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Wales has always been relatively dependent on the declining seaside holiday market and finding
new and sustainable markets has become a priority. This article looks at the value of
business-related tourism to Wales and reports on a survey of the hotel-based meetings and
conference segment. From a survey of 74 hotels an estimate for the value of this segment in the
order of 294 million is offered; four times as much as official estimates of 'all' business travel to
Wales. It concludes that the importance of business tourism, and of meetings-related travel to
Wales, is significantly underestimated and has potential for further development and promotion.
Keywords: business tourism, hotels, meetings, conferences
Business tourism
Business tourism usually warrants an albeit brief
mention in today's travel and tourism textbooks. 4-6
Drawing on the wording of resolutions put by the
World Tourism Organisation to the United Nations
in 1992 business tourism denotes the activities of
persons travelling to and staying in places outside
their normal environment for the purposes of
business. 3 It includes all activities, same-day travel
and staying overnight, for which the principal reason
for being away from the 'normal environment' is
business, but it excludes all forms of commuting to
work and the regular working journeys of businessmen in their local areas.
The worldwide business travel market is considered to be enormous, accounting for 750 million
trips with an e s t i m a t e d value in excess of
US$320 000 million. 7 In the UK, according to figures from UKTS, there are something like 19
million business tourism trips taken each year,
equivalent to roughly one in seven or 15% of all
tourism trips and accounting for 8% of all nights and
23% of all tourism spending, s'9 Expenditure on
business travel in the UK is estimated to be worth in
the region of 11.3 billion per annum and, when
added to the overseas component taken from IPS,
that is 2.2 billion, it is reasonable to estimate that
total expenditure for business tourism in the UK
may be worth as much as 13.5 billion per annum. 3
Business tourism has grown strongly since the
1980s 1'11 and despite being buffeted by the downturn in national and international economic activity
in the first half of the 1990s it continues to grow
faster than tourism as a whole, l Business tourists
also spend more than holiday tourists and spending
by business tourists has increased at a faster rate
than for tourism as a whole. It is also less seasonal
and the peaks and troughs of demand are less
marked than for holiday tourism. 12 Furthermore, it
is realistic that as business activity returns to prerecessionary levels there will be considerable growth
in business travel. Business visitors are also a major
source of demand for hotel accommodation, 13 with
hotels relying heavily on business travel to fill beds
during the week. Business tourism accounts for at
least two-thirds of most leading hotels' occupancy,
80-90% of the market of three- and four-star
hotels 14 and 50% of budget hotels.15-17
The main component of business tourism, that is
general business travel, accounts for about 85% of
'all' business tourism, is primarily determined by the
pattern of economic activity and is largely predetermined. ~2 It should, however, be noted that a
proportion of general business travel may involve an
off-site meeting or it may have an incentive or
hospitality element that uses tourism resources such
as hotels. The second component, incentive travel, is
a difficult market to quantify because of its 'below
306
the line' nature; however, it is apparently an expanding market 1s'19 and the Meetings and Incentive
Association estimate that the UK incentive market is
worth 300 million and is growing at a rate of
10-15% each year.* The third component, meetings
and conference travel, accounts for around 12% of
the total business tourism market. 12 This sector
provides the focus for the research and is reviewed in
more detail below.
ing conferences it appears that the market for smaller meetings and conferences will be particularly
buoyant.
Conferences and meetings are increasingly used to
promote tourism destinations z1"23'26 since most
towns, resorts and cities feature hotels and other
facilities that can be used as venues. Spa towns and
seaside resorts were among the first to do so in order
to generate off-peak business and have since been
joined by many of the major industrial cities and
heritage destinations. The growing conference market has stimulated the provision of a wide range of
meeting and conference venues and a growing number of local authorities have invested in purposebuilt conference centres. However, purpose-built
conference venues only account for a small share of
the market and the majority of smaller meetings do
not normally require a separate venue and, particularly in the corporate sector, will use the facilities
within a hotel ~
Conferences can be an important source of revenue for hotels and as venues for conferences they
dominate the market accounting for nearly 80% of
all venues, 85% of all delegate days and 68% of all
delegate nights. Meetings and conference guests also
contribute more to a hotel's profit than general
business travellers. 27 In general, meetings and conference business gravitates towards three- and fourstar hotels and 'conference hotels' with large luxury
hotels representing 15% of venues and 50% of all
delegate days. More recently rural hotels, particularly country house hotels, have been diversifying into
the conference and meetings market as venues for
smaller, often upmarket, conferences where style,
beautiful surroundings and a tranquil atmosphere
are the preferred setting accounting for 24% of
venues and 9% of delegate days. 21
volume of independent business travel. Cardiff, particularly, is a dynamic business centre receiving
German, Japanese and American business travellers
because of companies such as Bosch, Toyota and
Hoover. Cardiff is also Wales's principal conference
destination and is rapidly becoming established on
the circuit for larger conferences attracting a share of
the UK associations market, although is less well
established as a destination for European and international events being outstripped overall by other
provincial destinations such as Birmingham and
Manchester.
