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Will virus change global exhibitions industry?

The worldwide exhibitions industry is in crisis. The effects of the global Coronavirus outbreak began with the cancellation of the Mobile World Congress, in Barcelona last month. Last week, the 90th annual Geneva Motor Show was cancelled, just three days ahead of opening, due to Switzerland’s banning of all events with more than 1,000 people.

This week, Reed Exhibitions cancelled its London Book Fair. It also cancelled MipTV and rescheduled its MIPIM property show to June, in Cannes. Next week’s HIMSS Global Health Conference & Exhibition, in Florida ($46m revenue, 44k attendees and 1,400 exhibitors expected), has also been cancelled.

ITB has cancelled the world’s largest travel trade exhibition , due for Berlin next week (160k visitors had been expected), and also a version in India. Interestingly, the German government is reimbursing ITB (in which it has a 40% shareholding) for any losses incurred. Reed, which operates travel trade shows worldwide including the industry’s second largest event in London in November, is expected to cancel its Arabian travel show in April.

Exhibitions are being cancelled across Asia (the fastest growing market for trade shows, which has 24% of global capacity) but also, increasingly in Europe and the US. Three of the world’s six largest exhibition venues are in China. The listed UK company Hyve (formerly ITE Group) estimated it would lose ¬£16-18m of its 2020 profit, through deferred and cancelled shows. Most exhibition companies are not insured for the loss of these shows.

In Madrid and Paris, governments have told organisers to stop events until later in the year. While many have succeeded in re-scheduling shows, venue availability will inevitably be much tighter the longer the crisis continues. Insiders estimate that the UK-based global exhibition organisers may, almost inevitably, lose some 10-15% of all revenues.

Industry executives are beginning to speculate whether this disruption might permanently damage some of the larger shows. Exhibitor companies which have themselves lost sales because of the virus might “benefit”, in the short-term, from the “saved” budgets of cancelled events. Might some of those companies never return or, at least, permanently reduce their expenditure, especially at the largest, most expensive exhibitions? At the very least, the interruption to a long series of otherwise successful “must attend” events might cause exhibitors to review their options.

Any event where exhibitors are dissatisfied (it happens), either with the competitive “imperative” to attend or with the trends in exhibitor costs or attendance, might be susceptible to permanent disruption. Smaller, alternative events can, of course, be quicker to organise than those occupying the largest venues.

The other risk is that organisers, determined to maintain their exhibitions, may succeed only in staging depleted events that ultimately discourage visitors and exhibitors from returning – even after the crisis has ended.

What is inevitable is that, unless the Coronavirus outbreak ends relatively soon, exhibition profits will be substantially reduced, valuations will fall, and companies and events will be damaged. Many of the world’s leading exhibition organisers are owned by cash-rich private equity firms which might be expected to swoop on independent companies once the crisis has ended. But nobody is thinking quite that far ahead as the exhibitions industry faces up to its own recession.