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Mike's often irreverent, thought-provoking analysis of the industry-- with an occasional guest columnist.

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Trade Shows: How, Where, & Why

An interview with Tony Lee, CHA's VP of Meetings and Expositions.

by Mike Hartnett (April 4, 2011)

(Note: Tony Lee joined CHA in July 2005 as VP of Meetings and Expositions, overseeing the trade show team responsible for two major trade shows held each year by CHA. The winter show is the 60th largest trade show in the U.S.

Prior to joining CHA, Tony was VP of Sales and Marketing for George Little Management who manage and own trade shows in the gift, stationery, and home décor industries. Tony spent 22 years managing many of the 52 shows that GLM produces each year.

Originally from England, Tony has worked in the trade show industry for 34 years in the UK and the U.S. He is a member of the Int. Assn. of Exhibition Management from whom in 2005 he received a Merit award for service to the U.S. trade show industry. He is currently a national board member of the Int. Assn. of Exhibitions and Events (IAEE) and the New York Area Chapter of IAEE which he chaired for two years. He also serves on the Anaheim Meeting Industry Advisory Council.

Tony has an MA in Marketing from Kingston upon Thames University in London, England and currently resides in Stamford Connecticut with his two daughters.)

CLN: Judging from the CHA and CLN surveys and polls, the industry prefers that the Winter Show stays in the winter. I assume this also means that the Show be somewhere in the Sun Belt and not New York or Chicago in January. With those assumptions, what Sun Belt cities have enough convention center space and nearby hotel rooms to be considered?

TONY LEE: Based on CHA member surveys, the West Coast is the preferred region of the country for a winter show. The host cities with facilities large enough to handle the size of our show and the required supporting hotel rooms include Los Angeles, Las Vegas, San Francisco, San Diego, and Anaheim.

CLN:  For what cities/dates does CHA have signed contracts for? For what cities/dates does CHA have first options for?

TONY LEE: CHA has signed contracts with Anaheim for winter 2012 and 2013. CHA also has signed contracts with Rosemont for the 2011 summer show.

CLN: What changes have taken place in the past 10 years in the convention center business? (For example, aren't there more convention centers for CHA to choose from than before, and aren't the centers more flexible now, more willing to negotiate?)

TONY LEE: Yes, there are more convention centers, but again there is only a handful that can adequately host the CHA winter show. Los Angeles, Las Vegas, San Francisco, San Diego and Anaheim are not new facilities; however, San Diego and Los Angeles expanded their convention centers which only recently made them viable options. The challenge is that most major cities with facilities large enough to accommodate our show are completely full during the January and February periods, which are at the height of the trade show exhibition season. 

In terms of convention centers being more flexible, only with some decline due to the recession have convention centers been willing to negotiate or lower rates in order to attract new business or keep existing business from leaving. This will change again once the economy picks up. It’s interesting to note, for example, that Las Vegas, probably the number one city in size of facilities, has always charged full price even during the recession.

CLN: How is drayage handled? Is it a flat fee or can that be negotiated? What about things like carpeting, tables, and garbage cans – can those prices be negotiated?

TONY LEE: Drayage can be handled in several ways, but the word "drayage" is misunderstood by many. Drayage is the movement of freight from the vehicle at the convention center freight dock to the booth, the removal of empty crates/boxes to a storage area while the show goes on, then the return of these empty freight containers back to the booth, and finally the removal of freight from the booth to the vehicle at the freight dock for return shipment. So drayage involves moving freight and containers a total of four times for most exhibitors.

Drayage charges are never measured by distance traveled as some people want to believe, but by the crew and equipment needed to handle the freight and containers four times. The rates will vary depending on how the freight is packed, as loose materials will be more difficult to handle and therefore more expensive to handle than shrink wrapped, consolidated, or containerized merchandise.

