Tradeshow Growth Rate Continues in 2nd Quarter

April showers bring May flowers ¡ª and second-quarter tradeshows were certainly blooming.

Shows held in April, May and June experienced increases in every index tracked by Tradeshow Week, and growth in attendance kept pace with year-ago increases. Meanwhile, the growth rate for net square footage increased slightly and the growth rate for number of exhibitors slowed down.

According to the Quarterly Report of Tradeshow Statistics, on average, second-quarter shows saw a 3.9-percent rise in net square footage, 2.9-percent increase in exhibiting companies and 6.7-percent increase in attendance, when compared with shows held during the same time period in 2004.

Second-quarter shows last year improved 2.7 percent in net square footage, 5 percent in exhibiting companies and 6.4 percent in attendance over the same quarter of 2003.

However, there were a few factors that help explain exhibiting companies' slowing growth rate.

For the last two years, health care and medical shows have consistently boasted significant across-the-board improvement; however, it was not the case this time around. Medical shows held in the second quarter of 2005 did not fare as well as their non-medical counterparts, nor did they do as well as medical shows held in the second quarter of 2004.

Last year, net square footage at second-quarter medical shows grew 7.7 percent, number of exhibiting companies 7.8 percent and attendance 6 percent over the year-earlier quarter. In this year's second quarter, net square footage of medical shows was up 1.7 percent, while attendance remained stable at best, and the number of exhibiting companies was down 0.9 percent.

Eric Allen, vice president of the Healthcare Convention & Exhibitors Assn., said the health care industry's economic turnaround was at least a quarter or two ahead of the rest of the economy.

"Medical shows did their recovering faster and earlier after Sept. 11 than others, and are plateauing sooner," Allen said.

Allen attributes the segment's survival to continuing medical education, courses that health care professionals often seek out at tradeshows and meetings.

"It's a built-in incentive for doctors to keep going to meetings," Allen said. "Doctors have to receive a certain number of CME credits each year to remain certified. Health care conventions are one of the best education opportunities for physicians."

On the other hand, working against medical shows is the greater scrutiny health care companies undergo in terms of how they market their products. In 2002, the Pharmaceutical Research and Manufacturers of America adopted the PhRMA Code, designed to govern the interaction between pharmaceutical and medical device companies, and the health care professionals who typically buy their products and services.

This could have an impact on the number and type of social functions at medical tradeshows and conventions. For example, companies may think it unwise to be the sole sponsor of a reception, Allen said.

But, he added, "Health care conventions still work for what they're intended to do, exchange scientific information."

For a wide variety of shows, Las Vegas continues to be the destination of choice. The Quarterly Report indicates that second-quarter shows there improved 10.4 percent in net square footage, 10 percent in exhibiting companies and 15.2 percent in attendance. Meanwhile, shows held in all other U.S. cities on average saw a 1.3-percent rise in net square footage, 4.5-percent increase in attendance and a 0.7-percent increase in number of exhibiting companies.

However, even in the case of Las Vegas, when May's NATL. HARDWARE SHOW and Lawn & Garden World is removed from the equation, growth for tradeshows held in that city ¡ª albeit better than the rest of the United States ¡ª is not as dramatic.

According to owner and organizer Reed Exhibitions, the hardware show grew from 489,023 net sq. ft. in 2004 to 681,891 net sq. ft. this year, an increase of 39.4 percent. The number of exhibiting companies rose 35.6 percent and attendance was up 52.6 percent.

Without the hardware show, the net square footage of all other shows held in Las Vegas would have been up 7.1 percent, number of exhibiting companies up 5 percent and attendance 11.7 percent.

In 2004, the Las Vegas hardware show had competition from the AHMA Hardware Show. After a difficult and complicated rivalry with Reed Exhibitions, the American Hardware Manufacturers' Assn. canceled plans for its 2005 Chicago show, leaving Natl. Hardware Show as the only large horizontal hardware show in the United States.

Woody Collins, tradeshow manager for Briggs and Stratton, said his company had exhibited at the Chicago show in previous years and at the Las Vegas show this year. While his personal preference was Chicago, he said, money talked ¡ª and made exhibiting at the Natl. Hardware Show in Las Vegas an easy choice to make.

"The main difference was cost," Collins said.

Briggs and Stratton, which produces air-cooled engines for outdoor power equipment, had a 30¡ä¡Á30¡ä booth in Chicago. The drayage bill was $16,000, Collins said. In Las Vegas, drayage was included with the cost of the booth, and his company saved $20,000.

"You can't even stick anything in an electrical socket (in Chicago)," Collins said.

However, Collins may be surprised the next time around in the Windy City. The Metropolitan Pier and Exposition Authority (operator of Chicago's McCormick Place and Navy Pier) and Chicago labor representatives in May unveiled several specific labor regulation modifications. The cost-saving measures include adjustments to overtime hours, exhibitor rights and crew sizes; as well as a formalized audit process to review bills submitted by service contractors to show organizers.

Nevertheless, cheap labor isn't the only thing Las Vegas has to offer.

"I think it's pretty obvious why Las Vegas and Orlando are the No. 1 and 2 cities for tradeshows," said Jason McGraw, senior vice president of expositions for Intl. Communications Industries Assn., which manages InfoComm Intl. "They have the whole package." McGraw was referring to a wide variety of properties at different price points, a large qualified labor pool and international air connections.

"It has world-class shows, entertainment, restaurants, resorts, spas and themed hotels," he added. "There's no copy of it."