Not to be confused with pesky rodents, many hotels in Moscow welcome MICE — meetings, incentives, conventions and exhibitions — which make up large proportions of their revenue. Following a major downturn in the city, hoteliers and commentators say business in this important side of the hotel industry has recently been picking up again.
“Business last year dropped quite a bit, especially for conferences, whose organizers and participants were lacking money. I would say that we were down roughly 30 percent,” said Nicolas Kipper, general manager of the Marriott Grand hotel in central Moscow. Given that MICE business accounts for about 75 percent of catering and up to 10 percent of room bookings at the Marriott Grand, this totals to a significant amount of revenue, Kipper said.
But this year, conference and event numbers have been better already. “I can see the market coming back, even though I myself have not been operating for 16 months,” said Anthony Fardon, who has worked in Moscow’s hotel scene for 12 years and is general manager of the city’s recently opened Renaissance Monarch hotel.
“Obviously any hotel’s reliance on MICE revenue depends on its overall room revenue,” Fardon explained. “But it’s improving again, even though in Moscow there are not so many incentives, mainly due to the history of metro bombings, traffic and the visa requirement putting people off,” he added.
Companies often use incentive programs for team building or to reward employees or clients. However, Moscow typically does not host nearly as many incentives as it does meetings and events, which require direct bookings with hotels and have been the most discernible improvers in the MICE sector since the start of this year, Kipper said.
Hotels’ major conferencing clients during the crisis have been pharmaceutical companies, as well as IT, cosmetics and other consumer goods firms, said Dmitry Smirnov, editor of Event magazine. “That’s the incoming story,” he said, “but it is also interesting to see how international pharma firms have reacted to [President] Medvedev’s plans to support the domestic industry — by flying delegations of Russian cardiologists to Paris for incentive trips, for instance.”
Indeed, it is not necessarily just a drop off in Moscow that has affected revenue, but also a change in the demand structure for MICE business, Smirnov said. Many events have become more business-focused rather than being simply elaborate entertainment, and some companies have preferred to schedule corporate events in St. Petersburg, where hotels are cheaper.
Yet optimism in Moscow remains high. “We are feeling a new supply coming, but overall we expect good results by year-end,” outlined Vanja Desmonde, director of sales and marketing at three of Moscow’s Marriott hotels.
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