Controlling Costs: Pros Make Any City Affordable

By Heidi Genoist -- Tradeshow Week, 9/5/2005

The conventional wisdom that smaller cities make more affordable tradeshow sites may or may not be true (as the readers' poll on p. 12 illustrates), yet organizers acknowledge that larger cities have higher fixed costs.

So, how do they rectify this discrepancy?

For most, it's a question of experience — adopting strategies to control costs in places attendees want and need to visit, no matter how expensive those cities are to begin with.

There's one thing everybody agrees on: Affordability is relative. It might be cheaper, in terms of exhibit hall rental and hotel room rates, to go to a small city, noted Susan Newman, vice president of conferences for the Natl. Retail Federation, but for her members, those savings would be canceled out by the inability to draw a qualified audience to an out-of-the-way locale.

Newman is a good example of a show manager whose hands are tied when it comes to location. NRF's Annual Convention & Expo, which in January spanned 116,800 net square feet and drew 8,300 professional attendees, takes place every year at the Jacob K. Javits Convention Center of New York.

There, Newman said, "labor is what it is. They can charge whatever they want, and you just have to pay it."

Through an agreement with local unions, the Javits sets its own rates for work done in the building, and they have a reputation for being high. According to Tradeshow Week's 2005 Survey of U.S. and Canadian Labor Rates, the average straight-time rate for a general labor decorator in New York City is $107.72, which is $39.03 above the national average.

So, in cases like New York, do organizers just accept that they'll have to shell out big bucks for labor?

Not exactly.

Noreen Burke of Corcoran Expositions said that good planning minimizes the financial damage.

"Affordable shows can be run in any city, depending on certain criteria," she noted. "One is the move-in and move-out of exhibitor freight on straight-time days and hours. If contractor installation and dismantle fall during overtime hours and weekend days, the decorator's cost to produce the show will increase."

Burke estimated that organizers can save as much as 30 percent by scheduling move-in and move-out during straight-time hours.

Returning to the example of New York, the city's average overtime rate for general decorator labor is $153.27; its Sunday rate is $203.58.

Some cities with a bad rap labor-wise are trying to do their part to control costs. Ian Fardy said he's looking forward to his next show in Philadelphia, where recently implemented labor changes are supposed to keep the city more affordable by, for instance, allowing exhibitors in booths of 200 sq. ft. and smaller do some of their own setup.

Fardy is another show manager who is pinned to destinations commonly regarded as expensive. As the Health Industry Distributors Assn.'s vice president in charge of the HIDA MedSurg Conference & Expo, he must work within a four-year rotational pattern that includes Boston, Chicago (twice) and Philadelphia.

But Fardy hasn't let that deter his efforts to control costs.

For one thing, HIDA hasn't raised the average $33 space rate on the 40,000 sq. ft. show in five years. "That's our way of saying to exhibitors, 'You want to be in tier-one cities, where your business is, and we're committed to having affordable pricing for exhibit space,'" said Fardy.

He has a number of strategies for accomplishing this feat.

One is having a well-informed position from which to negotiate his own exhibit hall rental. The HIDA show was part of last year's ExPact study, led by the Destination Marketing Assn. Intl. (formerly the Intl. Assn. of Convention & Visitors Bureaus), aimed at demonstrating the value of shows to cities, in terms of dollars and cents.

"We were lucky enough to be part of that, so we know the exact value of our show to a city," Fardy said.

"Another thing we do is secure rooms for our affiliate programs, so we can offer meeting rooms at no charge to exhibitors and attendees. We use our buying power to provide that," Fardy said.

This is a favorite tactic of Lee Wood, co-president of MP Associates, which manages several technology association shows.

Wood said exhibit hall rates — which range from 25 cents to $2.50 per sq. ft. — can be tough to negotiate, so whenever size permits, he books events in a single hotel property. There, he can "secure meeting space at no charge. The cost is waived or built into the food and beverage agreements, a much better deal than going to a convention center."