Media Fortune Fame & Folly

Trade shows look East for signs of recovery

The exhibitions industry is looking to China for the signs of when/how events will bounce back to their peak 2019 levels. Of the country’s 20 largest trade shows (by net exhibition space in 2019), four have so far taken place in 2020, 11 are scheduled, 4 have been postponed/ cancelled and one is not due until next year, according to AMR’s Globex. So, the good news is that China (which represents 11% of the world trade show market by value and 16.5% by exhibition space) is back on stream, even though the largest event – the twice-yearly China Import & Export Fair – has taken place only as a virtual event so far this year.

Of the UK-based listed companies whose investors are hanging on for news of recovery, Reed’s Health Industry Show – China’s fifth largest exhibition – took place with 200k sq m and 230k visitors. Informa’s Children, Baby, Maternity Expo is scheduled for July but its Hospitality, food & beverage show has been postponed. The Tarsus Group’s largest China show, Hometex, claimed visitors at 2019 levels for its resumption last week.

But, according to Events Intelligence, exhibitions activity in Hong Kong has been significantly worse than in mainland China (c50% down in volume). This may be due to cancellation and consolidation but also to the migration of events across the border, including to the major new Shenzhen World Convention Centre, 75km from Hong Kong airport. The politics must also have had an impact.

AMR predicts that the number of exhibitions across Asia (18% of the world market by value) in 2021 will be 57% of what it was in 2019. While this may be no guide to revenues, exhibitor numbers at Asian events in January-February this year were 52% of those for the same events in 2019. The number of visitors was 64% of 2019.

For the exhibitions industry as a whole, AMR estimates that the number of events in Jan-June 2021 will be some 43% of 2019. This is mostly driven by Asia (53%). EMEA is estimated at 39% and the Americas at 26%.

The trade association UFI says that more than half of exhibition companies were inactive during April-August last year but that most had some activity from September. Some 37% of companies had been expecting a “normal” level of business from June 2021. Some hope.

With exhibitions still being shifted and some re-scheduled events likely to be deferred again if exhibitor bookings disappoint, China might not be much of a guide to global trade show recovery. And the clock is ticking.

Whether they are exhibition companies like the world leader Informa Plc (which rushed to issue shares and refinance debt almost before the pandemic had taken hold), or Reed Exhibitions (for which the losses can be sustained by its RELX parent), or private equity funds that have been blown off course, the waiting time always has limits.

Continued slippage of schedules will have severe repercussions for trade show companies which – even as events resume – must contend with the cost pressures of digital-data innovation and the revenue-risk of international travel restrictions. That’s even before you factor in the recessionary conditions whose impact is currently masked almost everywhere by medical emergency and state funding: many exhibitors may need to defer the resumption of major expenditure.

The upshot is likely to be a substantial shift in strategy, including:

  • Reduction of trade show portfolios, especially the merger of related exhibitions into unified ‘super events’, spiced by the virtual learnings of 2020. They will be an opportunity for the relaunch and revitalisation of major brands
  • Many more events deferred to 2022 or even 2023

This consolidation might be the trigger for major organisers to swap or merge events. Times demand a reversal of the trend for companies to operate adjacent events in key markets – at least partly as a defensive strategy. The long tail of under-profitable events will, inevitably, have grown during the pandemic. It seems possible that the world’s three largest organisers – which have together been operating some 1,300 events – might cut 25-30% of their trade shows.

For some, it will be mere airbrushing from the corporate brochure; for others it will be job losses, cancellation costs, or deals with rivals.

It has become increasingly difficult to believe that the exhibition paralysis of 2020-21 could be eclipsed by the simple bounce-back to 2019 that some have been predicting. But consolidation (and cost savings) might actually help profits to recover relatively quickly. For the fastest-movers, it will be the way that trade shows really can “build back better”. But it won’t be painless.

AMR International