The Road to Recovery

Transcription

1 The Road to Recovery Member Trends & Outlook Study Amsterdam July 2012 Michael Hughes Managing Director, Research & Consulting

2 About the Study & Objectives The third edition of the AIPC Member Survey. 52% member response rate; Response Breakout: Europe: 53% Asia: 17% North America: 14% Australia: 8% Africa: 5% Latin America: 2% Middle East: 1% Objectives Key Themes Growth & Revenue New Buildings & Expansions Marketing & Clients Conclusion There will be a new full study report for members with all of the data presented by major regions. 2

3 Key Themes 3

4 Bad Headlines & Low Expectations Still Decent Growth 5.7% 2011 Centre Gross Revenue Growth Worldwide Average 4.8% Expected 2012 Gross Revenue Growth Worldwide +2.6% Exact Percentage Increase of Actual Growth vs. Expected Gross Revenue Growth Forecast in both 2010 &

5 Two Camps, Two Worlds 56% Centres seeing moderate to strong recovery * 44% See weak to no recovery, or recession ** * Only 7% are seeing a strong recovery. ** 17% are seeing very weak or no recovery. 5

6 Raising Prices While Offering More Discounts 65% Say their exhibition space pricing power has increased over past five years 67% Are engaging in more incentive and subvention activities than five years ago 88% Percentage of AIPC members that say event clients are negotiating more today 6

7 Expansions to Renovations 32% Percentage of members in 2010 with expansion projects underway or planned 36% Percentage of members in 2012 with renovation projects underway or planned 40% 35% 30% 25% 20% 15% 10% 5% 0% 36% 32% 25% 23% 20% 17% Members Expanding Members Renovating

8 Signs of Recovery 58% Members expecting total exhibition and meeting space revenue to increase in 2012 Key Event Services are Seeing Good Growth 16% 16% % % of additional member venues expecting their AV and equipment revenues to increase in 2012 vs. last year (58% expecting growth) of additional venues seeing telecom, internet and tech revenues increasing today (51% expecting growth) 8

9 Event Producers Have Power, but they Have to Invest & Add Value to Stay Relevant #1 Issue for Event Producers Improve the Attendee Experience 51% AIPC members that say event producers require higher quality food and beverage 82% Major event producers that have changed the way they promote value to attendees As event producers and exhibitors need to improve their offerings and value there is opportunity for venues. Source: Red 7 Media Research & Consulting; AIPC 9

10 Today s Event Industry Buzz Words Connected Content Hybrid Impact of Hybrid Events Online Participation Average online event attendance 1,269 Average online event attendance when held during live, physical events 4,294 Percentage Increase (Hybrid Events) 238% Source: Red 7 Media Research & Consulting 10

11 Corporations are Spending on Events & Experiential Marketing Again 2012 Corporate Event & Experiential Marketing Budget Growth Forecast 7.8% growth Key issue: A significant portion of this is not spent at convention centre events. Source: Red 7 Media Research & Consulting 11

12 It s Still Very Early in the Digital Revolution 7% Percentage of consumer media companies with their digital media strategy fully developed * 11% Percentage of business-to-business media companies with their digital media strategy fully developed * * These figures also include many associations with publishing and content divisions. 2 years, 3 months Age of the Apple ipad Source: Red 7 Media Research & Consulting 12

13 Event Producer Quotes on Opportunities, Challenges & Technology The biggest opportunity for our event programs is to foster better, more meaningful and relevant connections with customers both online and at their events. Our goal is to make attendees feel part of a large effective community where they can share and learn. Our key opportunity is implementing the latest technologies to make for a better attendee experience. The biggest technology challenge is keeping up with the continual changes in social media and web site technology. Our biggest challenge is the adoption of new technology with the understanding it takes two to three years for widespread acceptance and adoption. "(Our key technology challenge is) finding a technology solution that does not overwhelm our audience in either introducing technology that is too new or complicated, or offering too many options that they get frustrated. Source: Red 7 Media Research & Consulting 13

14 Growth & Revenue 14

15 Worldwide Strength of the Economic Recovery There are two membership segments those seeing moderate growth and a second half that is not. 49% 50% 45% 40% Top Risks to Recovery Worldwide: 1.) Economy: 59% 2.) Competition: 55% 3.) Hotel Pricing & Availability: 32% 35% 30% 28% 25% 20% 15% 10% 7% 12% 5% 5% 0% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession 15

16 Worldwide Revenue & Attendance Growth 2011 & 2012 Gross Revenue Attendance 6,0% 5,7% 4,8% 5,4% 5,0% 3,8% 4,0% 3,0% 2,0% 1,0% 0,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast 16

17 Europe Strength of the Economic Recovery 45% 40% 35% 30% 25% 20% 44% 29% Europe has the weakest outlook the most selecting weak, very weak or no recovery. 16% 15% 10% 5% 3% 8% 0% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession 17