North Wales does not have the same history of
industrial and commercial development as South
Wales. Consequently the region does not support
the same overall level of commercial activity and
does not attract the same volume of general business
travel. However, because the economic geography
of Wales runs east to west the region's potential as a
destination for business tourism is linked to the
business centres of Manchester, Liverpool and the
Potteries. The recent economic prosperity of these
areas has not been good, but in view of the renewed
importance of the Midlands and the North West as
centres of distribution for the UK within a wide
European market the economic outlook for the
region and the potential for business tourism is likely
to improve.
Mid Wales is predominantly rural, although many
communities, and particularly the accommodation
sector, benefit from tourism. As a destination for
business tourism Mid Wales offers secluded country
house hotels, historic meeting sites, shooting, fishing
etc. In the past, access to Mid Wales destinations has
been restricted but this has now been improved by
the M54, Shrewsbury and Welshpool by-passes linking the business centres adjacent to the Welsh
borders in Cheshire, Shropshire, Hereford and
Worcester where there are a growing number of
businesses that most probably have a frequent need
to hold smaller conferences and meetings and to
entertain clients.
Business tourism in Wales could increase substantially, especially if the underlying economic recovery
of Wales is sustained and especially if stimulated by
international-scale projects such as Cardiff World
Trade Centre and the Cardiff Bay Development.
During the last five years Wales has been the chosen
location for inward investment from overseas-based
companies attracting some 34 companies from Japan
and 140 from North America, bringing the total of
foreign-based companies locating in Wales since
1979 to somewhere in the region of 430. There are,
in addition, a considerable number of overseas and
UK companies located in England adjacent to the
3 29 The larger towns in Wales ha V e
Welsh border.-"
some imbalance between the available overnight
accommodation and the number of delegates for
larger events; in particular, there are few resort
307
destinations in Wales that have enough accommodation or which is of a standard to attract large
conferences. However, Wales does have a large
number of country house hotels of four-star standard
in areas such as Brecon, Gower and throughout Mid
and North Wales that are particularly well positioned for the smaller business meetings market
which may well include an incentive element.
Results
Seventy-four of the hotels completed the questionnaire. The distribution of hotels closely matched that
of the sample with 62% located in South Wales, 25%
in North Wales and 13% in Mid Wales. Of the hotels
surveyed, 60% were country house hotels, 32%
were larger modern hotels located particularly in
cities and towns or along routeways, such as the M4
motorway, and 6% of the hotels were seaside resort
hotels. Figure 1 illustrates the relative geographical
distribution of the hotels surveyed by their type.
The total number of events hosted by the hotels in
the sample was 16 249 and the total number of
delegates that attended these events was 606 322.
Taking the number of events and multiplying by
their duration and the number of delegates that
attended, a figure of 3 006 541 is obtained being the
total number of delegate days.
By applying a more detailed calculation separating
non-residential and residential delegate days and
multiplying by the average delegate day rate and the
average residential rate, which were 23 and 79
308
V = V1 + V2
V1 = ( n r t vl)
V2 = (r t v2)
that is:
say 215mn =
206 071 421 =
9 154 966 =
where:
V = total income from delegate bookings, V1 =
total income from non-residential bookings, V2 =
total income from residential bookings, n r t = total
non-residential delegate days, r t = total residential
delegate days, vl = average day delegate rate, and
v2 = average residential delegate rate.
