Messe Frankfurt Spins Off Its Events
By Margo McCall -- Tradeshow Week, 10/4/2004
Marking an abrupt shift away from the traditional model for German trade fair organizers, Messe Frankfurt has spun off its events business into a separate entity.
The organizer's more than 100 events are now being overseen by Messe Frankfurt Exhibition, a wholly owned subsidiary. Its exhibition halls as of last year have been under ownership of Messe Frankfurt Venue.
Messe Frankfurt is the first German trade fair organizer to break from the typical model of having events and venues overseen by one government-supported entity. In contrast, venues and exhibitions in the United States are separately owned.
Separation of the two functions is intended to allow Messe Frankfurt to focus more closely on organizing events in a harsh operating environment. "Since the trade fair business becomes harder and harder, we at Messe Frankfurt decided to come up with a new group structure to be prepared for the future," spokeswoman Katharina Kadgien said.
While the separation is being viewed as a step toward privatization, the holding company that controls the separate subsidiaries will remain 60 percent owned by the city of Frankfurt and 40 percent by the state of Hesse.
Messe Frankfurt Exhibition will operate like a private trade fair organizer, becoming the main tenant of Messe Frankfurt Venue. More than a dozen separate Messe Frankfurt exhibition management subsidiaries around the world have been reorganized under the Messe Frankfurt Exhibition umbrella.
While the exhibition arm will focus on organizing events, the venue arm will concentrate on maintenance, development and marketing of the trade fair center.
Kadgien said the arrangement will open up more international partnership opportunities. "The new group structure not only enhances cost transparency but also — and above all — it boosts our flexibility," she said.
Messe Frankfurt's exhibition grounds feature 476,000 square meters (5.1 million square feet) of exhibit space, including 324,000 sq. m. (3.5 million sq. ft.) contained in 10 exhibition halls and 83,000 sq. m. (893,400 sq. ft.) of open-air space. In 2003, the company organized 110 trade fairs, including 60 held outside Germany.
Messe Frankfurt operates dozens of brands, including Ambiente, Automechanika, Beautyworld, Intertextile, Paperworld and Prolight + Sound.
Other signs that German trade fair organizers are facing challenging times include Messe Muenchen's closure of its U.S. office and Deutsche Messe's cancellation of its 2-year-old CeBIT America.