The rates are usually calculated by weight, in our case per hundred weight, with a 200lb. minimum charge. This price will then either vary if the freight is delivered on a regular work day as opposed to an overtime day -- for example, a weekend where rates are double or at least one-and-a-half time’s regular rate. Drayage rates also vary based on the days the show is moving-in or moving out as well as the times of the day. To help reduce these expenses CHA has negotiated flat rates where possible so that the dates and time of day do not matter and everyone pays the same rate.

An alternative way to fund drayage is to charge based on square footage of the booth. In this model the contractor charges show management a per-square-foot rate based on the total size of the show, and the show organizer will then add that fee into the booth price.  This model eliminates a drayage line-item on the exhibitors’ bill but will almost always result in a higher per-square- foot exhibition rate. This model removes overtime and any additional fees calculated on date or time of day.

A third way is for the show organizer to negotiate a rate for some of the drayage and pay that to the contractor on behalf of the exhibitors. This rate would be a bulk rate and would be less to show organizers than if the exhibitor was paying directly to the contractor. Also, for many small exhibitors it means that their drayage would not be a cost to them and for the larger companies they have a substantial saving. This rate has to be the same for all exhibitors.

In the previous examples, exhibitors will not save money if they hand carry their products into the hall as some smaller companies prefer to do, as the fees will have already been negotiated. 

Labor and other rates are negotiated with the unions and will vary from city to city. With regards to furniture prices, those, too, can vary depending on the facility and quantities ordered. In Rosemont, CHA negotiates a bulk purchase at a much lower rate as show organizer than individual exhibitors could secure alone, but CHA is charged for the furniture package for each booth whether the exhibitor uses it or not. So you can see CHA is always looking for the best options for our exhibitors. Other factors, of course, are the size of the show, length of contract with the general contractor, whether you go out to bid, which city you are exhibiting in, and how experienced your show staff is.

The bottom line is that many different things impact pricing, and just as basic services of cable, power, and gas increase each year so do exhibit costs. The trade show industry sees an average increase somewhere between 5-8% per year and CHA is routinely negotiating to provide members with the best priced packages available.

CLN: What goes into your decision about dates? Are there certain events or other shows you want to avoid at all costs?

TONY LEE: CHA’s overarching goal is to bring as many buyers and manufacturers to CHA shows as possible. So we look to avoid as many conflicts as possible. Since January and February are key trade show months across all industries, dates in this period usually bump up to and sometimes overlap with another event. We try to avoid conflicts with other industry events like PaperWorld in Frankfurt, the Tucson Bead Show, TNNA, NAMTA, Toy Fair in New York, Toy Fair in Nuremberg, and Stitches in the UK. We also factor in New Years Day, Super Bowl weekend, Valentine’s Day, Summer holidays, European vacation schedules, as well as regional events like the Road to California that are important to CHA members. We also face scheduling challenges presented by larger shows that exhibit in our host cities, as they have more negotiating power because of the revenue they bring, with a host city and can mandate specific dates that impact our show.

We also explore options for date patterns and which days of the week we need to set-up and move-out in order to have a successful show

CLN: What are the chances of CHA returning to Los Angeles? Las Vegas?

TONY LEE: We have met regularly with the Las Vegas team on this option, and CHA cannot possibly get dates in Las Vegas until 2016 at the earliest, at which time we would not be able to negotiate anything other than full rate for rent because the demand is so high. Regarding Los Angeles, we are still evaluating the member feedback from the 2011 Winter Show to see if our members would support a return to Los Angeles.

CLN: Regarding the summer show, does CHA have signed contracts or first options beyond 2011? Is there a possibility that the show will move again from Rosemont? Does Orlando or some other city remain a possibility?

TONY LEE: CHA has a signed contract for the 2011 Summer Show in Rosemont and an option for 2012 at this point. Summer show success will play a major factor in determining whether the summer show remains in Rosemont or moves to another city.

CLN: Where do you foresee exhibit prices going in the future?

TONY LEE: As discussed, many of the hard costs associated with the show are beyond the control of CHA, but we make every effort to negotiate the best pricing for our members. As previously stated, we anticipate annual increases to fall within industry norms, somewhere between 5-8% annually.