18 Europe Revenue & Attendance Growth 2011 & 2012 Gross Revenue Attendance 6,0% 5,2% 4,8% 5,2% 5,0% 3,9% 4,0% 3,0% 2,0% 1,0% 0,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast 18

19 North America Strength of the Economic Recovery 80% 70% 60% 50% 75% North America is a comparatively healthy, slowly expanding economy. Disconnect? 81% of North American members say the recovery is moderate or strong, yet they are also forecasting a 2% drop in attendance in % 30% 20% 10% 6% 13% 6% 0% 0% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession 19

20 North America Revenue & Attendance Growth 2011 & 2012 Gross Revenue Attendance 6,8% 7,0% 6,0% 5,3% 5,0% 4,0% 3,0% 2,2% 2,0% 1,0% 0,0% -1,0% -2,0% -3,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast -2,3% 20

21 Asia Strength of the Economic Recovery 35% 35% 35% Asia is a mixture of rapid growth as well as some weakness. Also, China s growth rate is slowing; what s the impact? 30% 25% 20% 15% 15% 15% 10% 5% 0% 0% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession 21

22 Asian Revenue & Attendance Growth 2011 & 2012 Gross Revenue Attendance 8,8% 9,0% 7,6% 8,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,4% 2,8% 2,0% 1,0% 0,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast 22

23 Australia Strength of the Economic Recovery 70% 60% 60% 50% 40% 30% 30% 20% 10% 10% 0% 0% 0% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession 23

24 Australia Revenue & Attendance Growth 2011 & 2012 Gross Revenue Attendance 10,0% 9,1% 8,0% 6,0% 4,3% 4,0% 2,5% 2,0% 0,0% -2,0% 2011 Gross Revenue 2012 Gross Revenue Forecast -2,0% 2011 Total Attendance 2012 Total Attendance Forecast 24

25 Revenue Movement : % of Venues Seeing Increasing Revenue Streams All Respondents 2011 Venues w/increase 2012 Expecting Increase % # Change Exhibit hall and meeting room rent 53% 58% +5% Food/beverage sales or concessions 49% 56% +7% Other vendor commissions/revenue share 22% 28% +6% Audio-Visual and equipment rental 42% 58% +16% Exhibitor services 32% 39% +7% Telecom, internet, technology services 35% 51% +16% Parking revenues 24% 27% +3% Signage and/or advertising 19% 32% +13% Events owned/produced by the venue 19% 30% +11% Portion of hotel occupancy tax 7% 15% +8% Hotel reservation services 4% 11% +7% Direct government funding 7% 10% +3% Naming rights 5% 6% +1% Public/private partnership(s) 7% 13% +6% 25

26 Were New Revenue Streams Added in the Last Year? No; 55% Yes; 45% Examples: Expanded, enhanced meeting / conference spaces and services Enhanced, improved AV services Enhanced, improved telecom and IT services Advertising and signage income Upgraded Food & Beverage, catering Hosting cultural exhibitions; entertainment and sporting events Changing pricing, package plans, value added Other: parking, security, cleaning services 26

27 Percentage of Centres that Have Partnered on Events & Activities with Shared Risk No; 59% Yes; 41% Examples: Cultural exhibitions and events Art shows and events Entertainment and concerts Consumer shows Share of ticket sales with or instead of space rental 27

28 New Buildings & Expansions 28

29 New Building & Expansion Activity 2010, 2011 & 2012 All Respondents Expansion activity slowing, renovations and refurbishment increasing. 40% 40% 36% 35% 36% 35% 32% 30% 25% 20% 17% 16% 25% 20% 17% 23% 15% 12% 10% 5% 0% New build Expansion Renovation No development plans currently

30 If You Could Redesign Your Centre Today, What Changes Would You Make? 60% 50% 40% 30% 57% 57% 39% Spaces and Areas that Need Most Improvement: Meeting rooms: 53% Exhibit halls: 46% Signage: 35% 29% 23% 20% 10% 0% 6% 1% Other : More networking spaces, lounges, bar, restaurants; Non-conventional areas for meetings; Multi-functional and flexible areas; Larger pre-built auditorium; More adequate loading dock facilities; More truck marshalling space; Storage 30

31 Government Inclination to Invest in Centres Same level; 41% More inclined to invest; 18% Less inclined; 41% 31

32 Marketing & Clients 32

33 How Sales & Marketing Strategy & Approach has Changed While More Marketing Investment is the #1 approach, less than half of venues are doing this. % More marketing investment 47% Started pursuing other markets 44% Switched tactics 41% Pursued local business alliances 35% Changed messaging 26% Developed an "Ambassador" program 21% Changed CVB relations 19% Joined a marketing alliance 18% Other 12% Not applicable 9% 33

