Good for the shows! Maybe the union stanglehold that everyone in america hates (except the union and it's members) might get the idea that they are a dying breed....but I doubt it. And they wonder why America's competitive edge is gone.

I agree Steve! Exhibitors need to start demanding that show management create more competition with its vendors or pull out of the shows. One thing I think exhibitors forget is that the industry revolves around THEM...not vice versa! These GSC's seem to think they can get away with anything they want, and I think the more educated exhibitors are about thier powers, the less significant the GSC's become.

Will i agree that costs are high, you need to also remember that because the show organizers demand so many free services (reg areas, carpeting, decorating, etc) from their service contractors - they are at fault as well. The only way the service contractor can recover those costs is with extra mark-ups on rigging, freight, electricity, etc

You can't blame it on the contractors, it is much bigger than that. There is cost shifting in the exhibition industry and you can't look at one line item and assume it represents the entirety of the financial model. Contractors provide a significant amount of services to organizers at low or no charge, which are offset by profits on other services - including labor and material handling. The contractors aren't keeping the majority of the profit from these specific items. In addition to the cost of providing the "no charge" services, the contractors have significant overhead that must be paid for somehow. In the end the exhibitors pay for all of the show services, which they and the attendees also benefit from. In addition to highly subsidizing the show infrastructure through higher exhibitor rates, some show organizers require a commission on exhibitor services from the contractor, which obviously comes from rates being increased even further. Whether or not these charges are paid for in the square foot price, or on other services the costs have been shifted to, is between the organizer and the exhibitors.

The real culprits are the exhibit houses and even more the exhibitor appointed contractors (also known as I&D providers) who provide none of the "no charge" infrastructure services to the show and have very little overhead, but still charge the same mark-ups. In fact, in many cases the EAC's are adding a mark up to the prices contractors charge, for services they don't even play a role in providing (simply order and invoice on behalf of the exhibitor), often that mark up is 20-30%. Worse, they are diluting the volume of services being provided by the contractors which causes the prices charged to increase further. To get costs in check, the EAC's need to be eliminated from the show floor or be assessed for an appropriate share of the show infrastructure costs to offset the impact they have on pricing.

All that said, when Chicago is benchmarked against other markets, it still loses because of its high prices, generally caused by high labor costs (actual rate paid to employees) and ancient rules that are anti-competitive and anti-productive. If shows were disappearing you could blame it on the model, if shows are moving it is appropriate the blame the city.

For further proof that it isn't the contractor who is "gouging" you need look no further than the financial results of one of the largest contractors, GES (www.tinyurl.com/GESRESULTS, www.tinyurl.com/TSWCOVERAGE). GES clearly isn't taking wheelbarrow loads of money to the bank. We are fortunate to have a public company, who's performance can be reviewed to refute the myth that contractors are the cause of high costs. And once you know that GES isn't gouging, you must accept that the other contractors aren't either as they participate in a very competitive market that keeps all pricing at a common level.

So though it is easy, as Scott Samuels proves, to try and blame the contractors, it only takes a simple review to confirm that the Chicago's problems are Chicago's and the contractors are a vehicle in the cost shifting model, not the driver.

In response to Defending Contractors commented:

I can't blame you. You are under the payroll of GES.