Over the course of a year, several viral strains surface and spread to the general population, and we normally don’t notice they’re even there. COVID-19 is different. Given the scale of its impact, we’re all deeply aware of the level of disruption it is causing to economies across the globe, and to the trade fair industry in particular. We know our event venues are closed; we know that there are now new rules for running shows. So, what’s the prognosis?
Starting in China at the beginning of the year, the impact of COVID-19 spread so fast that by March, all major exhibition markets across the globe had been affected. The cancellation of several key events, such as the Mobile World Congress, heralded what was about to happen to the trade fair and consumer events industry. Today, there’s no industry sector or venue that isn’t hit.
The response to all this was to reschedule events: first by a few weeks, but then by months. The average postponement is now about six months, varying by a few weeks depending on region. This movement of shows isn’t without impact. Organisers are making compromises, taking what venue-space they can later in the year, co-locating events if they must. Some push annual events into 2021, while others are giving up: cancelling shows entirely. In the 20-plus weeks we’ve been tracking the industry impact of COVID-19, we recorded well over three thousand major shows affected.
The digital response
All the same, sensible organisers do not leave their customer communities to their own devices for months on end. The question is, how can you get people together when the venue is closed?
RX Global has leant in to run digital events with twenty or more shows publicly converted into a virtual format or promoting digital content, and more on the way. The industry provided digital content before COVID-19 and was prepared to scale-up: Informa Markets, Clarion Events and Messe Frankfurt are similarly focused on supporting trading communities with online formats. And this only scratches the surface. While the major organisers are more likely to run online events, smaller organisers are also turning to digital events when they can, from webinars to forums and small-scale summits.
Attention has turned to the combined use of online formats during physical shows – so-called ‘hybrid’ shows. They will be very popular this year, travel restrictions and event cancellations continue to squeeze shows that depend on international participation. So we see Canton Fair is running a massive show to service China’s export industries, during a time when foreign buyers will be in short supply. Hong Kong’s HKTDC launched Spring Virtual Expo throughout April, combining eight shows in the lighting and electronics, gifts and houseware, and fashion and beauty sectors. The Frankfurt Book Fair is, as I write, combining a distributed physical presence, at the venue and in the city itself, with a strong online presence. Our own BookExpo in New York offered six days of online programming and was well-received.
The COVID-19 situation has also triggered the market entry of unorthodox players, with Chinese multinational tech giant Alibaba a formidable case in point. Aside from partnering with the Shanghai Fashion Week (to integrate its e-commerce platform and tools into the show) it also launched a global online trade show to support foreign trade merchants hit by COVID-19. It is early days but the added attention will spark innovation in the traditional part of the exhibition industry. (Alibaba is not alone: Tencent is also chipping-in, supporting Canton Fair.)
Cash Is King
In a recession it is often said that ‘cash is king’. In normal times, trade shows are engines for generating cash, and cash-flow funds a lot of debt – particularly attractive for private equity. Needless to say, these are not normal times. The attention of private owners is likely to turn to trying to limit rates of cash-burn, while independent organisers no doubt wish their insurance policies covered more than they do. The majority of larger public organisers are engineering corporate finances to pay down debt. In short the industry is being sensibly cautious.
Anyone who is heavily dependent on exhibitions – from organisers and support companies and specialist venues, to tiny stand builders and sales and marketing agencies – will be hurt most during these tough times. We should and do have sympathy for the smaller players in our industry. We support the lobbying efforts of our various industry associations across the globe, as they present the case to government on behalf of the specialist, the family firm and the freelancer.
Venues that were taken over as field hospitals, like London Excel, are being returned to their original purpose. Governments are allowing trade exhibitions to take place under stringent new rules. Countries from Greece to Germany and the United Kingdom are readying themselves to reopen in the late-summer or autumn, and the US state of Georgia is allowing venues to re-open from July.
Assuming COVID-19 remains under control, China and Korea point the way having run well-attended shows in recent weeks, including RX Global’ API China in Qingao, the very first trade show to reopen in China on 9 June in the wake of the pandemic.
It is far too early to be complacent, and the exhibitions industry needs to play its part in keeping the virus in check. At RX Global we have developed a robust framework of measures to support the health and safety of all our customers, partners and employees as our events reopen for business in the new normal. But we can be confident the industry will recover alongside the communities it serves.
Paul Holliday is Market Intelligence Manager at RX Global.