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Korea's Convention Strategy

The convention business holds the promise of being a new strategic industry for Korea as well as putting the country on the map as an all-Asia business center

The convention business represents a dream industry for planners. As it is pollution-free, and has the potential to generate huge amounts of money with low investment costs as well as raise the international profile of a city or a country, no wonder the central and local governments are looking to make Korea a major convention destination for Northeast Asia in the 21st century.

The convention industry, also known as the international conference industry, refers to the group of activities that create added value through the hosting of a variety of international events. Such events include both international conferences plus expositions and exhibitions.

The convention industry covers a gamut of diverse businesses. Besides the operation of convention facilities and related services, it involves construction, transportation and communications, not to mention the tourism, leisure, hotel, entertainment, and foods and beverage industries.

Korea's hosting of the Third Asia-Europe Meeting (ASEM III) last year proved a huge boost to the local convention industry. Its prospects look set to be brightened further by the holding of a series of other large-scale international conferences or events, including the general meeting of the World Trade Organization (WTO) in 2001, the World Cup in 2002, and the general meeting of the International Union of Local Authorities (IULA) in 2003.

According to the Korea National Tourism Organization (KNTO), the average length of stay by foreign participants in an international conference in Korea is 7.5 days, more than two days longer than that by general tourists who average 5.2 days. Per capita spendings by participants in international conferences amount to $3,285, over twice the $1,491 for general tourists. These facts highlight another characteristic of the convention industry: it is, in essence, an export industry without smokestacks but one which generates high levels of foreign exchange earnings. In fact, the visit of one foreign participant to an international conference in Korea has the same economic impact as that of the export of nine TV sets.

The convention industry is also regarded as being strongly knowledge-based as it accelerates the generation and distribution of information. As most attendees at an international conference tend to be opinion leaders in their respective fields in their home countries, their influence on global information and exchange of knowledge is significant.

The international convention market is estimated to be worth $100 billion annually, with some 10,000 international conferences being held worldwide every year. According to the Union International Association (UIA), Korea's ranking as a convention venue has recently escalated, jumping 10 places from 35th in 1998 with 58 events held, to 25th in 1999 with 97.

However, Korea ranks low compared to the world's "Big Four" convention destinations -the United States (1,202 events held in 1999), France (633), Britain (608), and Germany (602). In Asia, Korea also lags in the convention stakes. It ranked ninth in 1999, far behind Thailand and the Philippines, Japan, Singapore, and China. The United States earns several tens of billion dollars every year through its hosting of international conferences, but Korea's earnings in 1999 reached a mere $300 million. The Seoul government only belatedly became aware of the importance of the industry, as attested by its passing of supportive legislation as late as 1996.

Experts here characterize the sluggishness of the domestic convention industry as a hardware problem, the shortage of special convention centers and other facilities necessary to attract large-scale and composite international events.

 With the exception of the Convention Center of the Convention and Exhibition Center (COEX) in Samsung-dong, southern Seoul, the venue of ASEM III, there are no special facilities to host international conferences in Korea. Although several top-class hotels are equipped with facilities for international conferences, about half of them are concentrated in Seoul.

Another shortcoming pointed to is that Korea is one of the world's most high-cost destinations for foreign travelers. Of the 100 largest cities in the world, Seoul ranks among the top 20 in terms of accommodation costs. Neither, it is said, does Korea have a sufficient number of professionals capable of developing, attracting and planning world conferences, nor those with a good enough command of foreign languages and computer skills to successfully execute them to international standards.

Expanding Convention Hardware

Amid such criticism of the domestic convention industry, it has lately been undergoing an expansion on the hardware side with the steady opening of international-level centers.

The COEX Convention Center opened in May last year. With 10 exhibition halls and 54 conference rooms on a total floor space of 60,000 square meters, the center is the biggest facility in Korea specializing in the holding of conventions. The COEX was built specifically to both host ASEM III and to provide the developing Korean convention industry with international-level infrastructure. ASEM III was an extremely complex, large-scale diplomatic event that attracted 3,000 dignitaries including the leaders of 26 European and Asian countries, 1,000 national delegates, 1,200 journalists and business people, 250 aides, and 200 security personnel.

Twenty-six large-scale international conferences, including the Seoul general meeting of World Trade Centers Association (WTCA), are scheduled to be held at the COEX this year. It will host 10 major international conferences in 2002 including the general meeting of the Federation Internationael de Football Association (FIFA).

