London falling

The North-South divide continues to widen, according to the State of the Nation report, published by the Local Futures Group. Despite rising employment across the whole country, the quality and earnings potential of the jobs found outside London and the South-east is still relatively poor, with about a third of the UK’s gross domestic product generated by London and the South-east. Furthermore, a recent nationwide survey found that 24 of the 25 wealthiest postcodes in the UK are to be found in London and the South-east.

London also continues to grow, with a projected 23,000 new homes annually, a population increase over the next ten years equivalent to another new city and more than 600,000 new jobs in the same period. Add to this the capital’s transport links to the rest of the country and the world – plus the fact that the majority of blue-chip companies and major brands are based in the city – and it becomes obvious why the region has such a strong pull for the events industry.

For consumer events, London is the ideal location, thanks to its vast catchment area of high-spending ABC1 consumers. You would need to add together the populations of Birmingham, Manchester, Glasgow, Liverpool and a dozen other cities before you would come close to equalling London’s population and its spending power. It is no surprise that organisers and exhibitors alike continue to view London as the location that offers the greatest return on investment when spending their ever-decreasing budgets.

Jamie Buchan, chief executive of London exhibitions centre ExCeL, puts the point succinctly: “Visitors to consumer shows at ExCeL have an average household income of £43,900: the national average is £27,000. Sixty-one per cent of the population within 90 minutes’ drive time of ExCeL are ABC1s and one in four Britons lives within the M25.” It is hard to argue with figures like those.

At this point, you could be forgiven for thinking that perhaps the events industry in the rest of the country should just relocate to the South-east.

But, however predominant London may be in terms of consumer spending power and transport links, the lack of a major purpose-built convention centre (even though it has ExCeL – a venue that has, in the past, had a well-documented struggle to recoup its investment) has a negative impact on the city’s ability to pitch for and to win some of the large, high-profile, high-spend international conventions.

West End dames

“There is a demand for improved facilities in and around London,” says David Hackett, executive vice-president of business improvement solutions provider and specialist event manager BI Worldwide. “The aged halls of Olympia and Earls Court are not ideal and are too small to house some of the biggest shows. The London Arena suffers in that it is difficult to get to and has inadequate nearby infrastructure (hotels, restaurants and so on) to appeal – particularly for foreign visitors who come looking forward to the bright lights of London only to find themselves in an uninspiring suburbia.”

Navigating the streets of London

It’s not just a lack of large-scale venues that is hurting the capital. While its links with the outside world are second to none, London’s infrastructure is buckling under the weight of its population, which can make getting around within the city difficult and expensive. Also, a lack of reasonably priced hotel accommodation, limited parking and congestion charging all add to the financial burden of hosting events in the city. Unsurprisingly, the North is increasingly seen as a more cost-effective alternative.

Indeed, Lois Jacobs, UK chairman UK of event producer Jack Morton Worldwide (which staged the opening and closing ceremonies of the Commonwealth Games in Manchester), contradicts the Local Futures Group report: “In the events industry I think that the North-South divide is narrowing. Given the current economic uncertainty, tight budgets and the increasingly high costs in the South-east, the industry has started to look at alternative venues. At the same time, increasing investment in regional venues, modernisation of the general infrastructure of the North, improvements in general facilities, venues, hotels, transport and regular services from the North’s international airports have transformed the region into an attractive and cheaper alternative. Cities such as Birmingham, Belfast, Edinburgh, Manchester, Glasgow and even Cardiff owe much of their huge regeneration and recent transformations to investments made in their business tourism ‘product’.”

This is an opinion echoed by Alastair Stewart, managing director of Initial Style Conferences, which has recently invested £15m in two new venues in the North-west. “We see great growth opportunities in the North-west corridor, from Birmingham up to Manchester, through improved transport infrastructure and new venues offering improved facilities,” says Stewart. “London and the South-east remain strong but are suffering from over-investment in ill-conceived venues and chaos in the hotel industry because of SARS, the war in Iraq and a general slowdown in the economy – as evidenced by two of London’s more famous hotels going into receivership and the demise of low-quality operators such as Hanover Hotels.”

Hit the North

The conference market is a prime example of how the industry is moving. The British Conference Venues Survey 2003 – undertaken by the British Association of Conference Destinations (BACD) – shows that an estimated 43 per cent of all meetings and conferences held in 2002 took place in central or northern England, with 40 per cent taking place in London or southern England.

“This suggests that business is dispersed fairly evenly across England, perhaps to a greater degree than ever before,” says BACD executive director Tony Rogers. “The survey demonstrated a fall in the numbers of conferences being held in the major conference towns and cities: for example, London was chosen by 39 per cent of interviewees, compared with 54 per cent the previous year. In the corporate meetings sector, central England was shown to be the most popular region.”

Strong incentive

From the exhibition angle, Syreeta Tranfield, marketing manager of Incentive World and the National Incentive show, feels that an exhibition will work wherever it is located if it is strong enough. “Incentive World, at Earls Court in London, attracted 5,541 visitors in 2003. The National Incentive Show, at the NEC in Birmingham, attracted 3,709,” she explains. “However, the majority of visitors attending the shows do attend from within the area: four-fifths of Incentive World 2003’s visitors came from London and the South and only 15.1 per cent from the Midlands and the North. For The National Incentive Show, the divide is less severe: 45 per cent of visitors came from London and the South and 50 per cent from the Midlands and the North.”

Home is where the heart is

“The evidence is that there isn’t really a ‘place to be’,” says Reed Exhibitions exhibition director Darren Whitehead. “It depends on the target market and to what extent the exhibition is a ‘must attend’ event. It also depends on the sector: the automotive industry has traditionally held exhibitions in Birmingham, for instance, while the Chartered Institute of Personnel and Development goes to Harrogate each year.”

To a large extent, the strength and persistence of the North-South divide lies in the hands of the events industry itself. It needs to move its focus away from London, which effectively alienates a large proportion of UK businesses. “Unless we target the thousands of companies that find it hard to get to London, we’re not going to nurture the exhibition business at grassroots level, and we’re not serving our customers effectively,” says Whitehead.

Stewart says the lead has to come from the Government: “We need to see government incentives to make investment in the regions more attractive, and an end to taxing motorists by the mile, which hurts the North far more than the South, as travelling distances are longer. There also need to be incentives to bring large employers into the North to replace jobs being lost in manufacturing.”

At the regional and local level, government needs to understand the broader economic benefits of exhibitions and to count the total spend attracted to their cities not just the rental revenues from venues. In the current climate of downsizing, a new wave of small, lean exhibition companies are finding increasingly creative ways to sweat budgets, and this includes locating new venues all over the country.

London will always be a strong choice, but the balance of power is shifting.