After people's satisfaction with material life has reached a certain level, it has been followed by a higher and higher pursuit of spiritual and cultural life, and the warm welcome of performance events is a kind of embodiment. In the past two years, the cultural performance market has been in a hot state, and "hard to find a ticket" is quite common. According to data from the China Performance Industry Association, in the first quarter, the number of commercial performances (excluding performances in entertainment venues) nationwide reached 119,000, a year-on-year increase of 72.71%; The box office revenue and the number of spectators reached 10.8 billion yuan and 38.8699 million respectively, a year-on-year increase of 116.87% and 77.88%.
Events usually include sports events, concerts, business events, exhibitions, outdoor events, festivals and carnivals. The gathering of people brought about by mega events can often bring huge economic spillover effects, which also extends the discussion on mega event economy, that is, the promotion of mega events to economic activities.
The impact of events on a city is manifold. In the short term, mega events can boost the catering industry, tourism, etc.; In the long run, cities can showcase their culture and capabilities by hosting mega events, shaping their image and promoting long-term economic development. This paper analyzes the impact of mega events on the economy through data and case studies, studies the conditions for cities to develop mega event economy, and puts forward suggestions on how different types of mainland cities can stimulate the economy through mega events.
1. The impact of mega events on Hong Kong's tourism industry continues to expand
The significance of mega events to Hong Kong, China has changed a bit over the years. The significance of the earlier events to the local area was more about establishing the international image of the "Asian Events Capital". However, since 2003, there has been a lot of talk about the economic benefits attached to events. For example, a press release at the year stated that the 2006 Telecom World could "bring considerable business to the tourism and hospitality industry"; In addition, exhibitors will face a stronger demand for supporting professional services such as exhibition booth construction, design, marketing, advertising and event management.
Subsequently, the Hong Kong SAR Government continued to organise mega events as one of the ways to promote economic development. How is Hong Kong's economy related to mega events? Based on macro data from Wind and the Census and Statistics Department of the Hong Kong Special Administrative Region since 2014, we can observe the following:
1. Tourism is a major service industry in Hong Kong, China
From 2014 to 2022, the service sector accounted for 88%-92% of Hong Kong's GDP, making it the most important component of the local economy. Among them, tourism and professional services and other business support services are the main service sectors in the region, accounting for 3.6% and 11.9% of GDP respectively in 2019.
2. Tourists' shopping demand in Hong Kong has weakened
A comparison of the spending patterns of overnight visitors in Hong Kong in 2014 and 2019 shows that although shopping is still the most important consumption, its share has dropped from 61.7% to 47.5%. The local shopping consumption demand of overnight tourists has weakened compared with other needs, and the purpose of visiting Hong Kong may change to a certain extent.
3. The proportion of overnight visitors to MICE has increased
MICE is a type of event that can form MICE (MICE is generally considered to be a type of tourism that is formed by the four types of events: MICE travel, MICE and exhibitions). In 2023, MICE visitors accounted for 7.56% of overnight visitors, up 1.02 percentage points from 2014. Among them, the importance of MICE overnight visitors from Chinese mainland has increased significantly in Hong Kong's tourism industry.
Judging from these data, in recent years, the impact of mega events on Hong Kong's tourism industry has continued to expand against the backdrop of weakening tourist demand for shopping in Hong Kong.
2. Analysis of representative cases of event economy
As for the "event economy" frequently mentioned by the Hong Kong SAR government, other cities at home and abroad actually have more related cases. We select three representative types of events and activities and qualitatively analyze their impact on the economy of the host country.
1. Singapore Mildew Concert
American singer Taylor Swift (hereafter referred to as "Moldy") has embarked on her sixth world tour in 2023-2024. There is only one stop in Southeast Asia, Singapore.
The revenue generated by the concert itself is usually partly reflected in tickets, venue rentals, merchandise sales, and catering services for audiences before and after the event. In addition, there are more opportunities for businesses that offer "experiential" services in cities. The lyrics of a song by Mildew led to a ritual among fans exchanging friendship bracelets at a concert. According to public news, such a "ceremony" directly caused a long queue at the local handmade material store during the concert. At the same time, Singapore has launched activities related to mildew, free light and shadow water dance shows and architectural light shows, which can often drive residents' travel to a certain extent and promote the development of local service industries.