The Convention Center features up-to-the moment facilities, including spacious conference rooms, a well-appointed convention hall, a VIP conference room, and food and beverage services provided by the top-ranking Westin Chosun Hotel. A 100MB-transmission speed fiber optic cable system was installed to support advanced information services, including high-speed Internet services.

The Convention Hall was the venue where separated families from North and South Korea met collectively Aug. 15th last year. It is the nation's biggest event space, with the capacity to accommodate up to 7,000 persons at a time. It is also the second-largest convention center in Asia, after the Singapore International Convention & Exhibition Centre. It is capable of holding large-scale gatherings such as sports events and party conventions, as well as major international conferences.

ASEM Hall within the center was used as a conference area for the top leaders at ASEM III, and could be utilized to host similar high-level diplomatic meetings. It is circular in shape and can accommodate a maximum of 80 conferees at a time. With their ability to handle up to 17 foreign languages at a time, the hall's simultaneous interpretation facilities represented a world-first. Adjacent to the hall are 10 small- and medium-sized conference halls and a lounge where small-scale receptions can be held.

The center's 1,090-seat auditorium is a theater-style international conference hall designed to hold a variety of cultural events. During ASEM III, it was used for the opening and closing ceremonies of the event, and as a press conference hall. The 1,817-square meter Grand Ballroom was used as a dining hall for the North/South separated families during their Aug. 15th meeting. Designed to hold a multiplicity of events, it can accommodate up to 1,600 persons simultaneously.

The Conference Center can be divided into a maximum of 50 conference rooms, and as such can accommodate all types of meetings from two-person talks to large-scale international conferences. It also features a 200-square meter press and business center, a 2,000-seat restaurant, and a range of other amenities.

Trading on the quality of its facilities, the COEX plans to actively pursue the upscale corporate end of the convention market, specifically the annual general meetings of domestic and multinational enterprises. A number of other convention centers are to open in the next few years -the Taegu Convention Center in May this year, the Busan Exhibition & Convention Center (BEXCO) in September, the Jeju International Convention Center in 2002, and the Suwon Convention Center in 2005.

Based on a 157,000-square meter lot, the BEXCO will house four exhibition halls; a representative indoor exhibition hall of 26,500 square meters, a small- to medium-sized exhibition hall (1,100 square meters), a permanent exhibition hall (2,400 square meters), and an outdoor exhibition hall (13,200) square meters). It will also have three conference rooms - a large conference room plus a small- and a medium-sized conference room. With the ability to accommodate up to 5,800 guests, these conference rooms feature an international screen conference system and a simultaneous interpretation system capable of handling up to eight foreign languages at a time.

The opening of the convention center will be celebrated by the holding of the 2001 Busan International Motor Show as its inaugural event.

The BEXCO has already attracted 13 international events prior to its opening. The draw that will form qualifying teams into groups prior to the final competitions of the 2002 World Cup will be held at the BEXCO Dec. 1st this year. Ten large-scale international events will be held in 2002 including the general meeting of the World's Dedicated Volunteers and Managers (April 24th to 27th), the general meeting of the International Association of Lions Clubs (April 25th to 26th), and the Asia Far-East and South Pacific (FESPIC) Games for the Disabled (Oct. 26th to Nov. 1st).

Said BEXCO president Lee Tae-soo, "We also plan to host cyber exhibitions to promote Busan as an international convention destination to boost our competitive edge in the regional convention market."

The International Convention Center Jeju (ICC JEJU) to be completed at the end of 2002 has set a goal of attracting 21 specific large-scale international conferences from 2003 to 2008 that are each expected to draw between 1,000 and 7,000 participants. To date, three such events, including the general meeting of International Academic Society for Noise and Vibration in 2003 and the annual meeting of Pacific Area Travel Association (PATA) in 2004 have been confirmed.

Thanks to its superior convention center facilities and special merits as a sub-tropical tourist resort, Jeju City is expected to attract a considerable portion of the remaining international conferences. This is especially so since the KNTO and the ICC JEJU are pooling their efforts to draw international convention traffic to Korea's vacation island.

The Need to Beef-up the Software Side

To be a top contender in the international convention market, Korea must acquire both the necessary professional personnel (software) and the infrastructure (hardware). Compared to improvements in hardware, the software side is still deficient. It has thus emerged as the most urgent issue to be addressed to ensure the continuing development of the domestic convention industry.

