South Africa's events industry should avoid going into a price war once the lockdown period is over, warns Glenton de Kock, CEO of the Southern African Association for the Conference Industry (SAACI).
For him pricing in the "new normal" will be very important and venues in SA should not undercut each other to get business once the lockdown is over.
"SA should not become a cheap destination but rather a value destination. Look at your business model. It is best to play it safe and ensure sustainability," De Kock cautioned during a recent webinar hosted by SA Tourism CEO Sisa Ntshona.
The sector for meetings, incentives, conferences and exhibitions (MICE) was one of the first in the tourism industry to be impacted through cancellations because of the coronavirus (Covid-19) pandemic spreading across the world.
It is expected that the MICE sector might also be the last to recover due to its nature of usually involving groups of people being brought together.
SA Tourism estimates that in 2018, for example, business tourism contributed R115 billion to South Africa's economy. Furthermore, business tourists generally spend more than leisure tourists at a destination. High profile events, like the Fifa World Cup Soccer tournament in 2010, the United Nations Climate Change Conference in Durban in 2011 and the World Economic Forum on Africa in 2019 also creates exposure for the country on the international stage.
In the 6th in a series of webinars hosted by SA Tourism, the MICE sector got a chance to share its experiences, challenges and plans to move forward in a post lockdown world.
Ntshona said the ability to track and trace visitors at events will be top of mind going forward. Furthermore, since it is expected that the tourism industry will start to recover first domestically, then regionally and finally internationally, he is not sure whether the local industry is big enough to boost recovery. Nevertheless, the domestic MICE market would have to be the short-term focus for the sector.
Another big question going into the post lockdown "new normal" is whether so-called hybrid events, which take place in a physical venue, while also being attended by a live and interactive audience online, will replace the traditional MICE gatherings.
"We may not have all the answers, but is it is through engagement that we can go forward and make sure we are ready when we get the wheels grinding again," said Ntshona.
Projeni Pather, chairperson, the Association of African Exhibition Organisers (AAXO), said during the webinar that, in the beginning of the pandemic, there was a lot of fear and anxiety in the events industry, but service providers have started to look outside their usual "arena" at what else they can use their skills and expertise for until they can continue with their regular businesses again.
Some have been very resourceful, for example, providing resources like sanitisation equipment to shopping centres and retail outlets.
The industry in general is also trying to prepare for when they come out of lockdown. An events safety council has, for example, been formed to create a framework for how to operate at an event or exhibition in the post lockdown environment.
"Unlike malls, we have a more controlled environment at conferences and expos. We know who enters and have pre-registrations, for example, where we can set a time when someone can visit an expo," she explained. "Of course, we want to ensure safety first."
In her view, hybrid events might become a complement, but will not replace the value of physical interaction.
"The events sector contributes to the economy as a whole and a catalyst for growth in other sectors. If there are no events, fewer people will come to support our tourism industry," she said.
Exhibition centres in regions like Asia and New Zealand have started to open again and AAXO is actively studying how they are approaching it and what lessons can be learnt.
For De Kock business events form an important part of the industry and should be seen as a priority to get started again.
"It will be all about health and safety protocols when events are put together in future. We have always had such regulations in place, so all that is happening now is to add safety screenings," he said. "Business events are well organised and tracking and tracing can comfortably be done."
In his view, a starting point could be allowing meetings, conferences or events of up to 50 people at a time.
He too believes that hybrid events will never replace the human need for physical interaction. Maybe in the short-term hybrid events will remain the focus, followed perhaps by one-day events.
"Recovery might feel slow over time, making collaboration very important to drive our sector forward," he said.
UPDATE: Alderman James Vos, Mayoral Committee Member for Economic Opportunities and Asset Management, said during a recent webinar hosted by Wesgro, that a sustainable tourism recovery plan has been developed for Cape Town.
He said the MICE sector remains very important for the city. It also supports the transportation, food and beverage and accommodation sectors. Unfortunately, this sector has been one of the hardest hit in the tourism industry and it is as yet unsure when their activities would be allowed to resume again.
"We want to showcase local offerings and help product facilitation and community development by providing opportunities along the tourism value chain in all corners of the city to transform tourism from the ground up," said Vos.
"We are working hard to increase Cape Town's visibility on local and international stage. We want to ensure Cape Town is top of mind for those interested in travel ranging from adventure to luxury, culture to cuisine and local community contact."
While the Covid-19 pandemic may be a black swan event, realistically there are many more common risks that could result in the cancellation or postponement of an event, and requires that organisers take a closer look at the scope of their event insurance cover, according to Jonathan Lindeque, senior client manager: sports, recreation and entertainment at Aon South Africa.
He says understanding what type of event cancellation cover is available and how it will respond in different scenarios is key to mitigating even the most unusual risks to the success of an event.
"We often find that some events organisers take the bare minimum of liability cover purely as a tick-box exercise to cover them in terms of an industry standard and regulation where it exists, rather than looking holistically at every potential risk to their event going ahead at all," says Lindeque.
According to Hugo Raymond who leads up Aon's contingency reinsurance team, many events have not been cancelled outright, but rather postponed. This will produce a lesser claim amount when, and more importantly, if the events are staged.