resorts that represented 10% of the total resorts was performed. Cronbach’s alpha was calculated by Statistical Package for Social Science (SPSS) version 18.0 software. The result showed the questions was reliable (alpha= 0.76). The sample size for this study was therefore 26 resorts.
Data collection took a two-pronged approach. First, questionnaires were administered to the general managers in the study resorts, secondly a focus group discussion was held. Descriptive statistics and content analysis were used for data analysis.
Findings and Discussions
Respondents in this study listed the MICE activities held in their hotels during 2013 – 2017. Results indicate that in the period of focus, 2013 -2017 all hotels in this study held meetings and conferences. The meetings were organized as either galas or cocktails. This reflects an attempt to integrate business tourism within a primarily leisure environment. Conventions were the least MICE activities hosted by the hotels at 32%. These findings are consistent with previous research by Swarbrooke and Horner (2001), that found hotels to be the best known venues for meetings and conferences. Results indicate that 50% of the hotels hosted Incentive travel. Studies by Davidson and Cope, (2003) found that many hotels by their very design are well suited to responding to the need for a fantasy or exotic element in incentive trips. Hotels in this study were placed in into three categories according to bed capacity, those with less than 200 beds were regarded as small , those with not more than 400 beds big and those with more than 400 beds large. Results showed that meetings were the most popular activity during the period in focus where beach hotels in the small category hosted 50% of all the meetings, big beach hotels hosted 35% while large beach hotels hosted 28% of the meetings. Incentives, exhibitions / trade fairs were the least popular MICE activities to be hosted in small hotels between 2013 to 2017.
Hotels reported their respective capability to host MICE activities based on various indicators including, availability of seminar rooms, seating capacity of meeting rooms, size of largest meeting room in meters squared, availability of exhibition tents/kiosks, availability of flip charts, internet access, PowerPoint projector and public address systems in their respective meeting and conference venues. Results indicated that all beach hotels had at least one seminar room while the hotels with the most number of rooms had seven (7) meeting rooms. Meeting rooms capacity for the beach hotels studied ranged from a minimum of 60 people to a maximum of 1,700 people with the largest hall reported measuring 500m2. Only 8.3% of the hotels had their own tents /exhibition kiosks available to MICE participants corroborating the earlier result that in the period considered, exhibitions and trade fairs were the least popular MICE activities in beach hotels.
This study sought to find out if there existed a relationship between hotel bed capacity (size) and the capacity to host MICE activities. The analysis considered bed capacity against number of seminar rooms and seating capacity for seminar and meeting rooms.
4.1: Cross tabulation of Bed Capacity against Number of Conference Rooms.
|
No of Conference Rooms |
|||||||
|
Bed Capacity |
1 |
2 |
3 |
5 |
6 |
7 |
|
|
Less than 200 beds ( Small) |
25.0% |
50.0% |
25.0% |
0% |
0% |
0% |
|
|
201-400 beds ( Big) |
40.0% |
0% |
0% |
20% |
40% |
0% |
|
|
> 400 beds (Large) |
0% |
0% |
0% |
0% |
0% |
100% |
|
Results from table 4.1 above indicate that beach hotels with less than 200 beds, had between 1 to 3 meeting rooms while the big hotels with less than 400 beds had 5 to 6 meeting rooms. On the other hand, larger beach hotels with higher bed capacity above 600 had more than six conference rooms.
These results pointed to an existence of a positive association between hotel bed size; its accommodation capacity and the capacity to host MICE activities, particularly meetings as indicated by number of conference rooms (r = 0.652. sig.0.030).
Length of Stay of Mice Clients in Beach Hotels In Mombasa County
Respondents were asked to report mean length of stay by Meetings, Incentives, and Conference and Exhibitions participants staying at their hotels between the years 2013 -2017. Table 4.4 below presents mean length of stay computed for the various MICE products in the beach hotels studied. Standard deviations are shown in parenthesis. Meetings participants stay ranged from 5.4 days to 6 days over the period, while conference participants stayed for 6.8 days in 2013 to 7.3 days in 2017. Incentive and exhibitions were held for less than three days in each of the five year period under consideration. Both meeting and conferences mean length of stay indicated a slight growth trend.
Table 4.2 Mean of length of stay of MICE Clients in Beach Hotels of Mombasa County 2013-2017.
|
Mean Length of Stay (Days) |
||||
|
Year |
Meetings |
Conferences |
Incentives |
Exhibitions |
|
2013 |
5.4 (1.90) |
6.8 (4.72) |
2.2 (2.04) |
2.0 (2.12) |
|
2014 |
6.6 (3.89) |
9.1 (8.55) |
1.86 (1.86) |
2.6 (2.6) |
|
2015 |
5.4 (1.51) |
7.4 (7.19) |
2.6 (2.30) |
1 (1.50) |
|
2016 |
7.0 (3.48) |
8.6 (9.16) |
2.4 (3.05) |
3 (3.32) |
|
2017 |
6.0 (1.00) |
7.3 (6.56) |
1 (0.95) |
3.2 (3.42) |
The slight growth observed (Table 4.2) in mean length of stay for Meetings, conferences and exhibitions in the Beach hotels corresponds to a period of significant improvements in the holiday and leisure tourism market. The Statistical abstract 2015 reports that 2014 recorded a marked 13.3% increase in international arrivals at all ports of entry compared to the previous year GOK, (2015). The national average length of stay for the disaggregated business tourism market which includes the MICE segment was reported at 19.3 days over the five year period from 2013-2017 (GOK,2018). The national average includes other segments that make up business tourism such as business travelers; a direct comparison with the disaggregated MICE activities in Mombasa beach hotels was not in the mandate of this study. However it was observed that MICE average length of stay for Mombasa beach hotels for the five year period was less than 8 days.