As it is estimated that 4,000 persons are required for the normal operation of one convention center, more than 40,000 professionals will be required in Korea when taking into account the personnel demands of the COEX Convention Center and the new convention centers to be established in Jeju, Busan, Taegu, and Suwon, industry experts say. However, the number of Professional Convention Organizers (PCO) active in Korea is only 400 actually, demonstrating the serious shortage of specialists in the field.

To solve the shortage of professionals and ride the crest of the convention industry boom, a growing number of professional educational courses have been established. Hallym University and Jeju Tourism College have already launched regular courses on international conference management. Hallym University also offers a master's course on the subject, the first in Korea, and has the greatest resources of associated material.

In addition, Ewha Women's University, Myongji University, Yongin University, the Institute of Convention and Event Management (ICEM), and the Korea Productivity Center now offer special educational programs in the convention industry. In cooperation with the Trade Academy of the Korea International Trade Association (KITA), the COEX recently developed a new program to foster specialization among exhibition and convention industry professionals.

 In addition, the Korea Convention Event Cooperatives was established in August 2000 and now has 55 member companies. In an inaugural speech, Cooperatives chairman Lee Soo-yeon said, "As the convention industry has close connections with the exhibition, event, tourism, hotel, and information industries by virtue of its peculiar character, we need to build a network to foster cooperation among professionals in the industry. With this aim in mind, we have established our organization."

Support for the domestic convention industry is now being recognized as vital to the country's economic future. Speaking at a symposium held at the Korea Federation of Small Business Oct. 12th last year, Prof. Kim, Yong-kwan of the tourism department of Yongin University, said, "The export policy focused on the manufacturing industry has competitive limits. As a result, now is an opportune time for the government to foster the convention industry through exhibitions, fairs, and other promotional events in order to develop it as a strategic industry and so enhance national export competitiveness."

Building a Business Center for Asia

From a strategic point of view, the attraction and potential of the Korean convention industry may be gauged by the national economic structure, presently over 60 percent trade dependent. With an economic structure so heavily dependent on exports and imports, the well-being of the country is highly vulnerable to external shocks such as trade protectionism and fluctuations in the foreign exchange rate and raw material prices.

In consequence, Korean trade experts claim that Korea needs fresh export strategies to expand and develop the scope of the trade, including services, in the 21st century. In particular, they point to the need for Korea to formulate a growth-oriented strategy focusing on logistics, distribution and financing, away from the commodity trade-first policy of the past that centered on mass production and marketing. They finger the convention industry, in this regard, as having the potential to position Korea as a major commercial hub within Asia.

Furthermore, they stress Korea is well-situated to take on such a role, located at the juncture of China, the world's most populous country, Russia, the country with the biggest land-mass (and arguably the world's most resource-rich), and Japan, the world's second-largest economy. Within a 1,200 kilometer radius of Seoul live a population of 700 million, one of the most densely populated areas in the world.

As a result of its location and its high quality labor resources, Korea has been successful in attracting leading multinational enterprises (MNEs) such as Texas Instruments, BASF, and Volvo, which view the country as a platform from where to penetrate other East Asian markets. As more MNEs come to look upon Korea as a center where global strategy is executed, the more it will become a point to which international decision makers will convene.

For example, the Volvo Group summoned the company's executives from all over the world to Volvo Construction Machinery in Korea for a directors's meeting in October 1999, boding well for the future of the domestic international conference industry. To capitalize on this trend, the KNTO Convention Bureau, a division of the organization mandated with developing the domestic convention industry, has been focusing on attracting more MNE conferences in cooperation with top-class hotels. As Korea's geopolitical and economic status continues to improve within Northeast Asia so too will the conditions that will foster the growth of the domestic convention industry.

Targeting the International Conference Business

Korea's top-class hotels are presently engaged in stiff competition to attract more international conferences, offering deep discounts on room rates and the lease of conference equipment. Below is a profile on what three of Korea's five-star deluxe hotels are offering to lure world-class convention events.

Grand Inter-Continental Seoul

The Grand Inter-Continental Seoul, located in
the World Trade Center Seoul, features a huge banqueting hall that can accommodate over 2,000 persons, two small banquet halls, and 14 conference rooms.

In consideration of the social prominence of the majority of participants in international conferences, the Grand Inter-Continental has set aside 273 rooms or over 50 percent of its entire 541 guest rooms for use as suites. It will also open a general guest room that will be the most spacious among top-class hotels in Korea. The newly established COEX Inter-Continental Hotel, also in the World Trade Center is equipped with 16 banquet halls designed to accommodate all kinds of events from small-scale gatherings of 15 persons to large-scale meetings of 1,500 participants.