Grossing-up these figures for the whole of the sample, i.e. adding a further 26%, a broad estimate for
the value of the hotel-based meetings and conference sector would therefore be 294 million. It
should also be pointed out that this estimate does
not include individual delegate spending on goods
and services not covered by the delegate rate and,
therefore, an all-inclusive estimate is likely to be
much higher. The estimate offered here however,
does not account for hotels discounting delegate
rates which was found to be common amongst the
hotels surveyed.
Sales meetings and training courses were the most
frequently held events accounting for 63% of all
events. Only 3% of all meetings had more than 50
delegates and less than 1% had more than 100
delegates. Figure 2 shows the distribution of delegate days for each type of event and Figure 3
compares the distribution of events, delegates and
delegate days.
The quietest months for meetings and conferences
were July and August although the distribution of
events was fairly evenly spread throughout the year.
Many hotels, however, mentioned that they did not
take bookings for meetings and conferences during
the peak holiday season because the hotel was busy
with holiday tourist trade. Some hotels, particularly
those that attributed more equal importance to both
types of trade, said that they were reluctant to accept
meetings and conference bookings on the basis that
they did not want holiday guests to feel 'second class'
or they felt that they could not give meetings and
conference guests the service and attention they
demanded. Also, the small size and lack of facilities
restricted some hotels from accommodating both
types of business at the same time.
The average occupancy across all hotels in the
sample was 58%, ranging from 47% to 82%, which
is higher than for hotels in Wales as a whole and is
considerably higher than the average for Mid Wales
and North Wales, although not much higher than
Resort hotels
Country
telhot~e
to =
Modern
North Wales
Resort hotels
Countryhotels
Modern hotels
Mid Wales
hotels
Country h
hotels
South Wales
Figure 1 Geographical distribution of the sample hotels by type
that for South Wales. 3 Figure 4 compares the
occupancy measured here with the occupancy for
Wales and the three regions; it also compares it with
the occupancy noted by Coopers and Lybrand 23
which tends to indicate that hotels in Wales that
offer meetings and conference facilities have higher
than average occupancy.
The relative importance of different areas as
source markets for meetings hosted by the hotels
surveyed is illustrated in Figure 5: 67% of all events
Tourism Management 1995 Volume 16 Number 4
[-7
Average
Wales all
13.5
52
47 I
Political 1%
anagement
Association 4%
Product 3'
Hotels surveyed
6%
51
Sales 29%
10
Figure 2
2O
I
30
I
40
Low
I
50
I
60
I
70
80
90
Percent
100
High
Figure 4
les 31%
Training 25%
Political 2%
Academic 7%
~ u c t
Management 16%
8%
Association 11%
Delegates
g 54%
Training 31%
ties 32%
Political 1%
Product 3%
Academic 3%
Political 2%
Product 4%
sociation 4%
~cademic 5%
,tion 10%
Management
Management 6%
Sales 29%
16%
Meetings
Delegate
days
Figure 3
310
Prodm
Sale:
Management
Political
/
l
All
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Days
Figure 6
Conclusions
The primary objective of this research was to provide an estimate of the size and value of the market
for hotel-based meetings and conferences in Wales.
It was also intended to identify some of the characteristics and trends in this segment and to offer some
informed comment with regard to business tourism
in general, and its importance to tourism and the
economy of Wales.
It should be remembered that the sample of 100
hotels selected for the purposes of this research is
unlikely to include all of those hotels used as venues
for meetings and conferences, and that 26 of the
hotels in the sample did not complete the questionnaire. The estimates of the size and value of the
hotel-based meetings and conference markets
offered here are likely to be understated. Nevertheless, according to this research hotel-based meeting
and conference tourism is worth somewhere in the
region of 294 million to Wales, which is nearly four
31 1
312
References
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30-32
2Wanhill, S 'Tourism 2000: a perspective for Wales' unpublished
(1992)
3Middleton, V T C 'Business travel to Wales' unpublished (1992)
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(1990)
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"Lickorish, L J, Bodlender, J, Jefferson, A and Jenkins, C
Developing Tourism Destinations Longman, Harlow (1991)
7World Tourism Organisation World Travel and Tourism Review:
Indicators, Trends and Forecasts CAB International (1992)
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~United Kingdom Tourism Survey (1992)
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(1990) 56-65
I~Smith, G V 'The growth of conferences and incentives' in
Howarth Book o f Tourism Macmillan, Basingstoke (1990)
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Analyst 1991 (4) 20-37
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313