Furniture Costs Rise

Because the economy is the way it is, many might have expected prices to drop in Tradeshow Week’s 2009 Survey of Furniture and Accessory Rates.

They’d be disappointed. Of the items and services exhibitors order the most – upholstered armchairs, basic sofas, a 9’x10’ standard carpet, the cost of cutting and laying that carpet per square foot and Internet access – the national average of only one, Internet access, fell in this year’s survey, compared with last year’s.

The lowest cost option of Internet access averaged $810.97 last year. This year, the average was $701.49, a 13.5-percent drop.

The cost of the other frequently ordered items rose 2.8 percent to 11.1 percent this year, compared with last year. The smallest of those increases was the price of an upholstered armchair, which rose from $104.83 last year to $107.74 this year. The largest of those increases was for the basic sofa, which cost $575.94 last year, compared with $639.84 this year.

Jeff Quade, executive vice president of sales and marketing at GES Exposition Services, said, regardless of the recession, the cost of items increases 3 to 7 percent each year, and those cost increases have to be passed along to exhibitors.

“That’s traditionally what it’s been in previous years, and that does not surprise me at all (that the survey showed increases),” he added.

The general service contractors are trying to remain aware of customers’ needs, while still generating revenue, said Larry Arnaudet, executive director of the Exhibition Services & Contractors Assn.

“Contractors are trying to keep their increases to a minimum, almost to a fault,” he added.

Arnaudet said the economic difficulties and reduced participation at shows – with both fewer exhibitors and less space used by those participating – has led to reduced revenue for contractors because smaller exhibits mean fewer materials ordered from the GSCs.

Richard Lewis, vice president of national sales at Freeman, pointed out that even if an exhibitor rents the same amount of space as in previous years, the contractor still might see a revenue decline.

“If the exhibitor in the same 10’x10’ booth the year prior had three reps attend the show, it is likely they had two reps attend the event this year (because of) the attendance numbers being down,” he added. “Thus, they rented only two chairs versus three chairs, so our revenue is down 33 percent.”

To combat that trend, GSCs have looked into other ways to generate revenue, including bundling.

Arnaudet said he likes to compare bundling to ordering the special at a Chinese restaurant: You get the entree, soup and egg roll all for $5, when purchasing them separately would cost you significantly more.

Bundling means that exhibitors know up front exactly what they will pay, plus it allows the GSCs to streamline operations behind the scenes, he added.

Lewis agreed. “(Exhibitors) want to know what to budget and have no surprises. ... The core exhibiting cost ... (is) identified at the time they purchase the booth space,” he said. “... There are mixed reviews because the one-size-fits-all is very difficult. There are just so many variables to be considered to bundling products.”

Lewis added it’s especially helpful for exhibitors who are in the market to rent, rather than own their materials.

For those who appreciate the bundling and other changes in the business, Arnaudet said he doesn’t foresee a difference in offerings after the economy recovers.

“There are a lot of changes that are being made in the way contractors and event organizers are doing business now, and it’s because of the economy,” he added. “When the economy picks up, I don’t see them going away.”

Quade said he never would have predicted the events of the past 12 months, with several major federal bailouts of industries, at the time of TSW’s last furniture and accessories survey and he couldn’t predict what might happen in relation to the cost of these items in the coming year.

“We need to look at the individual exhibitors’ total spend and how we can help that exhibitor manage that total spend,” he added.

Lewis said he still predicts cost increases after the economy recovers, though he added he hopes they’re less than they have been in previous years.

But that’s not where Freeman’s setting its sights.

“Demonstrating the tremendous value of face-to-face marketing is our focus,” Lewis said. “To that, we need to control costs and deliver the very best service. We need to find new offerings that add true value to exhibitors, attendees and show organizers and have metrics to measure that value.”