REPORT
Research & Insights
Is the MICE and arena event business really over?
The spread of the new coronavirus is forcing changes in various industries. Among them, the event industry, along with the food and beverage industry and the accommodation industry, is experiencing a freeze in business itself.
In order to prevent the spread of the new corona, events such as MICE (exhibition halls and international conferences) and live concerts have been cancelled across the board. This is the first time I've ever been to a MICE event. The future of the event business remains unclear at a time when the prevention of infection through the avoidance of "three secrets" is crucial.
Aichi International Exhibition Center that turned profitable in its first year
As a policy advisor to Aichi Prefecture, I facilitated the concession (the sale of the right to operate infrastructure to a private consortium for a certain period of time) of the Aichi International Exhibition Center (AICEC), which opened in August 2019. Currently, he is involved in the new construction and relocation of the aging Aichi Prefectural Gymnasium (New Arena).
For the construction of the Aichi International Exhibition Hall, we adopted at-risk CM (open-book construction management in which the general contractor discloses costs) for the first time for a large-scale public building, in order to optimize specifications, functions, and construction costs. The management rights are held by the GL Events (France), the world's largest exhibition center operator, acquired the management rights as the representative company, and we promoted the attraction of overseas events. The fact that we were able to achieve a profit in the first year was due to the successful functioning of the public-private partnership with Aichi Prefecture. </span
2020 is going to be very tough on our feet, with events being cancelled across the board due to the Corona disaster. I'm not worried about the arena opening in a little while, but it will change the way we attract people.
However, I myself do not believe that the MICE business is dead at all. I think it will continue to be in a difficult situation for some time to come, but I believe it will be revived in a new form adapted to the era of infectious disease pandemics.
Infections can be controlled with hardware and software.
One reason for thinking this is that infectious diseases such as new coronas can be controlled to some extent by hardware and software. Existing facilities will require additional investment, but it is probably possible to reduce the risk of infection by improving ventilation performance, sterilization and disinfection, and other aspects of facility hardware. In addition, guidelines have been issued for operational aspects such as thorough social distance, temperature checks, admission restrictions by time of day, and traffic flow. We cannot reduce the risk of infection to zero, but we can control the risk to some extent. </span
In fact, the "Nagoya Monozukuri World" was held at AICEC in September 2020. I attended the first day of the event with Governor Hideaki Omura and was surprised by the large number of visitors even though it was only in the morning. State-of-the-art thermal cameras (thermal imaging cameras) were placed everywhere, and the event was held in a thoroughly sanitized environment, but seeing so many people eagerly discussing business reminded me of the importance of face-to-face communication, which cannot be done remotely.
But what I think is even bigger than that is the evolution of technology. When the next generation communication standard "5G" and the next "6G" become widespread, it will be possible to send and receive large amounts of data at super high speeds that are incomparable to those of today. When this happens, there is no doubt that the business of exhibition halls and arenas will change dramatically.
Exhibition business to change drastically with "5G" and "6G".
For example, by using holographic technology to illuminate three-dimensional objects and haptic information transmission technology to transmit tactile sensations to remote locations, we can create 3D images of ourselves and allow people to participate in remote meetings as if they were actually in the meeting. On the other hand, a hologram of an artist could be used to communicate with the audience. Conversely, it will soon be possible to project a hologram of an artist and attend a live performance in a small hall or room nearby.
If it's a trade show, you could stay in a separate room or a nearby hotel and attend the show through a hologram, or actually go to the booth and be briefed by a hologram salesperson. </span </span
In the same way that corporate offices are spread across headquarters and countless satellite offices, exhibitions and international conferences will become a hybrid of on-site travel and virtual participation from satellite venues, hotels and homes. We think it will be a hybrid. </span
The new arena, scheduled for completion at the end of fiscal 2024, will be operated under the "BT (Build Transfer) Concession" method*, a form of PFI. We have already begun prehearing with potential business candidates, and despite the current situation where the event industry is in total collapse, many companies are showing extremely strong interest in operating the new arena. The reason behind this is the aforementioned advancements in technology, and the strength of this interest is why we are finding hope in the MICE business.
*A method in which the operator designs and constructs the facility based on its own proposal, then transfers the ownership of the facility to the prefecture and establishes the right to operate it.
In the future, existing exhibition halls and other facilities will need to make additional investments to be ready for "5G" and "6G". Considering the lack of international standard exhibition halls and arenas before Corona, some municipalities may think about building new exhibition halls.
However, even though the evolution of technology will create new business models, it is easy to imagine a situation in which it will take longer to recover investments than in the past.