Banking on Business

Despite a rough economy, Hawaii’s meetings market is solid

By: By Karla Aronson


Hawaii Visitors and Convention Bureau
Meetings, Conventions & Incentives 

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Though personal pocketbooks may hold back some leisure clients from their dream Hawaii vacations, those coming to Hawaii for meetings, conventions and incentives (MC&I) are giving a leg up to bookings statewide.

"Leisure is always going to be the largest segment," said Michael Murray, vice president of sales and marketing for corporate meetings and incentives at the Hawaii Visitors and Convention Bureau (HVCB). But Hawaii’s MC&I travel segment could go up to 15 percent in the next several years, he said.

Hawaii’s MC&I travel segment continues to see growth despite economic woes. // (c) Murray:  Hawaii Tourism Authority
Hawaii’s MC&I travel segment continues
to see growth despite economic woes.

In 2007, MC&I visitors accounted for about 6 percent of overall state arrivals. The sector generally ranges between 6 and 10 percent of visitors, compared with Hawaii’s dominant leisure travel segment.

With bookings for near-term business on hand, the HVCB foresees a spike in business at the Hawaii Convention Center on Oahu, citywide in Honolulu and statewide in 2009 continuing through 2010, Murray said. The pickup in overall MC&I travel will not be at the expense of performance in the leisure segment.

"It’s not so much an offset [to leisure], but an increase in business," Murray said.

In the first five months of 2008, the approximately 240,000 MC&I visitors to Hawaii represented a 2.3 percent gain year-over-year. Murray said the levels were "maintaining" against a backdrop of a 2 percent decline in the state’s 2.35 million leisure travelers during the same period.

Ongoing strength in MC&I arrivals is especially important, Murray remarked, because, expenditure-wise, the MC&I segment accounts for 10 to 12 percent of Hawaii visitor spending.

"MC&I is our highest spending traveler," he said. "The MC&I client spends more per person, per day."

By U.S. region (according to the most recent figures available from 2006), MC&I travelers from western U.S. states spent $196 per person per day compared to leisure spending of $156 per day. Eastern state MC&I travelers spent $234 per person, per day compared with leisure spending of $180 from the region. That represents 25 percent higher MC&I spending in each instance, Murray said, adding that numbers will be even higher for 2007.

Groups categorized within the MC&I sector can range from 10 rooms (based on accommodations industry standards) to 30,000 for Hawaii Convention Center delegates and their guests. Outside the convention center, the HVCB regularly works with large groups of 1,500 to 2,000.

On the small side, Murray said, "It can be a board meeting of 10 or a reunion of 100." On average, however, the HVCB sales team works with groups in the 200- to 350-person range, he said.

While the HVCB does not disclose its client roster, the top-five corporate business sectors being drawn to Hawaii over the next two-year period are business-related services; insurance; medical and pharmaceutical; technology and electronics; and banking. In sync with the economy’s cycles, the building and automotive industries have dropped down the list.

The corporate incentives sector, in particular, will be vital going forward. While corporate conventions in Hawaii have been doing very well over the last three to four years, the competition among destination sites remains fierce. And many corporate meetings are staying closer to home.

Keeping the current economy in mind, Murray said, "corporations need to incentivise salespeople for productivity."

Companies are creating incentive programs, or award trips, to drive business. This is where Hawaii as a destination has a sales advantage: people want to come here.

"Hawaii itself is a motivator," Murray said.

The bulk of MC&I business is booked for Oahu, followed by Maui, the Big Island and Kauai.

Each island does differently year to year depending on inventory demands across the state, according to Murray.

He added that the HVCB does not see anything happening out of the ordinary among statewide trends.

While MC&I sector business generally falls into the hands of specialized travel agents, meeting planners and destination management companies, agents interested in stepping into or expanding business in the sector can call upon HVCB’s regional personnel and resources. The HVCB lists a number of service providers on its Web site.

Also, the visitors bureaus on each island have dedicated personnel ready to educate agents on the sector, make suggestions and provide contacts.

Tom Risko, the Maui Visitors Bureau’s director of sales for meetings, conventions and incentives, said a key point for agents is "to ask customers up front all the questions you can think of."