Asian Facility Building Boom

By Vanessa VanderZanden -- Tradeshow Week, 4/12/2004

There's a building boom underway from Saigon to Hong Kong as the Asian tradeshow industry heats up. Eager to lure foreign investors to the products and services they offer at discount prices, Asian tradeshow producers have been adhering to the notion that if you build it they will come. And any discussion of exhibition hall expansions and new facilities has to begin with China.

"China has developed more exhibition space in the past five years than the rest of Asia added together," said Paul Woodward, principal of consulting firm Business Strategies Group and manager of the UFI Asia Pacific office. "Within the next two years, it will overtake Germany in terms of the amount of available space in its 61-plus major centers."

Peter Sutton, president and chief executive of CMP Asia, admitted, "So many new venues are being built that it is hard to envisage all of them being fully used. But the potential of China may result in good venue occupancy in the years ahead."

It's not just that facilities in China are being built for what is traditionally perceived as the primary, secondary and tertiary markets, explained Cliff Wallace, managing director of the Hong Kong Convention & Exhibition Centre, it's that the tertiary facilities are larger than most typically produced for that market. New shows are abounding in China, more so than in any other Asian country, with foreign business people finding the Chinese ready to buy. "It's a prime, fertile market," Wallace said.

Yet he remains skeptical that the explosion of new convention center construction is entirely justified. It's not the buildings in popular destinations like Beijing and Shanghai that he's worried about, as they already draw large international crowds and are bustling centers of industry. It's the new centers being packed into regions like Guandong Province in southern China. "It's where you'll see buildings suffer the most," he said.

Wallace pointed out of some locations, "They don't even have airports nearby and what they claim are five-star hotels, in some areas, are more like four star." He wondered whether the new facilities will be able to draw the large crowds necessary to maintain profitability. "We as an industry should have learned in the United States in the '70s that the market has to be rooted before you begin building."

Currently, the Hong Kong Convention & Exhibition Centre is teeming with Mainland Chinese scouts seeking construction ideas. They are asking for the names and numbers of show organizers, in an attempt to get these people to draw crowds to the facilities before they complete construction.

Still, Wallace believes the market has not been researched enough. "It's destined for challenges at best, and problems at worst," he said.

Throughout the rest of Asia, new buildings in development stages include one in Seoul, South Korea, still in its initial phases, and the Intl. Business Centre in Incheon, South Korea, expected to reach completion in 2013. Also, there is talk of a 1,250-acre resort and residential compound with convention facilities being built at Sentosa Cove in Singapore. Bangkok has also expanded its trade fair capacity. Its IMPACT facility is being expanded from roughly 807,293 sq. ft. to 968,752 sq. ft. Hong Kong itself is constructing a new facility near the airport, called AsiaWorld-Expo, and the Kuala Lumpur Convention Centre will be more than 353,142 sq. ft. when it's completed in 2005.

"Asia has been transformed in the past five years from being relatively short of world-class exhibition space to something of a surplus," Woodward explained. "It is a buyers' market for exhibition organizers."