With economists mooting a second recession this year, UFI’s 8th Global Exhibition Barometer survey indicates the UK and Europe are looking at emigration and non-core activities to grow their portfolios.
In June 2011, global exhibition organiser association UFI asked its membership when they expected the end of the current economic crisis. Optimistically perhaps, 63 per cent suggested 2012, with 15 per cent claiming 2013 and nine per cent opting for 2014.
Fast forward to December 2011 and estimates become more realistic, with 46 per cent now looking at 2013, 14 per cent 2014 and eight per cent 2015.
You can, with reasonable certainty, place most of the respondents suggesting 2014 and 2015 in Europe and to a lesser extent North America. The economic climate in these two regions is bleaker and the yield on investment in a mature marketplace tends to be lower than that in the emerging markets, while taking longer to realise.
But while the findings in UFI’s 8th Global Exhibition Barometer Survey, a report compiled at the end of last year to assess the impact of the economic downturn, paint a bleak picture, expectations that the lean months will continue into 2013 brings with it a set of new goals for organisers. They will have to adapt their priorities if they are to remain profitable, and in the case of the UK and Europe, this development means moving into new territories and enriching their shows.
The Asia-Pacific region’s appeal for organisers in Europe and the US means the need to diversify and expand their offerings is lessened. They can exist perfectly well on their core business, continuing to trade on new and increasingly modern venues, low service costs and access to a high population of potential visitors and exhibitors.
The story for europe
In Europe, we are having to work harder to ensure our businesses remain profitable. According to UFI’s survey, 54 per cent of companies claim their priorities are switching to developing new activities in terms of live events or virtual events.
This compares with just 37 per cent in Asia-Pacific and 42 per cent in the Middle East and Africa. Put simply, organisers in these regions are doing perfectly well using the traditional exhibition model.
UFI claims the most striking conclusion from the survey is that the positive growth recorded in 2010 and 2011 is now perceived as “deteriorating”. But there is an upside to be found among all this decline.
Paul Woodward, UFI MD, said the resilience of the exhibition industry will be key to enduring the economic slump. “In trying times our face-to-face media identifies new marketing opportunities to provide to our exhibitors and exhibition visitors. We may even, in 10 years’ time, look back on this era as one of positive developments,” he said.
But what form would these developments take? UK companies would do well to keep their eyes open for partners from the US. The Americas now lead the way in wanting to take their shows into new countries with 58 per cent of respondents claiming it’s a priority for them to expand their geographical exposure. By contrast 47 per cent of UK and European organisers plan to move into new countries as a matter of urgency, while the figure for Asia drops to 45 per cent.
Causes for concern
The four most important issues for businesses in the next year were shared by 80 per cent of respondents. The top two reflect more than ever the concerns with political and economic stability in regions such as the Middle East and Asia, key targets for organisers looking to grow their event portfolios.
- State of the national/regional economy (23%)
- Global economic uncertainty (21%, a 3% increase in the last six months;
- Local/national competition from the exhibition industry (19%);
- Internal management challenges (18%); environmental challenges (customer expectations, regulations) and other media issues.
Competition from other media, excluding the Internet, virtual trade shows, social media and integration with other media are currently considered less critical.
So it appears that while Asia-Pacific and the Americas showed a return of growth in gross turnover for seven to eight companies out of 10 in both 2010 and 2011, this level of performance appears to drop slightly for 2012. Less than seven out of 10 declared an increase in the Americas and fewer than eight in the Asia-Pacific region.
Here in Europe, the return of growth for a majority of companies, which only appeared in 2011, now seems fragile. Only half of survey respondents declared a turnover increase for the second half of 2010.
Anticipated ending year of the impact of the economic crisis for those who believe it is not yet over:
Percentage of companies declaring an increase in their turnover year-on-year, regardless of the possible biennial effect:
This feature was fist published in EN in March 2012.
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