Tradeshows No Longer Feeling Pain

Only two years into the economic upswing and shows are rebounding

Heidi Genoist -- Tradeshow Week, 4/11/2005

A year ago, Tradeshow Week asked, "Is the recovery for real?" The economists, investors, media company executives and show organizers we went to for the answer gave a mixed "Yes."

It's a year later and, once again, for the issue that coincides with the Society of Independent Show Organizers' CEO Summit, we surveyed the economic landscape that serves as backdrop for all the deals being discussed at Lake Las Vegas this week.

This time we asked: If the recovery's for real, what comes next?

What we found indicates that the tables have turned. While economists' enthusiasm is waning, those in the business of producing tradeshows are greeting 2005 with renewed energy.

Jack Kyser, chief economist of the Los Angeles Economic Development Corp., said his office's prediction of 4-percent growth in 2004 turned out to be accurate, with the U.S. Department of Commerce's Bureau of Economic Analysis reporting an increase in real gross domestic product of 4.4 percent from 2003 to 2004.

However, Kyser added, the LAEDC forecasts a slowdown in growth for 2005.

"We're predicting 3.6-percent growth (in GDP) but faster non-farm employment growth, reflecting a weakening in productivity combined with businesses ramping up due to new orders coming in," he said.

Tradeshow Week research reflects similar trends. According to TSW's reports of tradeshow statistics, attendance rose 2.7 percent from 2003 to 2004, compared to 3.6 percent from 2002 to 2003. Net square feet of paid exhibit space increased 1.5 percent in 2004, recovering from a 0.4-percent decrease in 2003.

Michael Hughes, associate publisher and research director for TSW, noted that attendance growth is tied to immediate economic reality, while exhibitor commitments reflect the economy six to 12 months in the past.

"Exhibition industry growth is not spectacular, but it has been steadily improving. These are the good times," Hughes said.

In terms of the overall economic picture, Kyser said, tradeshows are in a "sweet spot," with corporate profits improving, companies investing and the vitality of low-cost airlines bolstering domestic travel.

"As business becomes more confident about the economy, attendance at tradeshows and conventions will pick up," he noted.

This confidence is apparent in the sectors we examined for this issue. Senior Assistant Editor Rachelle Crum looked at the exhibition-industry job market and found more opportunity reported on both sides of the hiring desk. Associate Editor Margo McCall reviewed business activity and found an increase in show launches and the availability of organizing companies for acquisition. Even the exhibit design and build sector is finally picking up, after a tough 2003–2004.

But as organizers reported to Contributing Editor Gary Tufel, everyone's learned the moderation lesson, and that they have to work harder and more efficiently than ever.

Kyser warned that, despite an overall positive outlook for 2005, some segments of the economy — for instance, resale housing and new-home building — might begin to see some slowing in growth toward the end of the year. Domestic (including drive-in) travel — so important to the tradeshow business — might also see some fall-off.

"The rebound in the early to mid-1990s was led by exhibitors," said Hughes. "Going forward, it will have to be led by continuing attendance growth. The good news is that this seems to be happening."