Trade fair industry in the twilight

In the Delphi study conducted by the Agendum agency, 80 percent of companies in Europe answered “no” to the question of whether virtual events will now replace in-person trade shows. However, numerous experts predict that across Europe, a quarter or even a third of all trade shows will disappear. This is forcing Swiss trade show organizers—and even more so during the pandemic—to transform their business models, and the magic word, unsurprisingly, is “digitalization.”.

Connectivity, Not Digitization

The COVID-19 crisis has dramatically accelerated the digitization of the trade show industry. As long as in-person meetings between exhibitors and visitors remain impossible, all Swiss trade show organizers are currently working around the clock to expand their business models. The term «virtual/digital trade show» is misleading because it obscures the function and value of in-person interactions and ignores the multifunctionality of a real-time trade show for marketing purposes. Digitization alone (of what?) is nothing at all; it’s the wrong perspective. Digitalization—for what purpose? Digitalization has existed since the 1980s. What marketers demand today is networking. And that is precisely what has always been—and remains—the role of trade show organizers. In the future, exhibitors and visitors to trade shows will pay organizers so they can reach additional customer groups or engage in a more sustained and successful dialogue with existing customers. Trade show organizers are now in the process of giving their digitalization strategy a boost.

«Trade shows and exhibitions will continue to evolve with the goal of facilitating personal and professional interactions.»

New Digital and Hybrid Concepts

The example of HourUniverse—the watch and jewelry trade show newly created by the MCH Group in 2020 as the successor to the world-famous Baselworld—illustrates just how difficult the necessary digital transformation of exhibition venues and trade shows is. When HourUniverse launched in October 2020, it received almost exclusively critical reviews. The second round of communications was more successful, as realistic content began to emerge.

Since the second major industry trade show, Watches & Wonders (formerly the Salon International de la Haute Horlogerie) in Geneva, has already been canceled for 2021, HourUniverse stands to benefit from the cancellation of these two competing events. It will be interesting to see what becomes of HourUniverse, the status of which—whether it will take place or be canceled—was unknown at the time of this writing. James Murdoch’s entry as a major shareholder in the MCH Group sparked a great deal of discussion. His intentions remain unclear. However, he has injected much-needed cash into the MCH Group’s coffers, along with a capital increase of over 100 million Swiss francs.

The «new» hall at Messe Basel was intended to symbolize a new beginning for the future; now the building designed by Herzog & de Meuron stands empty.

«We must seek new solutions at all levels»

Bernexpo expects a loss in the low double-digit millions for the 2020 fiscal year. Due to the dramatic situation in the trade show and event market, the company was only able to generate revenue from ad hoc events. However, this revenue is not sufficient to offset the massive losses in its core business. A dramatic low point in this regard was the cancellation by Bern’s political leadership of the Caravan Salon in October 2020—which was already underway (!)—a move that led, not least, to the resignation of the previously successful CEO, Jennifer Somm. Costs will be substantially reduced in the coming year as well; the company’s processes and structures will be optimized, its agility will be enhanced, and its digital transformation will be accelerated. Digital and hybrid formats will play an even greater role in the organization of events in the future.

The COVID-19-related restrictions on events, as well as the indefinite ban on trade shows, have had serious consequences for Messe Luzern. In the 2020/2021 fiscal year, numerous trade shows and events had to be canceled or postponed. «The government measures triggered a wave of cancellations, and our business operations have ground to a halt on an unprecedented scale,» says CEO Markus Lauber. He expects revenue to decline by about 95 percent in the current 2020/2021 fiscal year. «We’re short six to eight million Swiss francs through the end of June 2021,» he says. This financial situation is putting Messe Luzern AG under pressure. «We have to seek new solutions at every level,» Lauber explains. Messe Luzern was the first trade show organizer in Switzerland to partner with Conteo to launch so-called «digital meeting places.» From January 10 to 24, 2021, Hardware-Digital took place—the first purely digital event due to the pandemic. Matthias Baldinger, the founder and CEO of Conteo—which develops and provides the technology—says of this format: «I still believe that a trade show visit cannot simply be replicated virtually. I find it unrealistic to imagine a visitor sitting in front of their computer for six hours straight, «visiting» exhibitors, listening to presentations, and exchanging ideas with colleagues—in other words, exactly as the visitor would spend six hours at a physical trade show.” People behave very differently online than they do offline. A digital trade show lasting two weeks? Matthias Baldinger is convinced that a longer duration is necessary.”.

Commenting on the decline in the trade show industry, Christine Bolt, director of Olma Messen, said: «There is no such thing as a trade show crisis per se. There are markets for which trade shows are no longer the right marketing tool. Well-positioned trade shows, as well as broadly based, experience-oriented consumer fairs, will continue to thrive in the future. As a passionate and committed marketing professional, I believe that a well-thought-out 360-degree marketing concept incorporates both digital and analog components—it is both virtual and real.» In the fall of 2020, Olma Messen hosted the «Pätch» for the first time and the beer tasting fair for the second time. She says: «We would host the beer tasting and Pätch again. For our visitors, exhibitors, and employees; for our learning curve; for Eastern Switzerland; and for bringing life to the fairgrounds. Our motto is: We can handle COVID-19. In terms of value creation, however, we’re a long way from the mainstream here—and thus far removed from our actual business.»

Futuristic architecture in Basel—but for now, there are no trade show visitors to bring it to life.

Trade shows are getting smaller

Trade shows are becoming fewer, smaller, and more interconnected in the digital space. And the authors of the Delphi study predict: «As far as Switzerland is concerned, regional focus will initially be an advantage (note: given the travel restrictions that are likely to remain in place for the long term).»

As the trade show industry as a whole shrinks, parts of the exhibition halls will no longer be needed. This is likely to lead to at least a partial repurposing of exhibition grounds in many places, similar to what is already happening with vaccination centers. Jochen Witt, who advises trade fair venues through his firm JWC Consulting, says that for the majority of the venues his company has advised over the past twelve months, reducing the size of an event space has led to qualitative improvements in those very halls.