Rent Increases: Rates Go Up, No Matter What

Most managers of the country's largest shows raised their space rates at least slightly in 2005. And while some managed to hold the cost to their exhibitors to 2004 levels, many said they expected to see their rates rise this year.

Reasons cited for last year's price increases and those expected this year range from higher marketing and postage costs to venue squeezes, show maturation and the show's respective industry sector.

Space rates for the largest shows in the United States increased by an average of 2.4 percent, from $22.66 per square foot to $23.20, according to a comparison of the country's largest shows.

The percentage rate of increase was consistent for both association- and for-profit-run shows but, because space is typically more expensive in the for-profit sector, the average increase there was greater. The average space rate to exhibitors for for-profit shows went from an average of $24.40 to $24.99 per square foot, while association-run shows increased from $21.20 to $21.71.

One for-profit that did not raise space rates from 2004 to 2005 was Prism Business Exhibitions. The firm this year will produce 17 shows, including the Tradeshow Week 200-ranked WasteExpo (No. 105).

"Keeping our customers' best interest in mind and providing a service for the industry, we always try to keep costs down whenever possible," said Group Show Director Sharon Morabito.

However, Morabito cautioned, "We have found it necessary to adjust booth prices for 2006 on the first two pricing tiers. This will represent the first increase in over five years."

Tamara Christian, president of Natl. Trade Productions and show manager of Coverings (No. 34), is in the same boat as Morabito — retaining the same basic space rate in 2005 of $21.34, but raising it to $23.34 in 2006.

"(The space rate) was the same for many years," Christian said. However, the price of marketing forced her hand. "Our marketing costs have really skyrocketed. Postage costs going up has hit us. It makes a difference, when you're mailing more than a million pieces."

Sharon Hutinett, manager of exhibit sales and services for the convention management division of the non-profit American Academy of Family Physicians, did just the opposite of Morabito and Christian. She raised rates in 2005, but plans to keep them steady in 2006.

Hutinett raised rates for the 2005 AAFP Scientific Assembly & World Conference of Family Doctors (No. 198) by approximately 7 percent — the first time the group had raised rates since 2002. The increase was necessary, Hutinett said, to "keep up with the higher costs we were paying for services."

Susan Katz, director of corporate events for True Value, on the other hand, didn't raise space rates in 2005 — or 2006, for that matter.

Katz credited the group's multi-year contract with its service provider, "which keeps our major costs stable, and we pass on the stability to our vendors." The True Value Fall Market and Spring Market rank Nos. 93 and 164, respectively, on the TSW 200.

John Rozum, sales manager of World Dairy Expo (No. 85), said he raised prices for both 2005 and 2006 because of the rising cost of facility rental at the Exhibition Hall at Alliant Energy Center in Madison, Wis., but tried to keep the increases to a minimum. The rate increased from $11.80 per sq. ft. in 2004 to $12.20 in 2005 and $12.50 in 2006.

"World Dairy Expo is oversold, and we carry a substantial waitlist of companies that are unable to exhibit," Rozum said. "We probably could push prices higher to reach a better supply-and-demand balance, but we feel it is important to the industry to keep our prices as low as possible for our exhibitors."

Tradeshows in the military and jewelry sectors lead the pack with the most expensive average space rates, with averages of $42 and $40, respectively. The sectors that made the biggest average rate increases were lighting (8.8 percent) and veterinary medicine (8.4 percent).

Of those ranked on the TSW 200, the shows with the most expensive space rates were Artexpo/DÉCOR Expo New York ($53) and FOSE ($48, No. 144). The TSW 200 shows with the lowest space rates were the Northeastern Forest Products Equipment Exposition ($4.25, No. 109) and Oregon Logging Conference & Equipment Show ($4.90, No. 49).

Shows in the Mid-Atlantic region (Maryland, Virginia, Delaware and Washington, D.C.) ranked as the most expensive in 2005, with an average rate of $31.35 per sq. ft. The region also had the highest percentage increase over 2004, when shows there had an average space rate of $29.81 (representing a 5.2-percent increase in 2005).

The East South Central region of Kentucky, Tennessee, Alabama, Mississippi and West Virginia was the least expensive in 2005 with an average space rate of $10.85.