At the same time, the "Southeast Asia exclusive" nature of the event has become an incentive for fans from the surrounding region to come to Singapore to watch the show, which further supports the local airfare, hotel and catering revenue. The Riverside Bay Sands Hotel Singapore has launched three types of packages, including concert tickets, hotel accommodation, dining and attraction all-access passes, which has expanded the local economic benefits to a certain extent. In fact, it's not uncommon to offer packages for events, and The Fullerton Ocean Park Hotel Hong Kong has also launched a package that includes tickets to the ball game during the "Miami International Hong Kong Tour".
2. Paris Fashion Week
Paris Fashion Week, a traditional event, is divided into women's and men's wear, as well as spring/summer, autumn/winter, and is held four times a year. The added benefits of the event for the host city are mainly reflected in the following three aspects.
First of all, as a highly professional international event, Paris Fashion Week can attract designers, models, celebrities, buyers, brand customers and other groups from all over the world. In the context of the relatively long duration of each event (such as the 9-day Paris Women's Fashion Week in Fall/Winter 2024) and the daily show of different brands, the fashion week can bring considerable hotel and catering revenue to the local area. Secondly, along with the holding of fashion shows, there will also be more showroom ordering fairs in the local area, that is, clothing brands use temporary static spaces to display their clothing and accessories, connect with buyers and make sales. Most of the participants of Fashion Week have strong purchasing power, and the order fair can bring convenience to buyers and promote considerable consumption; On the other hand, it also brings stronger demand for local space leasing, design and other service industries. In addition, with the large number of celebrities participating in the fashion week, and the presence of various supporting events such as showroom ordering parties and cocktail parties, the income of local security companies and cleaning companies has also increased.
3. Harbin Ice and Snow World
Ice and Snow World is a large-scale ice and snow art boutique project launched by the Harbin Municipal Government in 1999. In this recent winter, the 25th Harbin Ice and Snow World "exploded". This event attracted many tourists, stimulated the local tourism industry, and increased the local catering and hotel revenue. During the event, the Harbin Transportation Group New Area Bus Company opened the Ice and Snow World Line and other lines, connecting a number of characteristic scenic spots, and the income of other attractions will also expand.
At the same time, we can also see the ice and snow world as a medium for the local dissemination of ice and snow culture. This event has also increased the motivation of tourists to experience ice and snow culture, and indirectly drove the income of other "ice and snow" themed projects in the local area. For example, in terms of food, in the case of the local company Modern launched cultural and creative popsicles in the shape of snowflakes, penguins, and landmark buildings in Harbin, the sales of Modern popsicles reached 100,000 in just three days on New Year's Day this year. The income from local ice and snow activities such as snow hot springs, ice and snow sports, fishing, hunting and winter fishing, and the sales revenue of ice and snow-related equipment have also increased to a certain extent.
3. Important conditions that cities need to meet to hold grand events
How are these cities developing their event economies? We have come up with a few important conditions.
1. Convenient transportation
In terms of international transportation, Hong Kong, Paris and Singapore are home to Hong Kong Airport, Paris-Charles de Gaulle Airport and Changi Airport respectively. Wind data shows that in 2019, all three airports handled more than 60 million passengers. In terms of intra-city mobility, Oliver Wyman and the University of California, Berkeley's Urban Transport Readiness Index 2023 evaluates and ranks 65 major cities around the world in terms of public transport density, efficiency and utilization, with Hong Kong, Singapore and Paris ranking first, third and seventh respectively. In the case of Harbin, the city has launched transportation routes such as the Ice and Snow World Special Line and the Shuttle Line. Convenient transportation is the basis for tourists to participate in local events and continue their tourism in the local area.
2. Professional and high-capacity venues
The Singapore National Stadium, the venue of the Singapore Musty concert, has a capacity of 55,000 spectators. Holding 6 concerts means that about 300,000 spectators can participate. Professional venues with large capacity are an important condition for holding large-scale events such as concerts and exhibitions. Singapore's presence at Sands Expo & Convention Centre, Changi Convention and Exhibition Centre, Raffles City Convention and Exhibition Centre, Suntec International Convention & Exhibition Centre and Singapore Expo are also important reasons why Singapore is one of the world's leading MICE cities. For example, the Sands Convention and Exhibition Centre has a capacity of 2,000 booths and 45,000 delegates, supporting the development of large-scale local convention and exhibition events.
