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Gaming Guru

Chris Jones
 

Survey Predicts Trade-Show Industry Grows

9 February 2006

LAS VEGAS -- U.S. trade shows are poised to grow in 2006, with key executives projecting increased revenue and hiring, a new survey shows.

"The wind is at the back to this industry, no question," said Michael Hughes, associate publisher and director of research services for Tradeshow Week.

Any rise in trade show activity would be welcomed in Las Vegas, where hotel-casino operators rely on business gatherings to attract visitors during midweek periods.

Conventioneers pumped an estimated $7.5 billion into the local economy last year alone, Las Vegas Convention and Visitors Authority data show.

The city is already home to three of the nation's largest convention centers, with a fourth recently announced as part of Boyd Gaming Corp.'s redevelopment of the Stardust site.

Tradeshow Week, a Los Angeles-based magazine, late last year mailed surveys to chief executives and other senior leaders of more than 560 trade show associations and for-profit show organizers.

Results were released Wednesday during a 45-minute webcast.

Sixty-one percent of respondents said their gross revenue will rise this year, with just 12 percent expecting a decline.

On average, executives said revenue will climb by 5.3 percent, though Hughes suspects actual returns may be higher.

"We do feel that CEOs were being a little bit conservative when they filled out their surveys," he said.

To achieve greater revenue growth, show sponsors must charge more for exhibit space; better promote their shows; and sell more sponsorships or fee-based educational programs.

New business opportunities include creating international events, particularly within China, and increasing the number of shows aimed at consumers.

Executives said collocation could also build business, as Las Vegas recently demonstrated when separate automotive, fashion and furniture events were held simultaneously at convention centers throughout Southern Nevada.

Location itself has also taken on new prominence among show organizers, Hughes said.

That trend could present both opportunities and challenges for Las Vegas, which Tradeshow Week has named the nation's top host destination for 11 consecutive years.

"We've been hearing more about major association events that have either been anchored to a particular city, or have been anchored to a particular rotation pattern, that are really starting to look hard at (whether) they're in the right cities," Hughes said.

Las Vegas has recently stolen long-running shows from cities such as Chicago, Dallas and New Orleans. But as the industry leader, it also has more shows to lose.

Forty-two percent of executives said they plan to hire employees this year; 40 percent will not. Eighteen percent said it's too soon to tell.

Two years ago, only 30 percent said they planned to hire more.

"What's a better gauge of confidence than, 'Will you be hiring this year?'" Hughes asked.

Industries with the best trade-show growth prospects this year include technology and telecommunications; health care/pharmaceuticals; security; and education.

Sixty-four percent of show sponsors said they'll cut costs this year, typically by seeking more "added value" bonuses from host venues.

Trade-show attendance and sales often lag changes to the U.S. economy. Should things slow this year, trade shows are unlikely to slip for at least six to 12 months after a downturn begins.

"Exhibitors need months, if not a year or more, to make the decision to participate in a show," Hughes said.

One-third of survey respondents say the industry has recovered to peak levels set in 2000. Another third said their industry is still down, a trend Tradeshow Week attributes to consolidation in several industries that reduced the pool of likely exhibitors and attendees.

Approximately 13 percent of the 560 leaders contacted responded to the survey, Hughes said. They represented major events that use upwards of 100,000 square feet, as well as small-sized business gatherings.

"We feel it's a very good cross-section of the industry," Hughes said, who oversaw a similar survey two years ago.