The biggest advantage of the COEX Inter-Continental Hotel is its proximity to the COEX Convention Center and location in the World Trade Center where numerous international conferences are held. The COEX Inter-Continental Hotel is connected internally to the COEX Conference Hall. The hotel has successfully hosted a variety of international conferences, including those of the International Federation of Automotive Engineering Societies (FISITA) and the Institute for Operations Research and Management Sciences (INFORMS).

Reflecting the rapidly increasing demands of business guests, the Inter-Continental Grand has 95 rooms equipped with facsimiles, printers with copying and scanning functions, and personal computers equipped with highly efficient domestic and foreign software.  It also provides stenographic, translation, cable, and telex services. Three small-size conference rooms in the business center are also equipped with OHP and slide projector facilities for meetings which require audio-visual presentations.(http://www.seoul.interconti.com or www.interconti.com)

Seoul Hilton Hotel

The Seoul Hilton Hotel offers a large, 2,368-square meter convention center which can be divided into five sections for multi-purpose use. It is designed to hold events as varied as parties, fashion shows, and exhibitions, not to mention a large-scale international conference. It also boasts a computer-controlled lighting system, a sound control system, a simultaneous interpretation system for eight languages and advanced audio-visual equipment and instrumentation.

The convention center has successfully held a number of large-scale international events. They include the 1983 meeting of the Inter-Parliamentary Union (IPU) and the annual meetings of International Monetary Fund (IMF)/International Bank for Reconstruction and Development (IBRD) in 1985 and the Seoul Olympic International Science Council in 1988. They also include the general meetings of the International Association of Lions Clubs in 1995, the Financial Times International Economic Forum in 1998, and the International Criminal Police Organization (Interpol) in 1998. Following a refurbishing program in 1998, it now offers state-of-the-art projection and sound facilities.

The Grand Ballroom can accommodate all manner of small- and large-scale banqueting events to a maximum capacity of 1,000 guests. It now features a video/beam projector/screen system to relay images of an actual event in real time. Meanwhile, the Chrysanthemum Room has a maximum capacity of 200 guests, but can be partitioned to accommodate groups of 20.

To cater for international banqueting events, five multi-wide screens have been installed plus a simultaneous interpretation system that can deliver translated speech to a maximum of 1,200 guests. Small-size gatherings may be held in the five banqueting halls that offer a scenic view of Namsan Park and its mount. (http://www.hilton.com/ hotels/SELHITW/index.htm/)

Grand Hyatt Seoul

For grand scale meetings and conventions, the Grand Ballroom of Grand Hyatt Seoul provides the most elegant venue in the city. It has the capacity to seat 1,000 at banquets and accomodate up to 2,000 for cocktails. Also, it may be divided into three major rooms according to the requirements of each event. As it is designed specifically for multi-purpose use, the ballroom is used for such diverse events as international conventions and trade fairs as well as banquets, family meetings, receptions and fashion festivals.

The ballroom combines beauty, flexibility and state-of-the-art technology, the soft gray and blue tones of its carpets, walls and ceilings creating an atmosphere of restrained elegance.

From the beautifully landscaped entrance with its waterfall pond and seven-meter fountain, through the impressive entry with its unique black crystal chandeliers and marble floors, to the meticulously designed rooms and support systems, everything has been planned to provide guests with an ideal setting for a wide variety of functions.

One of the major merits of the hotel is that it offers seven spacious function rooms, efficient alternatives for the smaller scale business meeting. The Grand Ballroom and each of the hotel's function rooms are equipped with state-of-the art satellite technology, affording clients the opportunity to link via real-time video transmissions with their worldwide organizations without the time or expense of overseas travel.

The hotel's satellite-conferencing systems allows local conference attendees to see and speak with their counterparts in other parts of the globe as if all the participants were gathered together. The hotel's "plug-and-play" Internet access provides a truly interactive environment. Its VPN (Virtual Private Network) tunneling protocol makes it possible for users to securely access their home networks at speeds up to 10 Mbps or 10,000 Kbps, 347 times faster than a standard 28.8 dial-up modem.

Located at the foot of Mt. Namsan, 30 minutes from the World Trade Center and the Convention and Exhibition Center, only 10 minutes from the downtown business center and within walking distance of the Itaewon shopping district, the Grand Hyatt Seoul offers total convenience for its guests.
(http://www.seoul. hyatt.com or www. hyatt.com)

Updated January  3rd 2001, By Kwan-Seok Lee ( kslee@kotra.or.kr )