CLN: The 2012 show in Anaheim conflicts with the European Paper World show. What about beyond 2012?

TONY LEE: There are no dates currently available in Anaheim during the January and February timeframe to move the 2012 winter show. We are working diligently with Orange County and the City of Anaheim to try to switch dates with other shows. At this time, it is not clear if we can do this, but we are very hopeful that we can move our dates to avoid conflicts with PaperWorld after 2012.

CLN: There were reports that some attendees signed up for more classes/workshops than they attended, resulting in some seemingly "sold out" that weren't really filled. Is there some way to adjust the system to avoid that problem?

TONY LEE: CHA has always had to deal with “no shows,” since we create a very rich show experience both on and off the show floor. CHA has always had a “stand-by program” so people can be wait-listed to fill empty slots after the first 10 or 15 minutes of the session.

While it is true that the no-show rate for workshops was higher at the winter show than when workshops were individually priced, the new all-access badge did still result in overall a nearly 50% increase in workshop capacity (seats filled) compared to 2010. We will continue to refine the all-access badge policies to improve attendance and grow member participation.

For the summer show, we added two new policies. First, we are implementing a $10 no-show penalty fee. Any attendee that registers for multiple workshops will incur this fee for each class they do not attend. Second, we are limiting the number of attendees from one company in the same workshop to a two-per-company limit. These two changes will hopefully decrease no-shows, and open workshop registration to as many serious buyers as possible.

CLN: Many people believe the shows, particularly the summer show, is evolving into a scrapbook show. What can be done to attract more non-scrapbook vendors?

TONY LEE: CHA continually tries to ensure that the summer show is more than just scrapbooking. For example, for summer 2011 we will have several pavilion areas especially designed to highlight products such as beading, jewelry, and fashion accessories. The show theme of "Craft Fusion" was developed to emphasize the importance of mixed media and the power of “cross-crafting” in order to create finished projects composed of many different crafts tools and techniques. Additionally, our conference seminars and workshops will focus on the many different craft sectors and discuss the potential for mixed media within the industry.

CLN: Don't you face a chicken-or-the-egg conundrum? If an exhibitor doesn't see enough viable buyers, he doesn't exhibit at the next show. But if a buyer attends and is disappointed by the number of vendors in his category who don't exhibit, he won't attend the next show.

TONY LEE: To some degree this is true, but the real solution is more complicated. We acknowledge that the buyer is the key and is the leading-edge because without buyers the show cannot be successful.

Exhibitor satisfaction relies in large part on the quantity and quality of buyers in the hall.  Additionally, in order for exhibitors to be happy, they must see a certain number of bodies in the hall, especially if their booth is not well attended.

We have also learned that the main reasons buyers go to the show are 1.) To see new products; and 2.) To find new suppliers and learn new craft techniques. Placing orders and shopping the show now ranked fifth on their goals or reasons for attending the show.

The main reason exhibitors go to the show is to find new customers followed by generating sales leads and introducing new products. Selling product or writing orders comes in sixth on the exhibitor list of goals and reasons for exhibiting. So it’s not always the sales numbers that dictate a show’s success.

A larger concern is that many buyers are never contacted before the show by exhibitors and are not always aware of the products in the booths. CHA’s ShowBiz Connections program links buyers with exhibitors as they register their product interests. Currently only 19% of exhibitors and 15% of buyers use this free matchmaking tool.

If we can work with the manufacturers to invite their key buyers, while simultaneously inviting the buyers to meaningful conferences and programs, CHA can eliminate barriers and win-back valued buyer attendance.   

(Note: The CHA summer Conference & Trade Show is in Rosemont, IL July 19-21, with education beginning July 18. The 2012 winter Conference & Trade Show will be in  Anaheim, CA Jan. 29–Feb. 1 with education beginning Jan. 28. Visit www.chashow.org.)

xxx

 

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