What Does the Future Hold?

Michael Hughes -- Tradeshow Week, 9/20/2004

It's been said that to predict the future is to play a fool's game. Yet thinking long-term is essential for business people in rapidly changing industries. Recently, Tradeshow Week research looked out a little further than the usual two to three years and came up with some industry trends that may become more prominent over the next 10 to 15 years.

It's likely that a decade from now there will be fewer for-profit show producers. At the very least, the largest firms probably will have closer to 150 to 200 shows in North America, compared to today, when they have portfolios of 50 to 100 events.

Because show producers have done such a good job of covering the global economy with exhibitions and conferences, it's very hard to launch enough new shows to impact revenues significantly. Instead, companies will pursue mergers more aggressively as a way to grow. Also, many of today's independent show producers are family-owned businesses, and not all of them will be passed along to heirs.

Shows are getting shorter. Years ago, the average number of show days was closer to three than the current 2.4. Furthermore, the increasingly rapid pace of business will keep many attendees from staying for the duration of an event.

Eventually, technology using pre-show, on-site and post-show matching services will need to become commonplace at important events. Right now, many valuable opportunities at exhibitions and meetings are never fulfilled because of the randomness of the experience, especially from the attendee perspective. Matching attendees with similar business interests may become as valuable as matching attendees to exhibitors.

Also, expect more services from show producers. Already, the savviest producers speak about providing value beyond the showfloor. Shows could provide more information-based services by analyzing the actions and opinions of their buyer and seller communities.

As event marketing programs become more complex, corporate marketers will need more help. A decade from now, exhibit space sales may account for 50 percent of total gross revenues, rather than the more than 70 percent they typically account for today.

A few years ago, a key trend in the sports venue industry was to build places that were reminiscent of an early age — like Jacobs Field in Cleveland. Nostalgia was hot, and probably still is in many parts of the economy and culture. But in terms of convention centers, hotels and big urban renewal projects, we will experience the Las Vegasing of America for many years to come. This means larger developments and bigger hotels that are part of "entertainment districts."

Los Angeles, for one, is planning this type of development, with a large hotel component downtown near the convention center. The saying used to be that, as California does, so does the rest of the country. In the future, the country, and especially downtown redevelopment projects with hotels and convention centers, will follow the lead of Las Vegas and the Gaylord hotels with "everything under one roof" — or at least in the same vicinity.

Expect to see more venue expansions focused on meeting and breakout rooms instead of large exhibit halls. A few high-profile venues that were only recently completed already lack enough meeting rooms. In the future, growing shows will increase their educational components and need more meeting space.

For many years, I believed the venue construction and expansion boom would eventually cool off. In fact, the reverse is true. It has slowed somewhat, but I finally realized that the convention center industry is simply in a state of constant development. Unlike the hotel industry, which is truly cyclical and tied to the private capital markets, most convention center developments are publicly financed and therefore immune to many economic conditions.

We've seen that the response to a weak economy is to build even more space. I think the building boom will continue for another 10 to 20 years.

Of all the industry segments, exhibitors may change the least over the next 15 years. This is partly because they've changed so much over the past 15 years. Today, exhibiting is more of a strategic marketing function than simply a medium to display products, as it once was. Exhibitors are getting smarter and using the event-marketing medium more effectively, but this has been a slow process and I don't see it changing too much more quickly over the next 10 years.

Also, marketers tend to go in two directions at once. On one hand, they migrate to value — wherever they get the best ROI. On the other hand, they follow marketing fads, simply doing what their competition is doing. The trouble is that the creative department is still in control at most marketing companies and, quite understandably, few marketers really know their true ROI from nearly any marketing medium.

I expect slow change in this area, as most people that go into marketing are more interested in the creative side than the financial. This doesn't mean that more exhibitors will not raise concerns about exhibition ROI in the future, but I don't think many will invest the time and resources needed to truly track ROI.

For years, power in the exhibition industry was in the hands of show management. Some industry veterans say they shared this power with contractors — or vice versa. More recently, there was talk about power shifting to exhibitors, but exhibitors haven't fully understood or embraced this — at least outside of the information technology industry.

Going forward, attendees will have more control, for three good reasons that have the potential to reshape the industry's future.

First, businesspeople will need more education in order to compensate for the poor state of the U.S. public education system, and to keep up in an even more competitive work environment. It's possible that adult learning businesses, including conferences and exhibitions, will have to pick up the slack even more over the next 20 years and beyond.

Second, the managerial and professional classes are becoming progressively more affluent. In general, conferences and exhibitions cater to the upper classes, those in professions that require them to fly more, stay in hotels, pay association dues, etc. What will it mean for exhibition managers and venue operators if this portion of the population becomes even more affluent? They will become more selective and picky as they have more options. They will want to feel special, maybe even pampered. Over the next 10 years, the industry will have to focus more on customer service. Of course, doing so on a mass level at the largest shows will not be easy.

Finally, demographic trends may impact tradeshow attendance as baby boomers retire over the next 10 to 20 years. If you are a show producer or a convention center manager or CVB marketer, now is a good time to start looking at the age makeup of your attendee base and how it may change over the next two decades.