Readers Speak: How Low Can We Go?

After Sept. 11, the exhibition industry went into an economic downturn that, along with the larger economy, had actually begun some time in advance of the terrorist attacks themselves. The resulting “perfect storm” of travel restrictions, coupled with a reluctance to gather in large public assembly halls, spelled disaster for exhibitions.

Now, by all accounts, the U.S. economy is in trouble again and, by some measures, already in recession.

How do the current economic woes compare with those that started in 2001? Will it be of longer or shorter duration and of greater or lesser severity? Contributing Editor Gary Tufel asked exhibition industry executives.

“The economic turmoil following 9/11 was unique in that it was a combination of a weakening economy due to the technology collapse and the impact of a catastrophic terrorist attack. The technology decline occurred over a period of time, as is the case with the housing and sub-prime mortgage collapse today. In both cases the impact unfolded over time and there was an opportunity for corrective actions to be taken. No such evolution occurred with the events of 9/11 and that may be the most significant difference between these periods.

“Today's economy is recessionary with the impact on the exhibition industry varying by industry sector. However, the slowdown has been anticipated and organizers are taking corrective actions to preserve the viability of their events and to manage expectations of their clients. These actions are critical to the long-term vitality of individual events. For better or worse, we are more experienced in dealing with economic challenges and volatility and are responding more proactively. This can modestly reduce the immediate economic impact and, more importantly, preserves the longer-term value of the event.”

Margaret Pederson

Incoming chair

Intl. Assn. of Exhibitions and Events

“I believe there will be nowhere near the downturn there was in '01.”

Gordon Hughes

President and CEO

American Business Media

“I believe we will look back on the current economic downturn and conclude that the post-9/11 downturn was longer and more severe for the tradeshow industry because that downturn was fueled by the compounding of two substantial dynamics: a severe financial market decline triggered by the dot-com crash and the trauma in financial markets and impact on business travel caused by 9/11.

“The bursting of the dot-com bubble alone had a devastating impact on tradeshow companies that were heavily leveraged in Internet and technology events. With that said, the impact of both downturns will be felt most by secondary events in a market as attendees and exhibitors ask themselves, 'Which of these shows do I really need?' Organizers who continually evolve their events based on deep audience insight will weather this and future downturns most effectively.”

John Failla

CEO

Tesoro Events

“Everything I've read recently says we're in uncharted economic territory. While revenue for events in hard-hit industries has and will continue to be affected, I'm also hearing reports of record attendance and increases in both booth sales and sponsorships over the past six to nine months and optimism going forward.

“Event companies, and most especially media companies, with flat or declining ad revenues – even in the recent good times – seem far more cautious than during the tech boom. Even with a downturn, for most the fall won't be nearly as far, or last as long, as the 2001-plus recession.”

Mary Beth Rebedeau

Executive director, The Society of Independent Show Organizers

President, The Rebedeau Group

“9/11 was a national disaster. We have an economic downturn that has been caused by many different issues, including an unprovoked war, a credit squeeze caused by a greedy investment community and an increase in oil prices over which we have no control. With the balance of payment deficit soaring, I would think any show that attracts international visitors would be doing very well and would like the cycles.”

Lew Shomer

President

Shomex Productions

“The biggest difference between the current economic slowdown and the one following 9/11 for the tradeshow industry is that presently we are dealing primarily with economics versus both economics and travel/terrorism issues.

“Also, the impact of an economic slowdown is always conditional on the industry your event serves. In 2001 and 2002, the energy and mining markets were quite slow, but home building and home electronics events were on the rise. So far in 2008, those industries and trends are tracking very differently, despite being in another possibly recessionary climate.”

Sean Guerre

President

TradeFair Group