25th February 2010

Has the recession affected the cost of exhibiting?

The NEC Venue this month decided to introduce a two-tier pricing structure for use of electricity at the facility.

The NEC Venue this month decided to introduce a two-tier pricing structure for use of electricity at the facility.

Under the new tariff, due to be brought in from April 1st 2010, a 2.5 per cent discount will be available for organisers who choose to use the fully Plug and Play system, using their own cables and isolators.

The traditional method of connecting to the mains supply, with wiring provided by the NEC, will still be available at the full rate.

"Plug and Play is the future of electrical provision in the UK exhibition industry, offering reduced installation times, cost savings and added safety benefits," insisted Kathryn James, managing director of the NEC.

"We have already seen the savings demonstrated by Plug and Play through a number of successful trials with previous events connecting over 100 mains in less than two hours.

"This demonstrates that Plug and Play can be fully used as originally designed, and in these continually difficult times, it can provide great cost-saving opportunities for contractors and organisers, which may then be passed on to exhibitors," Ms James added.

However, the group of Event Supplier and Services Association members who undertake over 90 per cent of installations at the venue suggested that the two-tier system could ultimately compromise build up and break down times, as well as increase the cost of operating the venue.

The representatives from Early Action Group, Joe Manby, Melville Exhibition & Event Services, Showlite and Stanco Exhibitions claimed that the tariff would not work because it would cost users more to receive the same service as they do today.

It would also require a review of the existing tenancy agreements, provide no visible benefits other than to the NEC and offer no savings to event organisers or exhibitors, they said.

So are such measures prevalent and are they leading to a rise in the cost of exhibiting?

Various pieces of research have suggested that event businesses have struggled to make profits in the recession, perhaps suggesting that they have been unable to put prices up.

A recent survey by the Meetings Industry Association found that 37.2 per cent felt the greatest challenge as the recovery progresses would be increasing yield, while 15.3 per cent believed the biggest test would be achieving value for money for clients.

This is thought to be particularly important for clients at the moment, according to the survey, with 69.4 per cent believing value for money to be the highest priority for consumers.

Further research by Market Analyst Plimsoll from December last year suggested that the recession cost the UK event industry £609 million in profit in 2009.

"With demand so subdued and the resultant competition, many companies are unable to charge the price they need to make healthy profit margins," said Plimsoll senior analyst David Pattison.

However, 201 firms did manage to maintain or increase their profit margins in 2009, the research showed.

"Those companies prove that an efficient business selling the right product to the right market can still succeed in the UK exhibition and event organisers industry," Mr Pattison added.

There are examples of businesses that have recognised the financial constraints on their clients and are aiming to maintain affordable prices. The International Food and Drink Event, for example, has frozen its rates until March 2010 and introduced a value package to reduce the total cost of exhibiting.

The Bournemouth International Centre (BIC) has also chosen to freeze its electrical mains tariff for the second year running, absorbing the increasing cost of energy rather than passing this on to event organisers.

BIC has also introduced green initiatives such as switching off the heating and hot water system over the summer to make the venues more energy-efficient and therefore save the facility money.

Eco-friendly practises are possibly the way to go for the events industry as exhibition stand design company Rapiergroup recently succeeded in reducing Renault's show costs by 20 per cent.

The firm designed a sustainable stand for the Eco2 car display at the BBC Gardeners' World Live show in Birmingham and saved Renault money in the process.