Unlocking Africa's MICE Potential: Overcoming Challenges and Seizing Growth Opportunities in a Booming Industry

AAfrica's Growing MICE Industry

The global business events industry, also known as the MICE (Meetings, Incentives, Conferences, and Exhibitions) sector, is thriving. In 2023, it was valued at an estimated $523.3 billion (R9.7 trillion) and is projected to reach $1,384.9 billion (R25.5 trillion) by 2032, with an impressive compound annual growth rate (CAGR) of 11.4% from 2023 to 2032.

Africa shows promising growth. Africa’s business events industry was valued at an estimated $16.6 billion (R295 billion) in 2023 and is projected to reach an estimated $65.6 billion (R1.2 trillion) by 2032, at a compound annual growth rate of 16.8%. South Africa’s MICE industry was valued at $6.6 billion (R121.8 billion) in 2023, expected to reach $25.9 billion (R477.9 billion) by 2032, this is according to an Allied Market research report.

Africa's MICE industry is poised for exponential growth, the continent’s growth rate seems is foreseen to outperform other regions such as the Americas, Europe, and the Asia-Pacific.

Inflation and High Operational Costs Hindering Growth

Despite the promising outlook, Africa’s MICE industry faces significant barriers, with inflation being a key challenge. The pandemic exacerbated inflationary pressures across the continent, impacting supply chains, devaluing local currencies, and increasing import costs due to global trade disruptions.

Governments’ responses, in order to curtail inflation, included fiscal stimulus measures and borrowing. In 2023, Africa’s inflation rate stood at 18.4%, much higher than the global average of 6.8%. This rising inflation has led to increased operational costs in the MICE sector, with expenses for lodging, transportation, catering, and convention services increasing by 15%. These rising costs not only reduce Africa's competitiveness in attracting international events but also make it more expensive for delegates to attend.

Inflation and high operational costs are significant challenges to the growth of Africa's MICE industry, threatening its competitiveness.

Additionally, the highly competitive environment for securing business events, has led to enduring cost-consciousness among event organisers. The need for innovative strategies to cut costs, such as incorporating group fares into meeting programs, has become crucial.

Leveraging Experiential Travel and Industry Growth to Overcome Challenges

Despite these challenges, there are several factors driving the continued growth of Africa’s MICE sector. The rise of experiential travel has created demand for unique and immersive MICE experiences, boosting the popularity of boutique hotels, eco-lodges, and themed accommodations. Changes in lifestyle, increased tourism promotion, and improved transport facilities are all expected to fuel further growth.

The meetings segment dominates Africa’s MICE market, holding 60.4% of the market share, followed by conventions (19.5%) and incentives (12.7%). The incentives market, which is experiencing the highest growth rate at 17.2%, reflects the growing trend toward rewarding employees and clients through immersive travel experiences.

Additionally, sectors such as information technology and telecommunications (25.7%), agriculture and food (19.8%), and finance (18.5%) are key contributors to the MICE industry.

South Africa’s stronghold in the African MICE market is notable, with the country attracting 70.8% of its events from the international segment. Its leading sectors—information technology, agriculture, finance, and hospitality—ensure continued growth, even amid inflationary pressures. South Africa's MICE industry is set to benefit from the projected CAGR of 16-17% for both its international and domestic segments through 2032. By capitalising on the rise of experiential travel, industry diversification, and sectoral growth, Africa's MICE industry can overcome inflationary challenges and maintain its strong growth trajectory.

Source: Allied Market Research