Who'll Buy the Last Dog?

With an industry as wide and deep as that of exhibitions, it is often hard to generalize — although sometimes people still do. While there are glaring exceptions here and there across the landscape, it seems as if show attendance (or the lack thereof) is becoming a problem.

In the most recent Tradeshow Week Quarterly Report, for the first quarter of 2006, attendance was down 1.6 percent from the first quarter a year earlier. In and of itself, that's not exactly a drastic downturn; certainly nothing like the experience in the first quarter of 2002, for instance. However, place it alongside news that net square footage was up 2.7 percent over the year-ago quarter and the number of exhibiting companies was up 1.4 percent, and then you just might have something to start worrying about.

That's not all. In the most recent TSW annual consumer show report, net square footage in 2005 was up a whopping 13 percent and number of exhibiting companies 5.6 percent. Attendance was — to put the best spin possible on it — stable with a drop of 0.7 percent.

At that point, you begin to scratch your head and wonder where all these increases in square footage and decreases in attendance have the industry headed.

Those show management companies that are looking at these numbers and believe they can see the future are doing something about it. No, they're not necessarily developing programs to build attendance, working to limit increases in hotel rates, or doing anything else that could help a potential attendee make a case for getting on the plane and going to a show. Instead, they're dumping the losers and replacing them with what they hope will be winners.

Cases in point: Reed Exhibitions recently sold eight shows that had been lagging in attendance to Canon Communications. Dmg world media announced it will cut 15 consumer shows from its portfolio.

I'm sure in both cases, dwindling attendance was not the only, or maybe not even the most important, reason for divesting. In the case of Reed, the decision to get rid of the manufacturing-related shows accompanied a decision by Reed Business Information (another division of Reed Business, of which TSW is also a part) to sell associated magazines as well.

Still, Natl. Manufacturing Week, the largest of the shows Reed Exhibitions sold, attracted 15,401 attendees in 2005, down from 18,791 the year before. Back in 2003, it reported 19,585 attendees.

With the consumer shows dmg is jettisoning, the numbers are even more dramatic. According to reports submitted to TSW, in 2004, the Phoenix Home Improvement & Garden Show drew 26,900; in 2005, 20,000. At the same time, it grew in square footage from 60,140 net square feet in 2004 to 80,000 net sq. ft. in 2005. In 2004, the Scottsdale Home & Garden Show drew 25,400 attendees to a 39,000 net sq. ft. showfloor. A year later, it was 20,000 attendees and an 80,000 net sq. ft. showfloor.

Tell me there weren't some unhappy exhibitors in there somewhere.

If we assume for the moment that attendance problems were among the most significant reasons for choosing to sell these shows, it all makes perfect sense. Most smart business people would make the same decision nine times out of 10. In any industry, the smartest people are constantly moving their foot back and forth between the accelerator and the brake.

If a company like dmg world media, with unquestionably the largest consumer show portfolio in the United States, can drop some losers and add a million dollars or so to its bottom line, why wouldn't it do it? If Reed Exhibitions, or anybody else, can identify what they're good at and get rid of what they don't care about, why not?

In the case of each of these companies I'm using as examples, the shows in question are going to good homes. Of the shows Canon bought from Reed Exhibitions, Canon Chairman and CEO Charles McCurdy told TSW, "It was immediately seen as an opportunity."

Everybody goes home happy, right?

Except for one thing: If, as signs seem to indicate, attendance is ever so quietly and gradually becoming an industry-wide concern, there will eventually come a time when there's nobody left to sell the dogs to.

Of all the ways to quantify the state of the industry, net square footage has long been the most significant way of measuring success over time. Fortunately, for the last few years, there has been more or less steady growth there. However, how much longer can we ignore the growing gap between the arrow of net square footage growth headed up and the arrow of registered attendees headed down?

In early 2003, around the time the exhibition industry was just starting its recovery, the less-is-more crowd was particularly emphatic. Their argument was and is that the sheer number of individuals in the tradeshow aisles is not nearly as important as whether the exhibitors are happy with the leads collected, orders taken, etc. If current trends persist and overall attendance continues to decrease, we will see if this is true.

If, on the other hand, exhibitors begin to communicate to their show managers that they do care that fewer of their potential customers are visiting their booths and are indeed looking elsewhere for information on their products and services, the exhibitions industry will have a dilemma on its hands.