The first of 4 special articles on Strategic, Business and Competitive Pressures impacting events and tourism
There is no place for complacency. This is a world where the half-life gets shorter every day. The world economy is being remoulded. The new big boys on the block are moving fast to capitalise on their new economic dominance and to capture their local followers, ie consumers, rather see them fall into the hands of outsiders. In our region these are China, Korea, Singapore, Indonesia – and more widely we look at India, Brazil and the Mid East/UAE. These are the BRICs or the MISTs as now being touted (Mexico, Indonesia, Sth Korea, Turkey) with new fortunes – noteably some with oil and resources incomes – and great ambitions.
These are the countries hosting and bidding to host the bulk of major events and which are generating the growth in international tourism.
While we read of a slowdown in China that will affect Australia, the scale needs to be recognised: GDP growth in China of 7.5% per annum, now expected versus 8-9% or so of up to a couple of years ago, is equal to the size of the Saudi economy and equal to about half the size of South Korea’s. Developing economies place greater importance on major sporting events in attracting inward investment. In Latin America, almost three quarters (74%) of business leaders believe major sporting events are important in attracting investment to their economy and across the BRIC nations over half (54%) hold this view. By contrast, far fewer businesses in the EU (42%) and North America (44%) believe in the ability of big sporting events to attract investment, dropping to just over one in three (36%) in the G7. Australia would, I believe, fall within the latter group.
What counts now? Investment, creativity, addressing the consumer. There are new expectations, new perceptions and new benchmarks established by our competitors. Our leading edge assets include wildlife, environment, food and our unique indigenous culture…plus new developments such as the Melbourne Southbank arts precinct. Australia has achieved remarkable success across multi-sport and single-sport events, from clubs to highly commercial sports engagement. Look at the values now being established for TV rights and other broadcast content. There is big money paid for players. And this is all linked to delivering to sponsors the value they seek for their dollars.
The international sports industry is estimated to be worth $145 billion by 2015 (source PricewaterhouseCoopers). The current value of the sports industry in Asia is about $23 billion.
There are new crossover developments at the SCG, MCG, Adelaide Oval and the new sports and entertainment hub in Perth. These could be the forerunner or proving ground of a Westfield approach that ‘gets ‘em in for hours’!
With mega events, we are highly regarded in bidding, design and planning, operational management, workforce and volunteers planning/management, marketing, media and PR, ceremonies, city operations and legacy. It is in bidding that legacy is already a live issue.
This article is based on a presentation, State of Play: Australian Events on the World Stage, delivered by Eric Winton to the Australian Event Symposium 2012 – Finding our mojo: Creativity, innovation and the business of events, 14-16 September 2012. The presentation explored strategic, business and competitive pressures impacting events and tourism.
Eric is director at New Millennium Business, providing strategic, marketing and business activation advice to events companies in Australia and going global, targeting opportunities overseas. Our speciality is the business of events.