MICE Earnings as a Proportion of Total Revenue (2013 -2017)
Individual respondents were then asked to provide data on the Proportions of MICE activity revenues in relation to the total revenue for the Beach Hotels in Mombasa County – 2013-2017
Table 4.3: Modal Class of Proportion of MICE Revenues for the Beach Hotels in Mombasa County – 2013-2017
|
Year |
Proportion (%) of respondents |
Class of proportion of MICE revenues over total revenues |
|
2013 |
44.4 |
21- 40% |
|
2014 |
44.4 |
41 -50% |
|
2015 |
40.0 |
41-50% |
|
2016 |
30.0 |
> 51% |
|
2017 |
60.0 |
> 51% |
Results in table 4.3 above shows the modal classes of the proportion of MICE revenues over total hotel revenues for surveyed beach hotels in the five-year period. Findings indicate that there were increases in MICE activity revenue from 21- 40% in 2013 to over 51% of total revenues in 2017 indicating a progression of the significance of MICE activities contribution to beach hotel revenues over the five-year period. Studies by Besteiro, (2003) showed that Conference tourism was an important factor of promotion of out of season diversification of tourism and economic development in Galicia, Spain
Innovative Strategies to Drive the Mice Sub Sector in Beach Hotels Mombasa County
Data on innovative strategies that are likely to enhance the growth of the MICE activities in the beach hotel were analyzed using content analysis. The participants of the focus group discussion were selected event planners and owners of hotels with a beach front or their appointees. The focus group discussion concentrated on the innovative strategies for MICE tourism particularly in beach hotels. All the participants were in agreement that hotels in Mombasa County have heavily dependent on the declining seaside holiday market and that hotels with a beach front were also at an advantage of hosting events since the hotels may combine business travel with leisure.
According to Dwyer, (2002).) “… Conference tourism has been an important factor for out of season diversification of tourism and economic development in Galicia, Spain.
Over 80% of the participants said that events generate revenue and also provide an opportunity for growth as well as tourism products diversification. One of the event planners commented “it is not enough to have a hotel on the beach; hotels need to understand and move with the prevailing global event trends.” Various themes were identified from the discussion including insecurity Facial recognition technologies, utilization of conference apps, development of convention facilities in hotels and attendee experiences.
The first item on the discussion was attendee security. Travel advisories due to insecurity in the region were identified as the major cause of reduced business in hotels. One hotel owner said “the hotels are on their knees due to insecurity”. Ninety percent of the participants said that attendee security is an important issue for both meeting planners and venue owners. Security determines the mode of transportation, destination, and MICE activities for the attendees. Concerns about security and political stability of the destination influences meetings and event decisions (American Express Meetings & Events global meetings forecast (2016).
The discussion centered on various innovative opportunities that hotels and event planners can leverage on to maximize revenue and economic sustainability. Findings showed that there is need to inculcate new and existing innovations and technological solutions to help the hotels in enhancing efficiency and attendee experiences in the meetings industry.
There is a growing expectation among the attendees that event planners and managers need to create higher levels of engagement and involvement so that the attendees can participate in the event conversation. UNWTO, (2014) reports that the younger generation tend to be less keen on traditional speakers and prefer engagement to instruction. Conference rooms in hotels should be equipped with facilities to encourage audience participation, convention apps may be used for a range of activities including attendee registration, checking event schedules, and submitting questions to speakers during the live events.
The participants were in agreement that there was a growing demand for “uniqueness.” hotel should move away from traditional ways of event management. Findings from this study are consistent with a report by World Travel and Tourism Council 2017) pointing that several MICE destinations including Asia and Vietnam have since become the favorite among business travelers because of their world class convention centers that offer state –of –the-art facilities and exceptional services. Ninety percent of the participants were in agreement that “gone are the days where venues were only expected to be equipped with high speed internet connection a registration desk and an overhead projector’. It is therefore necessary that event planners and venues provide broadband internet access.
Marketing is important for event organizers to increase the visibility of events in hotels. A participant from one of the beach hotels commented on the importance of using social media accounts for event marketing. Payment challenges were discussed and the participants recommended that new technology should be innovated that would make payments easier especially for global events. The FGD Participants were on the opinion that Kenya through the Ministry of Tourism should benchmark with leading MICE countries. Importance of tourism research was discussed and recommendations given.
Conclusions
The study concluded that Beach Hotels in Mombasa County have embraced the meetings and conference side of business and are focusing on not only marketing it more but also investing in facilities to increase their capacities. However the hotels have not exploited their capacity and advantage of being on the beach to offer more MICE products which they could most successfully perform since they already have a leisure component in their facilities. The importance of technological innovation for the sector is crucial if the hotels wish to match the global competition in services provision.
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