Show Furnishings: No Immunity From Inflation

In the current economy, there is no rest for the weary, even within the confines of a showfloor. According to Tradeshow Week's 37th Annual Survey of Furniture and Accessory Rates, in 2008, the nationwide average (non-holiday, non-overtime) cost to furnish a tradeshow booth jumped significantly.

Out of 28 furniture and accessory options examined in the survey, only six items – cellular telephones (per-day rental), 11”x14” and 22”x28” signs, DVD players (three-day rental), draped video carts (48”-54” high, three-day rental) and laserjet printers (least expensive, three-day rental) – were less expensive this year, with drops ranging from 9 percent to 39 percent.

“Overall, we ... in the exhibition event (industry are) not immune to what's going on in the general economy,” said Jeff Quade, executive vice president of sales and marketing at GES Exposition Services. “So, certainly increased fuel costs, increased labor costs, increased cost related to servicing events is driving those increased (furniture and accessory) costs. They're being parlayed to exhibitors, and it's quite honestly not anything different than you and I are feeling as consumers when we go to the gas pump or when we go through the grocery store checkout line.”

Some of the biggest price jumps came on items that had dropped substantially the year before, such as Internet access. The 2007 survey showed the national average price for online access was $454.67, down 39 percent from $631.79 in 2006. In 2008, the average cost was $810.97.

And there were no breaks once Internet access was purchased, either. The national averages for laptop computers, $435.84; desktop computers, $360.46; Macintosh computers, $491.93; and the cost of video setup, $465.81, jumped as well, from $360.55, $315.75, $460.23 and $409.27 in 2007, respectively.

Carpeting also saw a hike in price, with a 9'x10' standard piece of carpet jumping $39.53, from $134.74 in 2007 to $174.27 this year. One reason, according to Richard Lewis, Freeman's vice president of national sales, is the high cost of oil, since carpeting is primarily a petroleum-based product.

“The pure problem is, with a lot of our products and services, they're heavily petroleum-based. ... Carpet has got a tremendous amount of petroleum in it,” Lewis said. “We also require a lot of trucking services because our equipment does not sit in the convention center's hotels. We have to transport it from our warehouse back and forth to the site, so every time we have a fuel hike, it certainly affects our bottom line.”

With most costs rising, show managers are scrambling to find ways to make it easier on exhibitors. Sally O'Shea, show manager for the Pennsylvania Landscape & Nursery Assn.'s The PANTS Trade Show (Pennsylvania Atlantic Nursery Trade Show), said she negotiated a deal with her contractor, AEX Convention Services.

“We had a booth package A and a booth package B price where they could get a table, two chairs, a wastebasket and a carpet for a flat rate,” O'Shea said. “So, they didn't have to go a la carte with their rates, specifically because of those (expensive) prices.”

She added that the nearly 900 booths at the show, held July 29-31 at the Atlantic City (N.J.) Convention Center, also had the option of bringing their own furniture in if they did not want to rent.

Andy Minton, director of national sales for AEX Convention Services, said the package deals are offered on a show-by-show basis, but those who get the package tend to save 20 to 30 percent. However, he added, only 20 to 30 percent of exhibitors take advantage of the deal.

Package B, O'Shea said, which included carpet, cost $199 – a deal, according to the TSW survey, since the national average for a standard 9'x10' carpet alone, without the table, chairs and wastebasket, is up to $174.27 in 2008, compared with $134.74 in 2007.

Quade said GES also is doing what it can to help show managers and exhibitors save money when they decorate their showfloor booths. “We've worked with show organizers and ... the exhibitors to help them be more effective in their spend,” he added. “An example of that would be, with ... material handling, picking the lowest class of service, making sure that they're shipping their (materials) effectively to gain or garner the lowest spend.”

Quade said GES also encourages show organizers to communicate with exhibitors early enough in advance of the show to make sure they take advantage of early order deadline dates.

“We really encourage people to order in advance,” he added. “It's much more economical for them, and it allows me to deliver a higher level of service to the exhibitor, allows me to plan more effectively and lowers my cost in delivering that product, so it truly becomes a win-win-win all the way around.”

At Freeman, Lewis said the company's online ordering service helps exhibitors plan ahead. “We have one particular tool – it's called Exhibitor Wizard – it's a tutorial that ... asks them a lot of different questions about what their needs are going to be for the tradeshow,” he added. “What that does is it potentially avoids any show-site charges, because we offer advance rates if they order all their equipment in advance.”

Ellen Beckert, corporate director of marketing and communications for Freeman, said it also is important to take a pragmatic approach when budgeting for an event or exhibit environment.

“If the individual unit costs of things seems to be going up, there's lots of ways around that,” Beckert said. “Maybe you redesign an area. Look at it, and say, 'OK, … is it getting the traffic? Is it getting the usage? Is it worth me spending the money to put this (area) in, or is there another way I can accomplish what I am trying to do, ... and do it in a different way that may not just incur an automatic expense?'”

According to John Rozum, sales manager for World Dairy Expo, furniture and accessory costs weren't the biggest problem at the show, where the facility, the Alliant Energy Center in Madison, Wis., also is the general service contractor. He said that during the show, held Sept. 30-Oct. 4, there was a 1-percent decrease in the cost of furnishings, but an 11-percent increase on electrical usage and a 4-percent increase on freight.

“I guess my thought would have been, with the economy, people would have shipped smarter and cheaper and a little skinnier,” he said. Rozum added that exhibitors also had the option of getting their furniture from suppliers other than the venue.

So, if costs continue to rise, will it become harder for show managers to sign up exhibitors for their events?

“It's going to drive their decision on how they order and what they order,” Lewis said. “My impression is companies are not 'not participating,' they're just participating in a smaller number.”

O'Shea said she believes rising costs will drive exhibitors from shows, but added that she thought that five or 10 years ago as well: “I think (costs) have always been a reason (for lower exhibitor numbers). Our show works with companies that come from ... 40 out of the 50 states and Canada, and the cost to ship and then the drayage cost of handling the product (is high). I think all around costs are just continuously rising. That is definitely something that people are looking at.”

Minton agreed, saying AEX Convention Services has seen a decrease in exhibitor ordering recently, doing without items they once would order if it is not contained in a package deal now.

“It's just really the cost of ancillary services, maybe not getting a padding, maybe not getting a carpet unless it's mandated by the show,” he added. “We begin to see it already a little bit where people aren't shipping in as much equipment.”