3. Unique natural resources
Different from the concert event with its own "traffic", the event of Ice and Snow World can be said to be "created" by the city. Harbin was able to create this grand event based on its own unique natural conditions - ice and snow. From a global perspective, the Great Migration of animals in Kenya is also a typical example of the formation of a grand event economy based on natural resources.
4. International status and advantageous industries
Paris Fashion Week's continued global attention is based on its strong industry, the fashion industry, and its international status as the "Global Fashion Capital". Vienna is another representative city that relies on its international status to form a mega event economy. In the context of the Organization of the Petroleum Exporting Countries (OPEC), the United Nations Industrial Development Organization (UNIDO), the International Atomic Energy Agency (IAEA) and other international organizations setting up headquarters in the region, Vienna has reaped considerable economic benefits through conference-like events.
5. Subsidies and policy support
The provision of policy support and subsidies can facilitate the development of mega events. Singapore has provided a subsidy to ensure that the concert will only be held in Singapore, enhancing the impact of the event on the local tourism industry. According to information from the Singapore Tourism Board, the Singapore Business Events (BEiS) Subsidy Scheme, the Singapore MICE Advantage Scheme (SMAP) and INSPIRE Global 2.0 are available to help book and promote MICE venues and further attract MICE events to the local market.
4. What can mainland cities do to promote the economy through mega events and activities?
The Hong Kong SAR Government has repeatedly mentioned the development of the event economy this year, and cities in the Mainland can also organise mega events according to their own characteristics and expand the economic benefits brought by mega events.
Cities with relatively high levels of economic development, such as Shanghai, Hangzhou, and Beijing, have hosted the CIIE, the Asian Games, and the Winter Olympics in the past few years. Wind data shows that in 2019, the passenger throughput of Beijing and Shanghai airports exceeded 100 million, and Hangzhou also exceeded 40 million. According to the January 2024 urban rail transit operation data released by the Ministry of Transport, the operating mileage of these cities exceeds 500 kilometers; Moreover, these cities also have more professional venues. Under such basic conditions, holding large-scale exhibitions, cultural and sports activities is an important way for such cities to develop the event economy.
For cities with unique natural resources, such as Harbin with ice and snow characteristics, Kunming with a variety of flowers, etc., related products can be launched based on this, publicity and promotion, and grand events can be created. Specifically, related products can combine local characteristics with international culture and current fashion elements, so as to enhance the public's acceptance and attention to the event.
China has a vast territory and a strong cultural heritage. Since the beginning of this year, we have seen "sudden explosion" events such as "Wang Po Talking Matchmaker" extended by local culture; I also saw the planning and holding of events such as the F1 China Grand Prix and the "2024 Hong Kong and Shanghai Week", which ultimately supported the local industry represented by tourism. Here are three specific suggestions for the economic benefits of carrying out mega events and expanding them:
1. Further optimize infrastructure such as transportation and the industrial chain of mega events
In terms of urban transportation, the transportation routes connecting hotels and large-scale event venues will be further optimized. In terms of the event industry chain, we continue to pay attention to security, cleaning and other services to ensure the stability of service quality; Improve the level of professional services such as booth construction, design, publicity, etc., continue to optimize the environment and cultivate relevant talents, so as to make the service high-end and international, so as to enhance the international influence of the event.
2. Focus on the supply of supporting services
Providing ancillary services, such as catering services, peripheral product sales, ritual experience services, transportation services connecting to other attractions, etc., can expand the economic benefits of the event. Therefore, on the one hand, it is possible to increase the construction of restaurants and shops around the venues where large-scale events are held. On the other hand, during the event, we will provide support to stores that provide related supporting services, and help stores cooperate with each other to launch package services.
3. Prevent potential risks in advance and strengthen post-event public relations management
Growing an event economy requires sustainability, and a good experience often makes a local event attract more people, but a "bad review" often affects the subsequent development of the event. Therefore, in the process of organizing events, it is necessary to assess the potential risks in advance, prevent them, and strengthen the supervision of various related services. At the same time, if there is an incident that is not conducive to the reputation of the city, it should be dealt with in a timely manner and public relations management should be carried out.
(Image source: Visual China)
——
Text | Li Jiayi is a researcher at the China Business Research Institute
Contact Us | [email protected]
(This article is from Yicai)