Research Points to Cautious Optimism for Exhibitions
By Association Adviser staff
With 2008 and 2009 in the rear view mirror, early indicators signal better times ahead for savvy association event planners, but it won't be easy.
With most forecasters in agreement that the economy is in “slow recovery” mode, credit is easing, businesses are finally showing signs of hiring and both corporate and government decision-makers are gradually moving off the fence. So what's the consensus forecast for 2010 conferences and events? All signs point to a slow recovery, but it's still a recovery and a vast improvement over the “duck and cover” mindset we've seen over the past two years.
For instance, nearly three fourths (72 percent) of the professional event planners surveyed by the Global Association of the Exhibition Industry (GAEI) expect a trade show industry recovery in the next 12 months, with 55 percent anticipating a recovery as early as the second half of 2010 and 27 percent are projecting a recovery by the first half of 2011.
“If we learned anything over the past couple of years, it's that a good economy hides lots of mistakes,” said Charles Popper, Naylor's vice president of association relations. “This is when leaders set themselves apart from imposters, and when your ability to demonstrate ROI is more important than ever.” (See Charles' related story in today's issue.)
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According to the recently released Professional Convention and Management Association (PCMA) annual study, 30 percent of an organization's revenue comes from dues, even more (33 percent) comes from conventions, meetings and exhibits, 15 percent is derived from publications advertising and 22 percent from sales and other sources. So the pressure on association event planning teams to deliver in 2010 is intense, to say the least.
PCMA member event planners, nearly 60 percent of whom work for associations, are looking to a number of factors to assess return on investment (ROI) and return on experience (ROE) including:
- Budget, historical data, savings over spending.
- Attendance increase/decrease from previous years, membership increase/decrease and membership involvement/activity.
- Positive survey results from attendees and exhibitors.
- Financial success, level of attendance and board reaction.
- Quantifed and met goals – financial or other.
- Perceived value for attendees. Having immediate take-aways to implement in the office and making valuable connections that extend their networking and mentoring throughout the year.
- Repeat attendance.
- Ability to move the business forward, exceeded meeting objectives (training,retention, motivation, etc).
“These days it's all about quality not quantity,” noted Camille Stern, Naylor CMG's Vice President of Operations. “For instance, on the show floor, it's not how many hours you can make the exhibit hall open to vendors; it's about how many quality hours you can build into the schedule so that the exhibit hall is not competing with important education sessions or show-related social events. It's also not about how many attendees you're bringing into the show; it's about the quality of attendees – i.e. how many high-level decision makers are coming to the show and walking the floor?”
Recent data from The Center for Exhibition Industry Research (CEIR) showed that the exhibition industry in Q1 of 2010 experienced an overall decline of four percent compared to the first quarter of 2009. However, the most recent decline is much smaller than the 11.6 percent drop off that occurred between the first quarter 2008 and the first quarter of 2009. The CEIR Index – which tracks 11 key industries including manufacturing, construction, healthcare and government – reported that one of the leading indicators to look for in a recovery of the exhibition industry is professional attendees. First quarter data indicates almost no change from a comparable period a year ago (minus 0.2 percent), which is much less than the 1.5 percent decrease over the same period last year, as well as the year-end overall decrease of 4.1 percent.
CEIR reported that parallel lagging indicators of recovery of net square feet and revenue are still showing a decline, however. Although net square feet of exhibit space sold showed a decline of 6.2 percent, the decline is slowing from the 14.8 decline at the same time in 2009. Revenue declined 8.4 percent, compared to a 19.7 decline in 2009 first quarter results. But sales teams are generally holding their ground when it comes to negotiating.
According to the International Association of Exhibitions and Events (IAEE) April 2010 survey of 158 professional event planners, exhibit space sales staffs are generally holding their ground when it comes to negotiating fees for exhibit space and pricing is not the only consideration that comes into play – an encouraging sign for event planners:
Baby steps throughout 2010 with an upward swing in the beginning of 2011
The following graph gives insight into projected trends for trade show budgets:
And attendance:
To put the 19 percent figure in perspective, a year ago, nearly one in three (31 percent) PCMA members expected attendance to decline.
When it came to their 2010 exhibitor projections, nearly half (47 percent versus 45 percent the year before) expected to attract over 100 exhibitors to their largest show:
In terms of exhibitor square footage of their largest events: PCMA respondents reported that, on average, they expected approximately 105,000 net square feet, up more than 15 percent from 90,800 net square feet averaged last year.
Projected frequency, size and duration of meetings:
Among the smaller meetings they planned to hold, 15 percent expected to hold fewer in 2010 than in 2009; seven percent expect an increase and more than two-thirds (68 percent) expected no change. On average, respondents reported that their small meetings remain fairly evenly divided between seminars (22 percent), committee meetings (24 percent), and board meetings (24 percent), followed by training sessions (19 percent) and other types of meetings (11 percent).
In what may come as a surprise to many, nearly four out of five surveyed meeting planners (78 percent) told PCMA that they did not have plans to cut back on the number of days of any multiday meeting in 2010. Eighteen percent expected to cut the meeting by one day, and three percent by more than one day. Also encouraging: Fewer than one-fifth (17 percent) of surveyed meeting planners expected to cancel one or more meetings in 2010 — down slightly from the 21 percent in 2008 who anticipated canceling meetings in 2009.
Respondents said that they've been asked to cut a variety of expenses for their 2010 meetings, the most frequent ones being food-and-beverage (45 percent), rooms/housing (29 percent), and/or audiovisual (27 percent). Also likely to be cut were amenities such as shuttle service (17 percent), speakers/programming (16 percent), and meeting rooms (11 percent).
If nothing else, the latest data makes it clear that for association event teams to be successful in 2010 and beyond, they cannot take any member's or exhibitor's attendance for granted at their flagship annual events. They must put the pain of the past two years behind them and continually create buzz on the show floor, come up with innovative and highly relevant educational events and reinforce the attendee's ROE.
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