Dusseldorf The order books of business event organizers have been full again since May. “The economy is relieved that face-to-face events are finally possible again. There is a lot of catching up to do,” says Bernd Fritzges, head of the Association of Event Organizers (VDVO).
Because of the pandemic, only a few trade fairs, congresses and events for employees and customers could take place for two years. But after the organizers have just recovered from the compulsory break, the next test is coming up with the high price increases, especially for energy.
The industry looks divided into the new year. 27 percent of companies and agencies are planning more events than in the pre-Corona year 2019. However, 36 percent want to hold fewer events. This is shown by a VDVO survey of almost 500 event planners, which is available exclusively to the Handelsblatt.
“Concerns about affordable energy are clouding the first outlook for the new year,” says Philip Harting, Chairman of the Auma trade fair association. At 44 percent, event managers see high energy costs as the biggest challenge in the industry. According to the survey, they rank well ahead of corona policy (29 percent) and sustainability (24 percent).
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As energy prices soar, event planners face higher costs for location, hospitality and travel. At the same time, many companies have to save in times of crisis. “The event industry is always the first to be hit by a recession,” explains Fritzges from the VDVO. Marketing budgets are reconsidered in economically tense times, reports Stefan Rummel, co-head of Messe München.
Not all events return in presence
According to industry information, the event industry with 1.5 million employees had a turnover of almost 130 billion euros a year before Corona. Almost 90 percent of the business is done with business-related events such as trade fairs, conferences or congresses.
By no means all events return in person. “We take a close look at which formats bring added value on site,” says Frank Dräger from event management at the pharmaceutical and agrochemical giant Bayer.
Such events would be planned with much more care today than before Corona. For example, there are fewer participants at specialist congresses, but they are more demanding. “It’s no longer enough for a conference to take place in a cool city or location,” says Dräger. Attendees expect interactions or guided networking to make the journey worthwhile.
On the other hand, many in-house events such as international project meetings remain mainly online, reports the Bayer manager. This also applies to short meetings with business partners. “Whereas people used to like to meet for half-day or day meetings at the airport or in well-connected cities, these now only take place virtually,” says Dräger.
However, the pandemic has also shown that purely online events do not work in the long run, says Henning Könicke, CEO of the trade association for trade fairs and exhibitions (Fama): “Informal and personal exchange is elementary for the success of business events.” Purely virtual events paid off moreover, it is often not economical for the organizer.
Dräger also believes that face-to-face meetings are essential in order to build trust with new customers – at least when they meet for the first time. Contact with new customers often takes place at trade fairs.
“The trade fair industry is slowly finding its rhythm again,” says Auma boss Philip Harting. “Two years of trade fair bans are still weighing heavily on the industry, which is responsible for 230,000 jobs.” According to preliminary figures, 280 trade fairs will have taken place in Germany this year, and 130 have been cancelled.
High economic damage due to the cancellation of the trade fair
The overall economic damage for Germany from pandemic-related bans, postponements and cancellations of trade fairs amounts to more than 56 billion euros and nine billion euros less tax revenue, Auma calculated on the basis of an Ifo study. According to estimates by the association, 65 percent of trade fair visitors and 70 percent of exhibitors will have returned in 2022. Participants from China and Russia are largely absent.
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“The pandemic first questioned the importance of trade fairs, but by mid-2021 at the latest it was clear that complex and innovative topics need this platform,” says Reinhard Pfeiffer, co-head of Messe München.
According to preliminary figures, 280 trade fairs will have taken place in Germany this year, and 130 have been cancelled.
(Photo: IMAGO/Manfred Segerer)
At least 340 trade fairs are planned in Germany in 2023. However, the stands are now often smaller. “That’s easy on the budget and saves on materials,” says Bayer event planner Dräger. At trade fairs, exhibitors would no longer be able to lure customers with pompous stands, but with valuable content, interesting expert talks and interactions.
Companies continue to send their decision-makers to industry meetings. However, the average number of visitors per company from German-speaking countries has decreased, according to Messe München. “Non-decision-makers who visit a trade fair out of pure interest are increasingly turning on digitally,” reports Fama Chairman Könicke.
Companies rely on shorter events with fewer people
Another trend that saves budget: Business events are often shorter than before the pandemic. “The proportion of multi-day events is declining. That reduces travel and accommodation costs,” says Fritzges. “We question much more often than before whether a participant has to travel halfway around the world for an event,” confirms Bayer’s Dräger. “It’s also a question of sustainability and costs.”
Today, an organizer no longer has to fly in top speakers from the USA, emphasizes Fritzges, head of the association. Connecting experts to a congress via video saves money, time and climate-damaging emissions. However, some companies put forward ecological arguments in order to save for economic reasons.
“We tend to spend less on events,” agrees Bayer’s Dräger. Purely virtual events cost significantly less than those in person. “Good hybrid events, on the other hand, involve a great deal of effort and expense.”
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