Messe Muenchen Closes U.S. Office

German organizer says change in strategy, U.S. economy behind move

By Margo McCall -- Tradeshow Week, 8/9/2004

Messe Duesseldorf has a North American office. And so do trade fair organizers from the German cities of Cologne, Frankfurt and Hannover.

But as of the end of last month, Messe Muenchen has closed down its Munich Trade Fairs North America subsidiary. The responsibility for drawing exhibitors and attendees from this continent to Munich tradeshows has been turned over to the German American Chamber of Commerce in New York.

Messe Muenchen Intl. CEO Manfred Wutzhofer and managing director Eugen Egetenmeir advised in a July 19 memo that the subsidiary was closing "due to a strategic reorientation, along with the current economic situation in the United States."

Egetenmeir said the closure doesn't mean that the company is pulling out of the market. Rather, he said, turning over representation duties to the chamber — which has subsidiaries in Philadelphia and San Francisco, and partner chambers in Chicago, Atlanta and Washington, D.C. — will make sales and marketing activities even more efficient.

"The U.S. market continues for Messe Muenchen Intl. to be an important target market," he said. "Expenses which are saved will be increasingly available for marketing measures."

Frank Thorwirth, president of Messe Duesseldorf North America, said he was surprised to hear that Messe Muenchen was closing its subsidiary. "You have to be represented in one of the biggest markets of the world," he said.

Michael Libow, a former Exhibitgroup/Giltspur director of international sales and marketing who established the subsidiary in 1999, echoed that assessment. "Munich is one of the top trade fair organizers in the world. If you look at some of its competitors, like Hannover, Frankfurt and Duesseldorf, all three of them have very successful subsidiaries in the U.S.," he said. "They've had an excellent track record both in terms of financial results as well as delivering strong exhibitor and visitor growth from the exceptionally important U.S. market."

The closure resulted in the elimination of seven jobs, including that of Noelle Hoekstra, who left the Chicago operations of Messe Duesseldorf three years ago to head the Munich trade fair group's Chicago operations. The memo goes on to thank Hoekstra and her team for their efforts and "wish them the very best for the future."

The office closed just weeks before one of Munich's biggest shows — INTERMOT, a biennial motorcycle show scheduled for the New Munich Trade Fair Centre Sept. 15–19. "Maybe that's why they weren't returning my calls," pondered Nelson Yee, a designer for INTERMOT exhibitor Dynojet.

Yee, who was unaware of the closure, said he'd previously used the office to arrange for a stand at INTERMOT. When no one there called him back this time around, Yee said he went elsewhere. He added that his company would be unaffected by the closure, since it normally deals directly with the show organizer. "It's a really big show. We just re-up every year," he said.

Messe Muenchen — whose other subsidiaries are in Vienna, Singapore, Shanghai and Beijing — produces and hosts 40 events per year, as well as operates the New Munich Trade Fair Centre and a smaller exhibit space called M,O,C. It is also among the German trade fair organizers who are partners in the Shanghai New Intl. Expo Centre.

With 75 foreign representatives covering 89 countries, the organization declares on its Web site that it "has a truly global network" and a corporate strategy "to offer its customers top-quality marketing support and services also in important overseas markets."

Besides the messe in Germany's third-largest city, the New York office of the chamber represents trade fair companies in the smaller cities of Stuttgart and Leipzig.

Jerry Kallman, director of Kallman Global Consulting, said Messe Muenchen hasn't been represented by the chamber since 1963. Kallman said his firm handled the messe's international representation from that time until the Munich organizer established its subsidiary in 1999. "They may have had expectations that weren't realistic," he said. "There are cultural differences to be overcome."

Messe Frankfurt operates 15 international subsidiaries, including its Virginia-based North American office. It also employs 100 representatives to draw international attendees and exhibitors to the 100 annual shows it produces or hosts.

Messe Cologne operates a North American subsidiary called Koelnmesse, headquartered in Chicago. Among Deutsche Messe's eight subsidiaries is Hannover Fairs USA, based in Princeton, N.J.

Messe Duesseldorf, meanwhile, employs 60 foreign representatives and operates five subsidiaries. It has been operating in the United States since 1979, officially as a subsidiary since 1998, and offers everything from stands, accommodations and exhibit space to assistance with travel arrangements and translation.

"They appreciate that we're in the same time zone and see to all their needs and problems," said Thorwirth.

The "current economic situation in the United States" doesn't appear to be a problem for his company. "Business is great, especially this year when we'll have the most successful year in the history of Messe Duesseldorf," he said.