Navigating Inflation: 4 Trade Show Leaders Share their Insights and Tips for Dealing with Rising Costs
TSNN checked in with four leading trade show professionals to see how inflation is impacting their events, what they’re doing to offset rising costs and what they suggest show organizers do to mitigate the financial challenges of producing shows in the current economic reality without sacrificing the attendee and exhibitor experience.
How has inflation affected your overall events business, and what is your organization doing to offset the increased costs of producing trade shows?
David DuBois, president and CEO, IAEE: As with any fluctuation in the economy, these changes are acutely felt within associations, as budgets are always streamlined. Inflation means that organizers and suppliers must work more closely together in partnerships to find ways to ensure success on both sides. Reaction to these economic conditions is handled in a variety of ways, such as reviewing agreements and continuing the RFP process for several aspects of our core initiatives. Resources are more limited as an association. This is an opportunity to invite proposals that level the playing field and increase competition. Most importantly, we make creative decisions as a team when the need arises.
Sarin Bachmann, group vice president, RX Jewelry Portfolio: Inflation has definitely affected the cost of doing business for us as it has for everyone. We are able to mitigate some of it through long term deals that had been negotiated well in advance with our larger vendors. Our size also helps, as RX negotiates many contracts across our shows, gaining the benefits of scale as a large operator. However, we and our exhibitors are still suffering from the steeply rising costs.
Kai Hattendorf, CEO, UFI: A poll among UFI’s Latin American members shows that a clear majority are increasing their events’ rates in line with local inflation. By comparison, in mature markets most organizers are monitoring the inflationary pressures, but have not acted significantly yet. Many players in our sector still benefit from long term agreements with contractors, and therefore expect to see an impact in the future when these agreements are up for renegotiations, if inflation rates stay high.
Rochelle Richardson, senior vice president, exhibition and event services, AVIXA: With current inflation rates the highest they have been since 2011, the exhibitions and events industry is likely to experience challenges as a result but can be very creative and innovative in how we navigate by focusing on improving customer experience, ways to enhance participation and increasing the value for anyone investing in our trade shows.
Over the past few years, we have worked diligently to minimize the impact of increased cost for our customers by limiting price increases for all show management-related expenses, including exhibit space, branding opportunities, exhibitor meeting rooms, education and sessions, and accessing the trade show. We have also provided our customers with enhanced resources and tools to provide a better overall experience. Most importantly, we are listening to the voice of our customers about what is most relevant for them and their business objectives. We have also invested in technology and new systems for our association to operate more efficiently and effectively.
What specific areas of your events have most impacted by rising inflation, and how have you coped, where have you cut back, and how have you made up for those cutbacks to avoid negatively impacting the attendee experience?
DuBois: We have seen [the impact in] supply chain issues, disruption in food and beverage and AV services, travel costs for event stakeholders, shipping and labor (both temp and staff). Each of these has a unique set of contingency plans to address disruptions. For example, we may expand attendee programs to include decreased registration fees or work with airlines to offer discounts, or with hotels for reduced room rates.
Bachmann: The cost of labor and catering is where we are seeing inflation the most. Inflation is also negatively affecting our exhibitors, as so many of the costs they incur at trade shows are not paid to the organizers and are out of our control. Many shows are losing exhibitors due to these rising costs of exhibiting. For the costs we do control, ensuring we do not cut back anything that would negatively impact the attendee experience is paramount, especially in these years of returning to live shows. Attendee experience is the area where we are investing the most.
Hattendorf: Many of our members report rising costs around staffing and materials, and they are cutting back on “low hanging fruit”-style savings across their events that don’t impact the event itself.
Richardson: We keep the mission of our association in the forefront, which is to be the hub for the pro AV industry and the catalyst for market growth. Our strategy for trade shows then has clarity to focus on how we will build the show brand, provide enhanced experiences for our customers, and make sure our model is sustainable well into the future. We then look at every facet of the trade show to make sure we have alignment with our mission and strategy.
