19 Apr, 2001

PATA’s 50th anniversary Conference & Travel Mart in KL

Imtiaz Muqbil

Malaysia averted what would have been a major public relations disaster for its tourism industry by thwarting a planned rally by the political opposition parties to mark the April 14, 1999 conviction of former deputy prime minister Anwar Ibrahim for sodomy and abuse of power. On the very day the whizbang 50th PATA annual conference ended on April 11, Malaysian police arrested seven opposition leaders under the Internal Security Act. The result: The planned rally on April 14 fizzled out, taking with it the media coup the opposition had clearly been expecting.

Had any disturbances occurred, it would have shattered the image of peace, calm and racial harmony that Malaysia is cultivating, and wasted the millions of ringgit spent on the lavish PATA event. More than 1,600 senior executives of the regional travel industry and about 120 international travel media were in Kuala Lumpur for the bash. Though most delegates had left the country by April 14, several were still in the capital and other parts of Malaysia on post-conference tours.

Clearly bent on ensuring that the the goodwill generated by the PATA conference did not end in an anti-climax, the government had a ‘window of opportunity’ between April 11-14 and grabbed it. The big loser appeared to be CNN, the much-vilified network that takes considerable stick from Asian tourism authorities for playing up regional and domestic conflicts. The network took some journalistic license in claiming that ‘thousands’ had rallied against Prime Minister Mahathir Mohamad but that was a clear exaggeration. I was there at Kuala Lumpur’s Merdeka Square, and can testify that hardly anyone showed up. Local newspapers reported the following day that only about 3,000 people had joined the wife of Anwar Ibrahim in presenting a petition to the Malaysian Commission on Human Rights.

Malaysian tourism authorities had gone into the PATA conference somewhat nervous about the situation, especially in the light of the so-called ‘race riots’ that had occurred just a few weeks earlier when a funeral procession and a wedding procession from different ethnic groups clashed in a Kuala Lumpur suburb. The clash and some subsequent sporadic riots were played up by the international media as a sign of alleged simmering tensions that could take Malaysia down the Indonesian path after the Mahathir era ends.

Now in his mid-70s, Mr Mahathir clearly wants to ensure his place in history as a leader who took the country to levels as high as the Petronas Towers. Papers like the International Herald Tribune and Asian Wall Street Journal readily nitpick about the state of the Malaysian economy, but the shopping centres are jammed solid and the streets crammed with traffic. As the country’s third largest foreign exchange earner, tourism is very much a major player in the economic growth. In 2000, the country had a total of 1,459 hotels with 134,586 rooms, up significantly from 1,090 hotels with 61,005 rooms in 1993. That means a lot of jobs are at stake if the tourism bubble bursts.

Malaysia’s new marketing slogan is designed to position it as “Malaysia, Truly Asia”, where three of Asia’s most populous peoples, the Chinese, Indians and Malays, all live in peace. By radically rejigging its marketing priorities and throwing big money at promotions in the regional countries, Malaysia claims to have grown its visitor arrivals by more than 40% in 2000, with total arrivals of 10.2 million, even higher than Thailand’s. The country is working intensively to facilitate visa formalities and boost air- access with both India and China, expected to be major sources of visitor arrivals in future. Ensuring good race-relations at home is absolutely critical to the success of this strategy.

Like most things in Malaysia these days, the PATA conference had both promotional and political overtones. Both Mr Mahathir and Tourism Minister Dato Abdul Kadir Sheikh Fadzir referred to the impact of negative media reports in their various public statements at the conference. Indeed, refuting media reports about what little support there is for Anwar Ibrahim is as important as highlighting the country’s ethnic diversity. PATA conference delegates were treated to a kaleidoscope of dance and music reflecting this Malay, Chinese and Indian heritage, which visitors can pretty much also see on the streets.

At the same time, it is intended to thwart an upsurge in popularity of opposition Islamic parties who now control the states of Kelantan and Terengganu which Mr Mahathir’s UMNO-led coalition would dearly love to recapture. At the closing press conference, PATA president Joe Mcinerney gushed with praise about the hospitality and efficiency of his Malaysian hosts. Sitting next to him, a clearly elated Dato Abdul Kadir made Mr Mcinerney swap places with him on the dais. “Please say that again into the TV cameras,” he told Mr Mcinerney, who gladly obliged.

Over the last two years, Malaysian tourism authorities have spent big money on a project called ‘mega-familiarisation’ trips for media and travel agents. In 2000, about 6,000 agents and journalists from all over the world were flown in to underscore the marketing strategy that ‘seeing is believing.’ This year, about 8,000 invitees are planned. Malaysia was also the ‘feature country’ at the PATA Travel Mart in Singapore that preceded the conference (see story below). Dozens of delegates and media from the Mart took all their pre- and post-conference tours to Malaysia under that programme. As long as all is well in the country, Malaysia hopes its visitors will go back and tell their friends and families not to believe everything they see on TV or read in the newspapers.

-0-

2. AVERTING THE ANTI-CLIMAX (2)

Just when it was due to settle into the traditional Day Three blues on April 6, the PATA Travel Mart received a jab in the ribs. After a usually hectic Day One (April 4) and a dozy Day Two (April 5), organisers let in a stream of trade-visitor buyers from Singaporean travel agency and tour operating companies and gave them access to all the 262 sellers. About 530 executives turned up, many getting some business done or otherwise catching up with friends. The little business done was better than none, and the busy atmosphere that percolated through the mart did not hurt either.

