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Business
Print Edition> Business
UPDATED: March 5, 2012 NO. 10 MARCH 8, 2012
Gaining an Edge in the MICE Industry
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A bird's-eye view of CNCC (COURTESY OF CNCC)

On August 8, 2008, the Olympic Games were held in Beijing, bringing the China National Convention Center (CNCC) to the center of the world stage. CNCC, the largest conference and exhibition center in Asia, is located in the heart of the Olympic Green, adjacent to the National Stadium, often known as the Bird's Nest, the National Aquatics Center, known as the Water Cube, and the National Indoor Stadium.

After the 2008 Olympic Games, CNCC returned to its original function—an international convention and exhibition facility. It began to make profit less than a year after it opened to the public, thanks to its market positioning, as well as good operation and management model.

Liu Haiying, General Manager of CNCC, recently shared CNCC's experience with Beijing Review.

Beijing Review: CNCC was built for the 2008 Olympic Games. Did its original designers give much thought to the facility's function after the Olympic Games?

Liu Haiying: Since CNCC was opened to the public more than two years ago in late 2009, it has produced good economic and social benefits. It began to make a profit in 2010, its first full year in operation, which was incredibly quick for a former Olympic facility.

Now, 15-20 percent of large conferences in China are accompanied with exhibitions, so they need a lot of space. CNCC's original design took into consideration its market positioning and function after the Olympic Games.

At the outset, CNCC's management team conducted market research and came up with the conference-plus-exhibition design plan for the facility. The exhibition hall on the first floor covers an area of 22,000 square meters, which means it is large enough for 85 percent of the exhibitions held in Beijing. Now, its exhibition area has been expanded to 40,000 square meters. Thanks to the far-sighted design, large scale conventions and exhibitions can be held in the center simultaneously.

Currently, competition in China's convention and exhibition market is very fierce. Many conference and exhibition centers use price competition as a major business strategy. What are your thoughts on that?

Price competition is not CNCC's strategy. We have three key business areas: conference, exhibition and catering services. Every business has its own market positioning. In the conference market, we position CNCC as the "ideal place for high-end, large conferences" to attract high-end customers. In the exhibition market, we position CNCC as "the best venue for high-end small and medium-sized exhibitions." In the catering service market, we position CNCC as an dinning place with exceptionally large capacity, being able to accommodate 10,000 guests at a time.

Because of our position at the high-end of the market, we have never engaged in price competition. Now, CNCC's positioning has been accepted in the market. Our quality service has not only given customers an optimal experience, but also boosted customer's own value and image.

CNCC's rent is the highest in Beijing, while its occupancy rate is the highest in China. A large conference may cost 20 million-30 million ($3.2 million- 4.8 million), which almost equals the annual revenue of some conference and exhibition centers. In 2011, as the venue of 831 conferences and 69 exhibitions, CNCC received about 300,000 meeting participants, 18,000 exhibitors and 1.14 million visitors to exhibitions. It received 350-plus distinguished guests above the rank of government minister.

This year, CNCC is expected to make a profit of 100 million yuan ($15.9 million).

Its catering service is the trump card of CNCC. Can you talk about CNCC's catering business in detail?

Most conference and exhibition centers in the world do not have good kitchens, and so they rely on their business partners for the catering services. Yet, food quality is often somewhat compromised in the delivering process, and is hardly satisfactory to customers, which has affected the income structure of most conference centers in China.

In 2007, CNCC's management team strived to gain ISO 22000 Certification for food safety management system, and Hazard Analysis and Critical Control Point (HACCP) Certification. To meet these standards, before the Beijing Olympic Games were over, the kitchen on the first underground level was expanded to cover 5,500 square meters; kitchens were added on the first to third floors, and every meeting room on the first to fourth level can be used for banquets and buffets.

To produce delicacies in both Chinese and Western styles, we hire senior local and foreign chefs. Currently, CNCC's food supply capacity is the largest in the industry. The catering service has become the most competitive business module of CNCC.

Over the years, we have keenly realized that high standard catering services can also elevate CNCC's qualification and attract conferences and exhibitions at a higher level.

The catering service has significantly increased CNCC's sales. In 2011, a total of 2.18 million people dined in CNCC, contributing one third of CNCC's total income.

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