State of the Industry: Tuning the Economic Engine

If you doubted that German tradeshow organizers still held a dominant position in the world, a recent gathering of the country's leaders might have changed your mind.

In May, AUMA — the Assn. of the German Trade Fair Industry, celebrated its 100th anniversary with about 650 guests in Berlin. They heard German President Horst Koehler say that trade fairs have contributed significantly not only to the economic success of Germany, but also to the cosmopolitan character of the country.

Germany's thriving trade fair industry proves that it is an outstanding host, Koehler said, and that it will continue to be the leading location worldwide for international commerce. He added that German trade fairs have become export successes in themselves, noting that German trade fair organizers conduct more than 200 trade fairs abroad.

The evidence seems to support his views. According to the Amsterdam-based Intl. Congress & Convention Assn.'s 2006 survey of the international association meetings market, Germany was No. 1 in Europe, and second worldwide only to the United States, in number of meetings held, number of attendees at business-related events and number of association headquarters located there. (To be part of the ICCA study, association meetings had to have at least 50 delegates, take place regularly and rotate between at least three countries.)

AUMA also expects increases in all key trade fair indicators for 2007. According to the association's chairman, Thomas H. Hagen, German exhibition organizers are planning 141 international fairs in Germany this year. They are expected to attract around 160,000 exhibitors — an increase of about 2 percent over last year. In addition, AUMA expects average net square footage at these trade fairs to increase by approximately 1 percent, reaching a total of 6.5 million square meters (70 million square feet). The number of visitors is expected to be around 10.2 million, about 1 percent more than at the previous events. It will be the first time since 2001 that the number of visitors will exceed 10 million.

Comparing these numbers with preliminary results for 2006 shows steady growth. Last year the number of exhibitors increased about 1.5 percent, net square footage almost 1 percent and number of visitors 2.5 percent.

With all that said, it's not surprising that it's hard to find many concerns among German tradeshow organizers. If there are problems, they're the kind that organizers in other countries would like to have.

"Not only are the German messes' own exhibitions thriving, German messes as a whole are usually the first into developing exhibition markets," said Ann-Katrin Nolte, a spokesperson for Messe Frankfurt, "and they're also highly successful in attracting independently organized shows to their home facilities."

She offered more positives — one which, she added, is simultaneously a challenge: Europe has about twice the exhibit space capacity of the United States and Italy and three times as much as Asia and France. Germany boasts four of the world's five largest exhibition centers. Yet this abundance of exhibition space can sometimes create battles for events.

"All in all, the market in Germany is saturated," she said.

What's more, messe companies continue to expand their fairgrounds because many officials believe there isn't enough available space, particularly in Stuttgart and Munich, Nolte added.

Expanding is easier than it might be elsewhere, though, since most of the German exhibition industry's structures are publicly owned and politicians see fairs as instruments to promote national trade.

But Bernd Aufderheide, president and CEO of Hamburg Messe, said what mattered to him was not the size of a tradeshow facility, but the occupancy and turnover rates that exhibit halls could produce by hosting different events throughout the year.

Hamburg ranks among the top five organizers in Germany in this regard, Aufderheide added, conceding that some of large organizers in Germany seem to have added real estate without sufficient concern about related costs for maintenance and repairs.

Apart from that, the atmosphere in the German trade fair industry is positive, Nolte said. Following a period of stagnation, enthusiasm for visiting trade fairs is apparently undergoing a renaissance.

AUMA's MesseTrend, a representative survey of German exhibitors conducted by TNS Emnid, indicated that almost 85 percent of German exhibitors wanted to increase their trade fair budgets or at least keep them constant over the two next years.

A prime example is Hamburg Messe, where Aufderheide said there were plans to expand most of its existing events and create new ones. The company will further develop its portfolio of trade and consumer events and, if Hamburg's business plan comes together as expected, Aufderheide predicted it would reach annual revenues of €100 million ($135 million) by 2015.