The move was a last-minute coup for Reed Travel Exhibitions (RTE), manager of the event. The global exhibitions giant which runs the flagship London event World Travel Market, knows well that competition is rising from both the geographic and niche- market proliferation of travel trade shows. Compared to some of the trade shows that it runs around the world, the PATA Travel mart is an under-performer. Reed’s shareholders are getting edgy but RTE Managing Director Tom Nutley says it’s not a major issue — yet.

“There is an escape clause in my contract (to run the PATA Travel Mart) that I could have exercised three years ago,” he says. “But the shareholders know these shows take time to pick up. As a whole, the group is doing well, and they know that I’m in this for the long-term.” Mr Nutley won’t mention it, but he certainly would not want to see rival exhibition company Miller Freeman walk in and pick up the contract for a show that RTE has spent considerable amounts developing.

Reed has a 10-year contract (1998-2007) to run the PATA Travel Mart on behalf of the Singapore Tourism Board which goes out of its way to subsidise the participation of buyers and media. Singapore Airlines gives both generously discounted or even complimentary air-tickets. Hotels give dirt-cheap or even free rooms. The event gets great marketing exposure through the PATA, the actual ‘owner’ of the event, as well as through Reed’s formidable distribution network.

Whether or not the Mart makes it any money, RTE has to pay PATA a minimum guarantee amount of US$400,000 a year, a major shot in the arm for PATA at a time when it needs all the revenue it can get. Indeed, the Mart is PATA’s second largest source of annual programme income after the annual conference. In 2000, another travel show run by PATA, the Vusamart in the USA, generated income of US$270,740 by comparison.

Financially, the PATA Mart is not doing as well for Reed as the Dubai-based Arabian Travel Mart. Nutley says the Asian economic crisis is taking longer than expected to come out of its slump. There is formidable competition from other proliferating trade shows. Currency devaluations are making it more and more expensive for sellers from many Asian countries to participate.

Trade shows are chicken-and-egg situations in which good buyers only come if they can see good sellers, and vice versa. RTE needs to address both, but its primary job is to keep the sellers happy. They are the ones who buy the space. This year, they paid US$180 per square metre of raw space and US$200 psm of a shell scheme. Those were up about 3-4% over 2000 and are due to rise by about the same amount in 2002.

At this year’s Mart, it did not take much to see that the third day was heading downhill. Though the show had a roster of 286 buyers and 262 sellers, allowing a perfect appointment match, not all the buyers want to see all the sellers. Most of the veteran buyers had already done their business by the second day and were making an exit. The Mart attracted 96 first-time buyers but quite a few of those were from Middle East countries like Bahrain, Egypt, Syria and Tunisia. They were mainly on scouting missions to check out the products and may generate some business. Sellers said they would wait and see.

Hence, it made sense to fill the vacuum by letting in representatives of the many Singaporean travel agents and tour operators as well as the international travel companies with offices in Singapore. Inspite of its small population, Singapore has a good outbound market. Many were invited; others were given a chance to walk-in upon payment of S$20 (about US$11), just to indicate their seriousness.

The move worked, especially as the invitees were much more carefully fine-tuned over last year. Bob James, VP Marketing of Central Hotels and Resorts, Thailand, said he would have rated the show a six out of 10 based on business value over the first two days but on the third day, a representative of a major Hong Kong travel agency group showed up and booked some business. His final score: 7. Neil Hucksteppe of Leonardo Image Bank said his staff came away “totally exhausted” after the third day. “They had a really good day,” he said. Added Roy Tan Hardy, Senior VP Sales and Marketing of Millennium & Copthorne International Hotels, “It was a pleasant surprise.”

Efforts are continuing to give the show value for money. Next year, Reed will be working with Asia-Pacific magazines Business Traveller and Corporate Exhibitions and Incentives to target buyers in that market, and bring them in addition to the trade visitors. With buyers for the regular appointment scheduling sessions getting increasingly difficult to find and under constant demand from trade shows world-wide, Reed is indicating that it would favour dropping the structured-appointment system entirely and make the show a free-for-all like the Arabian Travel Mart and WTM. But that decision is not Reed’s to make; the show belongs to PATA which has been following the same format for years and will need to be convinced that making the show a free-for-all is indeed the way to go.

Mr Nutley says there is no plan to renegotiate the US$400,000 fee “at the moment.” PATA officials said they don’t think RTE will press the issue. They claim that PATA may make more money by going it alone, and rotating the mart among various Asia-Pacific destinations, many of which would fall over themselves in offering financial incentives and other ‘hosted’ goodies. The risk, however, is that Reed, too, may give PATA a run for its money by setting up its own show in a less expensive destination.

In a surprise move, PATA has turned to Jerry Picolla, its former VP Marketing and a big-league player in the 24 years the Mart has existed, to rejig all of its trade shows, especially the Mart. Mr Picolla said his job will be to raise PATA’s profile in the Travel Mart. “There is a feeling that the Mart has to have more PATA involvement.” He said his job will be to explore ways to involve the membership and make the Mart a “must-event.”

Meanwhile, other efforts are under way to help the Mart generate better returns. Cost-cutting is one way. In 2000 and 2001, Malaysia was the ‘feature country,’ and financed the opening lunch for all delegates, a hugely expensive exercise. In return, it gained the rights for exclusive exposure through all the Mart’s marketing materials as well as a lock on all pre- and post-conference tours. To broaden the market, this year saw the start of niche-market themes: spas and health, to expose the dozens of spas and health farms emerging in the Asia-Pacific. In 2002, Nepal is the feature country, and Adventure Travel the niche-market focus.