Do Exhibitors Feel the Space-Rate Pinch?

In Tradeshow Week's most recent Annual Survey of Exposition Managers, a majority of responding show managers said they raised their space rates this year. The average space rate they reported was $37.70 per square foot, an increase over figures reported in last year's survey.

What do exhibitors have to say about the situation? Have they experienced the same increases in tradeshow space rates? If so, how have they dealt with them?

"We have seen an increase in costs from almost all areas in tradeshow marketing. And with more and more shows to attend, we cannot increase space. In some cases, we have had to decrease it. In some cases it has forced us not to attend and try other marketing opportunities instead.

"If rates continue to climb, trade associations will see less support. For big companies, it means cutting back, but for smaller companies it could mean not participating. And in a market like health care, where there is so much innovation, not exhibiting will be a negative to the very audience they are supporting — the attendee. Tradeshows are primarily an educational experience for the attendee, and that takes their opportunity away."

Laura J. Costello, Senior director, global event management, Philips Medical Systems

"My booth prices from 2003 to 2004 have only gone up 1 to 3 percent on average, comparing the same shows from year to year. What is changing is the amount of overtime. The amount of time that show management books the convention center is shorter, and makes us spend more on drayage and labor overtime to set up and dismantle. And some shows are trying to force us to use their material-handling companies as our freight handlers.

"In one case, we had the choice of the show contractor taking the freight back to its warehouse and having our carriers make an appointment to pick it up, or letting the show contractor handle the shipping. Since I value my exhibit, I will pay the warehouse fee and use a van line."

Lynne Parry, Tradeshow manager, Apple Rubber Products

"We are very unhappy with the rising cost of exhibit space at our tradeshows based on losses by the organizers, and are looking at reducing our space to compensate. Our exhibit budget is not increasing at the rate the exhibit space is. We normally increase our budget around 2 to 3 percent each year to meet rising costs. This doesn't come close to the increase in exhibit space costs.

"We've even elected to not attend some of our smaller local meetings due to these increased costs. We have a set budget and we can only attend until the money runs out. Alcon is one of the major pharmaceutical companies in the industry, but we're not in a position to offset rising costs for organizers."

Trudy J. Bonifas, Exhibits manager, Alcon Laboratories

"Not many shows are holding the line on space rates, and those that are, aren't good shows. If a show raises its rates without offering a quality product to its exhibitors, that's gouging. Shows that are doing well naturally will raise their rates because they're offering a good product, and exhibitors are willing to pay for a good show.

"They want to participate in a successful show where they get a good return for a fair price. Shows should benefit everyone: exhibitors, attendees, CVBs, show management, etc., and when they do, they're entitled to charge more for as long as they deliver a quality product."

Bob Thomas, President, Exhibit and Event Management

"Our mix of events has changed dramatically over the past few years, which probably parallels many other exhibitors. We are actually participating in more events than in the late '90s, but very few are the larger for-profit horizontal shows which I have associated with the greatest space cost.

"Our program is currently much more focused on targeted events in vertical markets, most of which are sponsored by industry associations.

"At many events, however, we have experienced a significant increase in the application of sponsorship opportunities: two- or three-tier sponsorships, typically accompanied by marketing enhancements such as logo placement, speaker opportunities and full conference registrations. These involve significant additional financial commitment, frequently exceeding the cost of floor space, with seemingly little incremental cost to the show organizer.

"We often feel compelled to participate in order to be seen as a major player, and many other exhibitors are driven by the same pressure. "

Thomas Grossman, Director, exhibits and promotional events, UNISYS