Hotel chains see huge potential in MICE

Hotel operators are seeing potential in Meetings, Incentives, Conferences and Events (MICE) as a segment that could drive earnings for their businesses as they tap into projected growth within the segment.

This comes as the country has a shortage in conferencing facilities against a high appetite by businesses, NGOs and politicians to hold conferences across the country tackling various issues of the day at both domestic and international levels.

Already, the segment has helped boost occupancy levels particularly post Covid -19 pandemic when the sector is seeing a steady recovery.

While the United Nations World Tourism Organisation (UNWTO) projects an increase in international travel, recently rebranded Hyatt Regency Harare The Meikles general manager, Mr Tinashe Munjoma, indicated the group is also banking on the MICE segment to enhance activity at the hotel.

In light of this, Mr Munjoma revealed the group is increasing conferencing facilities as part of the multi-million-dollar refurbishment exercise the hotel embarked on after its acquisition in 2019 by Dubai-based Albwardy Investments for US$20 million and vowed to upgrade the facility to international standards.

The group invested a total US$30 towards upgrading the facility, and transforming it to reflect its thrust of an international brand.

The areas of focus are rooms, restaurants and conferencing facilities, according to the group.

“We are seeing growth potential in this segment and therefore the need to increase our conferencing facilities,” he said responding to questions at a recent media briefing and tour of the refurbished hotel.

The tourism and hospitality industry has been identified as a low hanging fruit capable of boosting the economy.

However, the country has a total room capacity of 14 000 rooms and limited conferencing facilities, creating scope for operators to pay special attention towards this segment.

Listed operator, Rainbow Tourism Group (RTG), revealed the group has seen an increase in the conferencing business.

During the first quarter to March 31, 2024, the group recorded a 40 percent jump in conferencing business compared to the same period in the prior year.

“This was led by increasing conference activities mainly in city hotels,” said company secretary Mr Tapiwa Mari.

The group is also on an upgrade exercise to spruce up its flagship conferencing facility – the Harare International Conference Center (HICC) at the Rainbow Towers Hotel.

“The conference centre will also undergo significant improvements, including the installation of new carpets and chairs in the 4,500-seat auditorium.

“All refurbishment works are scheduled to be completed by 31 July 2024, ensuring the venue is ready to host the Southern African Development Community (SADC) Heads of States conferences in August 2024,” added Mr Mari.

Peers, African Sun, have also seen an increase in conferencing business, helping lift earnings for the first quarter period.

The Victoria Falls Stock Exchange (VFEX) listed hospitality group, said revenue for the quarter stood at US$11,1 million, which was 40 percent ahead of the prior year, largely driven by higher demand for conferences during the quarter, resulting in an 8-percentage-point increase in occupancy and a firmer Average Daily Rate (ADR).

During the quarter under review, the domestic market continued to be the primary source of business, contributing 76 percent of the total room nights sold, while the international market is gradually recovering, contributing 24 percent of room nights, a 54 percent growth from the same period last year.

“The increase in ADR and occupancy results from ongoing product improvements and revenue-yielding efforts,” said the group.

The trend is not unique to Zimbabwe alone but across the globe as MICE business is leading growth especially from small businesses. Leading luxury hotels are reportedly recording reduced guest room bookings and rates, but seeing record-setting conference room bookings.

According to a latest research from CoStar, a commercial real estate information and analytics firm, major hotel chains have reported up to 25 percent increases in conference room bookings from smaller companies in 2023 compared to 2019, while larger corporations have reduced bookings.

“This points to a significant opportunity to increase profitability through business travel events and local small business meetings that can develop into long-term relationships,” said the research firm.

But for Zimbabwean operators to fully tap into this segment, there is also a need to enhance integrated digital displays and presentation systems to accommodate business activities, with specific technologies deployed to limit difficulties.

Overall, the sector is upbeat of cashing in on international travel recovery, as first quarter to March 31 2024 performance is already showing improvements in occupancy levels, compared to the same period last year.

International travel was affected by travel bans that were implemented during the Covid 19 pandemic, resulting in some operators temporarily closing their facilities, which weighed on their financial performance. However, the sector is beginning to see recovery.

“We expect to see continuing improvements in our business, driven by the recovery of the international market which had been lagging since the waning of the pandemic,” said African Sun.

Locally, there is optimism the policy measures the Government is implementing will help restore confidence in the economy, that will also cascade to the tourism and hospitality industry.

“The introduction of the new currency Zimbabwe Gold (ZiG) is anticipated to bring in the much-needed stability and correct the exchange rate mismatches which were being obtained in the market,” said Mr Mari.-ebuisness