Despite the current buoyancy in the exhibition industry, the main exhibition halls still need a constant stream of new events to maintain optimum occupancy levels.
This is partly because shows tend to switch from one venue to another as they grow and also because new facilities, such as those under construction in London’s Docklands and at the National Exhibition Centre, will mean a significant increase in overall capacity.
In many respects, it is the smaller venues which need to do most to attract new shows. They are, after all, where new shows traditionally start. If they succeed, then after a couple of years they may move on to bigger venues – if they fail it leaves a gap in the venue’s diary. So what are Britain’s main facilities doing to help organisers start new events? And how do they ensure they don’t simply subsidise the start-up costs only to lose the event as soon as it can afford to pay the full rate?
Perhaps the most significant initiative in the industry has been developed by Rene Dee, managing director of the Royal Horticultural Halls.
Dee has developed a profit-sharing package in which the Royal Horticultural Halls agree to waive the venue hire fee in return for 30 per cent of the show’s profits. “Although we have a lot of events that have been with us for a number of years, we do realise that we have a niche as a good start-up venue,” says Dee.
“We have, therefore, produced this initiative for two reasons. Firstly we need a constant regeneration of events, so even if successful ones do move we still fill the space. But also from a long-term strategic point of view, the arrangement allows us to continue earning from a show if it does transfer to a larger venue.”
This is because within the agreed profit-sharing deal, the RHH has effectively taken a part ownership of the show which will give it a reduced percentage of the profits once it moves to another venue.
“In the long term, it might be better for us if the show does move on,” says Dee.”Then we can start up another event, but still be earning from the original one.”
The downside, of course, is that if a show fails, the RHH ends up earning nothing.
“We work very closely with the organisers to assess the potential of an event and will take the risk only if we believe the show is going to work,” says Dee. “We are, however, realistic in that we know not all events do succeed but the most we can lose is the venue rental.”
Presently, the RHH is operating the scheme for three new consumer events, The Family Show, The International Festival of Chocolate, and Short Breaks, all run by Touchwood Exhibitions.
“We are not marketing the idea particularly hard because we are busy anyway,” says Dee. “We are a multi-purpose venue and have l06 events booked for this year as it is, so we are not desperate to get new events. I am, however, looking at the possibility of using the scheme to launch a trade show sometime in the future.”
Julian Hurst, director of Touchwood, points out the benefits of the initiative to exhibition organisers:
“We are a small- to medium-sized player and might not have been able to launch these shows without the profit-sharing agreement. It would certainly have been more difficult because we would have had to raise finance because the normal procedure is to pay the venue up front. For a three-day show this often means paying for six days venue rental to cover the set-up and break down periods and it represents a major slice of the overall budget.”
Hurst claims that the three shows covered by the scheme are all on course to make a profit, and that the working relationship between the two parties has been successful.
The RHH is not, however, the only venue to run a profit-sharing scheme. The Bournemouth International Centre has also formed partnerships with the organisers of the Bournemouth Hotel & Cater-ing Exhibition and the Ideal Home Show.
BIC’s head of conference and exhibitions, Clive Tyers, explains why: “We recognise that we are a regional venue, and when people come to us with new events we try to develop a partnership in which the organiser is not hit instantly with the full hire cost.
“It would be a lot easier for us to say that the hire charge for the venue is X – take it or leave it. But the partnership arrangement has allowed us to enter an open-ended relationship in which we become a lot more active in the event. We do, for example, use our contacts with the local media to help market the event.”
Tyers claims that BIC has no set formula for the profit sharing agreement: “It depends very much on the particular event and the organiser, but we would run the scheme only with organisers which have already used the centre and with which we have a good working relationship. So far the events we have run this way have been highly successful and we have made considerably more from the shows than we would had we simply charged for venue hire.”
Unlike the arrangement in place at the RHH, Tyers is not keen to retain some ownership of the event should it leave the BIC: “We are not in the business of promoting events at other venues, so if the show needs to move on because it outgrows our facilities, we would seek to reach a mutually satisfactory financial parting of the ways.”
Other major venues do not operate such schemes but claim that they can offer practical help to get new events off the ground.
At Earls Court-Olympia, a special package is available for new shows using Olympia 2, the smallest facility on the two sites.
“We offer a flexible payment scheme in which organisers pay only five per cent initial deposit,” says Earls Court-Olympia spokesman Barry Brown. “Six months prior to the event, a further 35 per cent is payable, with the final 60 per cent instalment due two months before the show.
“This means that organisers can sell space, receive the revenue and then pay for the venue hire, which helps their cashflow considerably. We also provide a dedicated event manager as a single point of contact and offer as much support and advice as we can.”
At Wembley Conference & Exhibition Centre, first-time shows need to prove their viability before a booking is accepted, as sales and marketing manager Damian Hall, points out. “The timing and planning process is vital to any event, particularly a first-time exhibition, so on receiving an enquiry, Wembley requests to review the business plan to assist the organiser in confirming the viability and selecting the appropriate facilities.”
Practical help with the finance comes through the letting of space as required.
“Wembley encourages part lets of the exhibition facilities to give organisers flexibility when planning,” says Hall. “This allows organisers to increase their capacity as stands are sold and the event grows in size while minimising the initial risk.”
A marketing support package is also offered, which includes featuring the show on the Wembley events list which is circulated to 78,000 people a month, use of the Wembley Stadium database and a full ticketing operation.
The centre also encourages organisers to stage open days for exhibit-ors prior to an event to help them maximise their presence at a show.
The NEC has taken a similar approach in that it encourages part lets of the halls, which can be expanded if demand increases. The centre also assists with support services and marketing.
“We have a starter package which aims to make it a lot easier for first-time shows,” says Trevor Land, group exhibitions director at the NEC. “We can negotiate on behalf of the organiser to get preferential rates on support services, such as hotels and transport, because we have a good relationship with coach operators, Virgin Rail and the local hotels.
“We can also help with the marketing using our in-house team who work closely with the local media and the Birmingham Marketing Partnership. We can, for example, use the centre’s experience to suggest where press and poster site advertising would be most effective,” says Land.
Whether or not organisers feel that the venues do enough to help, there is no doubt that they are making an effort. Although this is symptomatic of Britain catching up with the Europeans in terms of its approach to exhibiting in general, the venues are not, on the whole, active in bringing new shows to the market. Some admittedly have their own exhibition organising division, but these are generally run as separate companies.
The RHH and the BIC, however, have now established a method of working with organisers to create events that otherwise would not happen. The likelihood is that other venues, particularly the smaller ones, will follow suit.