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March 11, 2009
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John Pringle:Looking for value in a recession




Some of the more mature events in the industry will have been particularly nervous coming into the economic downturn, especially in the UK. The biggest shows were already struggling for growth before the current crisis. Stand sizes had been pushed, new sectors added and exhibitor numbers more or less maximised.

While the economy was growing, it was always possible to squeeze the price here and there, but even then, growth was not easy. Now these shows are bound to be hit. The exhibitor universe will be shrinking in many cases and marketing budgets will be coming under close scrutiny everywhere.

At the same time, in many show sectors, we have been witnessing a decline in visitor numbers for some time prior to the current crisis. Numbers have been hit by increasing time pressure on visitors, and sometimes just because of a lack of visitor enthusiasm for shows; with little attention given by organisers to visitor animation and little innovation in products or exhibitors on show.

It may seem obvious, but in the current economic climate visitors are going to be even harder to attract: they will be under even more pressure to justify time at a show; their buying will be down; and many of the unlucky ones will actually be out of a job.

The big squeeze
Facing this sort of a squeeze from both the visitor and exhibitor side, big, horizontal shows are open to attack. On the periphery they might be vulnerable to the internet, but every sector of a show could find itself increasingly susceptible to ‘own events’ and to niche launches – new organisers entering the sector with a recession-beating stand price.

But if the recession is a threat, it is also what one of my American colleagues would call a ‘problem-tunity’.

For many of the major domestic players such as Clarion and Emap, even before the downturn, the answer to a maturing domestic market has been to look at international opportunities – taking their own expertise abroad, partnering and acquiring. Some markets are not as hard hit as the UK by the recession, so the attraction of internationalising portfolios is likely to increase.

Meanwhile, trade shows have also been fighting the declining visitor number by looking at animating their shows - learning lessons from consumer shows about creating a buzz to stimulate visitors. The importance of visitor animation is only going to increase as the recession continues to bite.

Maybe this is also the time to look at new models of making the internet work to the benefit of exhibitions, enhancing the show and its brand. Few organisers appear to have cracked this issue, but perhaps now is the perfect opportunity to point resources towards exploring the possibilities further and have models in place for when budgets return.

Out to lunch
There may be acquisition opportunities thrown up by the crisis. Distressed assets, perhaps, but not just distressed assets. The years of economic growth pushed up sellers’ expectations and these remain pretty high and therefore out of line with what buyers are prepared to pay. But we believe that once the market has settled a bit later in the year, expectations will come back into line and acquisition activity will pick up. Now might be a good time to be taking potential vendors to lunch.

At home we know that marketing budgets will come back. Time now would be well spent building and consolidating relationships with exhibitors and visitors, understanding their needs show sector by show sector, maximising value and being seen to be maximising value to all participants. This will help assess where shows are vulnerable and what action is needed to keep customers loyal. Working together in this difficult environment will help ensure maximum value for all participants now and when things start to pick up. This is nothing new, but it is not always given the management attention it deserves.

In reality, the core issue for organisers is the same as ever, only more so. It is about getting as close as possible to the market and to customers. The industry has been spoilt for the last few years thanks to a boom time for exhibitions, now it’s time for a back to basics approach and creating something people actually want.

John Pringle is director of the exhibitions arm of industry analysts and M&A specialists AMR International.


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