34 Types of Events with Best Current Growth or Outlook Associations are the core market. Corporate meetings are rebounding around the world. % Association conventions with exhibits 71% Association conferences and meetings 61% National or International corporate meetings 54% Local corporate meetings 41% For-profit trade shows, trade fairs, exhibitions 36% Entertainment events 36% Governmental events and meetings 34% Consumer and public shows 29% Sporting events 10% 34

35 How Event Management & Attendees are Changing Event Management % 1.) Increased negotiations 88% 2.) Shorter booking windows, booking closer to the event dates 82% 3.) Requiring higher-quality food and beverage 51% Attendees % 1.) Shorter stays and visits at events 77% 2.) Shorter or less tourism-related activity/stays before/after events 58% 3.) Less spending on attendee-related services such as food concessions or business centre 46% 35

36 % of Centres Working More Closely with Local Community Groups than Previous Years Which Groups & Why? Types of Groups & Goals All Communities: More funding Yes; 61% Academic Community: Attract more scientific events Opportunity for interns Increasing medical conventions New ideas No; 39% Business Community: Garner more corporate business and support Actively support business groups to attract more business tourism Local government: Driving the message of our impact related to tax generation, job creation and sales from our guests Financial support from city government is critical factor for choosing the host city General public: Raise awareness of the centre and its contributions; and increase visitors to our public events 36

37 Hybrid Events: Face-to-Face with Virtual/Online Elements Are centres seeing more clients incorporating hybrid events that combine face-to-face and virtual/online elements? Don't Know; 14% Yes; 53% No; 33% Is this trend positive or negative for centres? Unsure; 38% Positive; 56% Negative; 6% 37

38 Top Event Producer Issues & Concerns 100% 90% 94% 90% 85% 83% 77% 80% 70% 60% 50% 40% 30% 20% 10% 0% Improve attendee experience Improve event ROI Expand customer engagement Increase overall attendance Higher quality attendance Source: Red 7 Media Research & Consulting 38

39 Key Themes & Taglines Used by Top Events Gartner ITxpo Focus. Connect. Lead HIMSS Next Spring HIMSS Changes Healthcare InfoComm Communications Intensified National Association of Broadcasters Where Content Comes to Live VMWare Education. Collaboration. Networking. World Market Center All Your Best Connections are Here CES The Industry s Brightest Minds Come Here CES Take Your Place on the World Stage E3 Innovation Unveiled 39

40 Top Exhibitor & Event Marketer Issues 100% 90% 80% 92% 83% 80% 78% 71% 70% 60% 50% 40% 30% 20% 10% 0% Improve event ROI Higher quality attendance Expand customer engagement Improve attendee experience Improve measurement of performance metrics Source: Red 7 Media Research & Consulting 40

41 Convention & Exhibition Attendee Trends Will Attendees Participate in More, Fewer or Same Number of Events Over the Next Few Years? Reasons for Attending 1.) See new products: 85% 2.) Networking: 75% 3.) Stay up to date on industry trends and issues: 74% 4.) See many companies at one time: 64% 5.) Create and/or strengthen industry relationships: 61% Source: Red 7 Media Research & Consulting 41

42 Conclusion 42

43 AIPC Members Most Important New Management Approach, Service, Project, Development or Industry Trend Quantified Verbatim Responses % Sales and marketing related 17% Operational or process improvement 13% IT investment 11% Customer service 11% Expanded spaces 9% Partnering 8% Special local factors, or major unique events 6% Pricing and package plan changes 6% Customer and client issues, trends 6% New revenue strategies, launching own events 4% Cost control 4% Staffing, hiring 2% Food and beverage enhancement 2% Other enhanced services and/or new equipment 2% 43

44 Verbatim Comments on How Clients are Changing Clients are seeking better value for services, especially IT. Customers ask for same kind of spaces, but expect more comfortable facilities with various on-site services as lounges, technical possibilities, state-of-the-art restaurants and cafes, etc. Increase in the demand for break-away spaces, parallel meeting rooms and network spaces. Conferences are becoming more interactive and the spaces need to respond to this. Clients require more direct service, including more active participation in the design of event logistics. Clients are much more reactive to hot-button issues, and much less proactive in terms of anticipating changes and re-positioning their events. They want solutions now to problems they didn't know they had. Centres are increasingly having to provide more for less. Clients are negotiating much harder on the areas that directly affect them and this is usually around the services provided by the centre. Organizer fees, hotel rates, etc. seem to be less affected. 44

45 Conclusion Slow, uneven recovery two worlds. Main challenges: weak economy, competition and empowered clients. Risk aversion by clients and venues. More political focus than on new revenue streams. Digital is transforming media and information sectors; but still only significantly impacting events (mainly positive). Investment shift to renovations and upgrades from expansions. Still, most venue managers feel they need more and enhanced spaces. Event management strategies focused on Content and Community. Opportunity: Event producers need to raise the bar and enhance the attendee, and exhibitor/sponsor, experience. 45

46 Q&A 46