Staying Healthy Isn't Too Cheap

Report by HCEA outlines trends in health care sector over last 10 years

By Michael Hart -- Tradeshow Week, 1/29/2007

Baltimore¡ªThe health care sector of the tradeshow industry has seen steady professional attendance over the last 10 years ¡ª and escalating space rates.

Those were two of several conclusions to be drawn from the 2007 Industry Research Report prepared by the Healthcare Convention & Exhibitors Assn. and presented at its mid-year marketing summit Jan. 18 in Baltimore.

"Associations haven't been bringing in more people, but they have been raising space costs," said Eric Allen, HCEA executive vice president.

The study, which examined more than 15,000 of the health care and medical meetings from 1997 through 2006, also found a slight disconnect between the average size of the health care showfloor (growing) and the number of exhibitors buying space (shrinking).

The number of professional attendees at the average health care show has grown since the dark days at the beginning of this decade. The average show in 2006 attracted 1,889 attendees, a 15.4-percent increase over the 2003 figure of 1,637. However, the 2006 figure represents a slight decline from the 1,932 average of 1997.

Yet while overall attendance has not grown, the average cost of a 10¡ä¡Á10¡ä exhibit booth at a health care show has ¡ª from $1,078 in 1997 to $1,274 in 2006. Space rates took a slight dip in 2000 (to $1,047), but then increased to an all-time high of $1,308 in 2005.

Association executives were quick to point out, while the cost of exhibit space rose an average 18.2 percent over the 10-year period, that was still slightly less than the average rate of inflation. According to the HCEA study, using 1997 dollars (the first year analyzed in the study), the average 10¡ä¡Á10¡ä booth would have cost $1,353 in 2006, rather than the actual cost of $1,274.

"And it's still well below the cost of a physician sales call," Allen said.

Health care tradeshows remain a significant way for pharmaceutical and medical device makers to interact with physicians, their most important clients. Estimates of the cost of a face-to-face meeting with a doctor in his or her office range from $1,000 to $1,800. Consequently, many pharmaceutical companies have been drastically reducing their traditional sales forces.

"Companies are making a unilateral disarmament," said James Hladnik, the event marketing manager for the pharmaceutical product division of Abbott. "They're finding that maybe calling on six or seven doctors a day and getting about 20 seconds with them is not exactly a valuable investment."

So, whatever the cost of exhibiting, "it's still well below the cost of a physician sales call," Hladnik said.

Those same pharmaceutical companies do, however, seem to be buying more space on the showfloor. In fact, at what HCEA defines as a large tradeshow (one with more than 4,000 attendees), the average showfloor grew from 105,479 net square feet in 1997 to 132,371 net sq. ft. last year, a 25.5-percent increase. Still, the average number of exhibiting companies on that showfloor is down 2 percent over the same period of time.

Similarly, the size of the showfloor at what HCEA calls a medium-sized show (one with 2,000 to 3,999 attendees) has grown 27.8 percent, while the number of booths is up only 2.3 percent. Shows with more than 10,000 attendees have seen their showfloors grow by 15.7 percent, but there are .7 percent fewer booths, all of this indicating that fewer exhibiting companies are buying more space each year.

"This certainly increases the potential instability factor for the exhibit hall," Allen said, but at this point, "it doesn't appear to me that the health care (tradeshow) industry is at great risk. Somewhere out there, there will be a number where it is, but it's not there yet."

The study also pointed out the growing popularity of Las Vegas as a health care show destination, and the Hurricane Katrina-triggered demise of New Orleans.

While HCEA listed a mere 20 meetings with at least 300 participants in Las Vegas in 1997, by 2006 that number had grown to 104.

"Whatever happens in Vegas, apparently comes back and stays in Vegas," Allen said.

The average number of health care shows held in New Orleans each year between 1997 and 2006 was 32.3. However, last year's count of sector shows in the city was down to 20.

"That is simply the impact of Katrina," Allen said.

Following Las Vegas on the list of most popular destinations for a health care show in 2006 were Chicago (with 101 meetings) and Orlando (93).