Base Rates: Batting More Than Average

Unlike last year, when most average labor rates dropped slightly from the year before, the 27th annual Tradeshow Week Survey of U.S. Labor Rates this year shows average national rates increasing anywhere from 4 percent to 21 percent, depending on the skill or item involved.

The survey indicates the U.S. average hourly cost of a general decorator working regular hours rose 5.9 percent, from $68.14 in 2006 to $72.16 in 2007. Overtime rates rose 4.2 percent, from $107.52 to $112.07. Sunday rates also rose about 5.3 percent, from $129.04 to $135.90, the same percentage increase as last year.

In the survey, this year's average general drayage rates also increased. For regular time, the average hourly rate saw a 9-percent jump, from $65.13 in 2006 to $71.03 this year. Overtime costs increased 10.8 percent, from $99.03 to $109.72. The Sunday rate also saw an increase similar to that in 2006, 8.1 percent, from $121.72 to $131.70. The increase from 2005 to 2006 was 8.2 percent.

"Our No. 1 key cost is labor, and it rarely stays the same and it never goes down," said Jeff Quade, executive vice president of sales and marketing for GES Exposition Services. "I think labor costs are going up about 4 to 6 percent."

He added the survey is just one point to look at when formulating a budget for a show because the rates vary greatly show to show depending on the venue, the move-in and move-out timing and services provided by the show management.

Factors other than labor also are increasing the costs of shows.

"The cost of oil and the cost of (natural) gas can dramatically increase (the costs)," Quade said. That includes the costs of materials, like floor coverings, that are made from polymers from the natural resources and transportation.

When evaluated city by city, the survey indicates that one of the steepest increases was in New York, which saw a 51.2-percent increase in the average hourly regular rate for general decorators, from $84.94 in 2006 to $128.45 in 2007. The overtime rate rose from $116.45 to $173.71, a 49.2-percent increase. Sunday rates jumped from $137.76 to $222.61, a 61.6-percent difference.

Show managers who regularly organize events in New York said the rate disparity they experienced between 2006 and 2007 was not quite as large as the TSW study would indicate. However, they also said the rates they were paying last year are similar to those in this year's study findings.

Deborah Hilfman, group show manager at George Little Management, said the rates for shows in New York — like the New York Intl. Gift Fair, which is held annually at the Jacob K. Javits Convention Center — are more in tune with 2007 figures than 2006.

Hilfman pointed to the regular hourly rate of the decorators as one example.

"Those are the actual rates we work with," she said.

Jeff D'Entremont, group show director for Cycle World international motorcycle shows, which includes the New York Intl. Motorcycle Show, said the differences simply aren't consistent with what he's experienced.

"In some cases your numbers are much higher, and the changes are very different," he added.

Hilfman said the rates for New York shows do tend to be high though, because labor is required for so many showfloor tasks. GLM tries to combat higher costs for some categories by offsetting them with lower rates in other areas, she added. For electricians, GLM goes through a contractor, so exhibitors are paying the same rate for the work whether the electrician is working through the night, earning overtime pay, or not. And for gift shows, GLM includes drayage in the exhibit fee.

"We are trying to make it easier for our customers where we can," Hilfman added.

"Drayage and electrical fees are the biggest factors for us, and the impact varies greatly according to the size of the exhibitor," D'Entremont said. "The overall cost factor of New York does impact our ability to sell space in the market, but we get around it due to our tenure in the market, the show's history and the audience that we bring to the table."

He added that he tries to mitigate costs through the on-site operations team and advance planning. Also, the New York show is a well-attended event, so it's sometimes easier for exhibitors to live with the higher fees.

"Frankly, the customer base has come to accept that New York will be the highest, or one of the highest-priced, markets on our 13-show series, but with an attendance number that is consistently No. 1, they just work with it," D'Entremont said.

In the 2007 survey, the cities with the highest rates for general decorators were San Francisco, increasing 4.5 percent ($104); San Jose, Calif., 8.9 percent ($103); Boston, 7 percent ($100.37); and Philadelphia, 11.8 percent ($95.85). The lowest rate in that category for 2007 was Columbus, Ohio ($34.50).

In the 2006 survey, the cities with the highest hourly rates charged to exhibitors for general decorators were the same, albeit with lower numbers attached: San Francisco ($99.46), San Jose ($94.54), Boston ($93.76) and Philadelphia ($85.73).