A new index which ranks cities in terms of their competitive strength for attracting international conventions was launched at the ICCA Annual Congress this week in Dubai.
GainingEdge CEO, Gary Grimmer said that the index will help destinations gain insights into how much convention business they should expect to host on an annual basis.
“ICCA Statistics provides a great source of information on how many meetings are being held in cities around the world”, Grimmer said, “But, until now, destinations had no standard reference for how many conventions they should reasonably expect to have.”
Grimmer said that the purpose of the new index was to help cities in their goal setting and also to provide a meaningful new resource for use in their strategic planning processes.
The index scores cities based on their strengths in relation to 11 key drivers that GainingEdge says influence association decision making during destination selection processes. The first three are the “hygiene factors” (the essentials) including convention centre capacity, hotel capacity and air access. These account for 45% of the weighting on scores. The next three are “competitive advantage” factors including the size of the destination’s association community, cost and destination appeal in both a business and tourism sense. These account for 30% of the weighting. The final 25% of the possible points relate to what GainingEdge calls “key differentiators” which include logistics, market size, economy, business environment and safety & stability.
The database which underpins the index was developed through both primary research and use of 29 third party indices and data sources, including ICCA Data, all of which are used to score the relative strength of destinations in relation to each of the drivers. The index uses a 1,000 point scale and each city’s score out of 1,000 determines its place in the ranking.
Paris, France took top marks in the new competitive index, while it came in second in the ICCA list of busiest convention cities in 2017. However, Grimmer said that there is not a direct correlation between the ICCA numbers and those in the Competitive index.
“Our index really has nothing to do with which are the most successful cities. And, we are also stressing that this is not a qualitative study. This is not about which cities are the best choices for international conventions, this is about which cities overall have the most competitive products.” Grimmer said. “There are many reasons why different destinations are chosen for a given convention. This is an assessment of how destinations compare in general, in terms of their product offerings as well as other factors that are most frequently considered in destination decisions.”
As part of the index, GainingEdge has also created a scenario model which plots the cities based on two considerations, first whether their business is growing or declining and second whether they are hosting more or fewer conventions than the competitive index suggests that they should.
“We think that the scenario model will help destinations to gain insights into where they are and whether they should be in market share building mode, or market share protection mode,” Grimmer said.
Grimmer said that the index should have a lot of useful applications for bureaus and destinations. These include:
- Competition analysis – the Index provides useful metrics on each of the cities that can be incorporated into a given city’s market planning.
- Goal setting – helping cities and their stakeholders better understand realistic business expectations.
- Performance measurement – over time the index can help cities track their performance against competitive sets.
- Strategic visioning – helping cities to set visionary goals that are attainable over time.
- Strategic planning – providing useful insights into developing strategies and more importantly distinguishing the competitive factors that are needed to drive success in reaching strategic goals.
- Strategic resourcing – support in evaluating the resource needs that align with strategic aspirations.
- Strategic product development – offering information that helps them identify the product issues that require priority attention and validating to policy makers and stakeholders what needs to be done.
- Communications and branding – helping them identify key issues that need to be addressed in a destination’s communications processes.
Grimmer said that in many cases the findings are counter-intuitive. “Some people may be surprised that the index shows certain cities to be more competitive than others. One of our points in the index is that bigger isn’t always more competitive. The issue isn’t always how much capacity a city has but rather if it is adequate for market needs. For most meeting planners the issue is more about adequacy of capacity than it is about scale.”
GainingEdge has introduced the concept of fair share into the equation. By factoring the competitive strength of destinations against the total business being produced in their competitive sets, the index can give them an indication of whether they are ahead or behind where they should be.
“We think providing a means of calculating fair share will be very powerful for cities as they seek to align government expectations with the resources required to get the job done.” Grimmer said. “If governments want to hold bureaus and their industry stakeholders accountable for results, then governments need to also be accountable themselves on making sure that the bureaus have the resources and the destination has the favourable policies needed to get the job done.”
The initial index included the 54 cities that ICCA lists as having hosted 150 or more international conventions in the three year period between 2015-2017. GainingEdge plans to expand that list on an annual basis so that more destinations are included in the project in the future.