We have relied significantly on market intelligence, data and research to inform business decisions. As a result, we have eliminated programs that were no longer adding value, introduced new offerings and modified existing programs to improve customer satisfaction by making them even more successful.
What are your top tips for event professionals to successfully cope with inflation while still pulling off successful and valuable events that attendees feel are worth attending?
DuBois: Our members have repeatedly told us that they have multiple levels of contingency plans for every aspect of their shows. While the ecosystem is slowly leveling out, one cannot take any aspect of show planning for granted.
Bachmann: Do not cut back on the attendee experience. Negotiate favorable long-term contracts and look to make up for the inflationary cost increase with volume sales versus large price increases wherever possible.
Hattendorf: On this, we have asked markets that have experience dealing with high inflation (like Brazil). A common approach there is contracts that clarify indexation terms. When nothing is pre-defined, the only route is a new negotiation based on facts (showing the price of X and how it was 12 months ago and now). During the 2008/09 recession, a successful strategy was to invest in marketing and showcasing the value of the platforms our industry provides.
Richardson: We find it extremely beneficial to leverage market and business intelligence, and we are fortunate to have an internal team with this expertise to inform and support business decisions. It is also important to partner with vendors and suppliers in our industry that are committed to providing exceptional customer service at competitive pricing. There is tremendous value in providing a platform for your customers’ voices to be heard whether by surveys, committees, groups and one-on-one meetings.
How can event professionals best plan for the near future in light of inflation concerns?
DuBois: Work with your catering company on creative ways to present food and beverage that will keep costs down. Work with the venue to reduce the number of room resets. Manage workflows with your contractors and other service providers on ways to reduce costs. Also, I keep going back to contingency plans and RFPs. This is how you gain new partners, have access to creative solutions and keep competition healthy.
No one can predict the future. As an organizer and head of an association, one has to look at market conditions and rely on forecasting and predictions of market conditions from economists and the like. But again, even at the association level, have contingency plans in place and new streams of revenue to quickly deploy.
Bachmann: Reach out to your vendors early in the cycle to find out their cost increases and lock in rates as favorably as possible. Consider signing a longer-term agreement to mitigate a large increase all at once. Keep in mind that event management is a long-term play, not a short-term one. Do not cut back in areas that will change the experience for your customers. Look closely at the budget to determine areas that could be reduced or eliminated because they are not valuable to your customers.
The cost of venues, goods and services is always increasing over time. Keep the needs of exhibitors and attendees at the center of budgets and decision-making, knowing costs in general will constantly go up, and factor that into all strategic planning. Think about the touch points of the attendee experience from registration to travel to the on-site show floor and their time at the event. Find ways to secure travel discounts and offer hosting packages for key attendees, especially during times of inflation. The more our vendors can work with show management to help keep costs in line for the exhibitors, the larger our shows can be, which benefits all in the trade show industry.
Hattendorf: One common strategy is to convince customers of the value of being at an exhibition, separating this for the pricing. We recommend emphasis in the ROI in different positive aspects for the brands, and always move beyond the pricing aspect.
From many conversations as well as the reporting of the listed organizers, we know that [the rate of inflation] is being watched carefully, and some organizers share their optimism that rates might come down again next spring. However, inflation rates differ between the markets, and there is no clear global trend. Inflation has been a recurring topic in the past, and it will always remain one of the economic challenges businesses and individuals alike are facing. This is a macro-economic issue, and so it impacts everyone alike, unlike other industry-specific issues. Our customers are faced with the very same questions and challenges in their business decisions.
Richardson: While there will always be the need to focus on the economy, we should keep it in perspective that we will go through a recovery and rebound period as well. We are experiencing both of these simultaneously at this time for our industry and confident that by 2023 trade shows will report significant growth across many verticals. Even with the advancement of technology and collaboration, we have learned that face-to-face meetings are invaluable.
The exhibitions and events industry is resilient and agile, with thousands of professionals working diligently towards a more sustainable future to create unique experiences, enhanced connection opportunities between exhibitor and buyer, and increased return on investment.