Analyse
Furnishing trade fairs face huge challenges
2009 was a critical year for European furnishing trade fairs. Although sales of rented space dropped for the fourth year in a row, even more exhibitors could be attracted in 2009 than in the two previous years. Unfortunately there were considerably fewer visitors to these trade fairs, disappointing many exhibitors. As a result, 2010 will become a difficult year.
We surveyed 14 European furnishing trade fairs made up of almost 25,000 exhibitors and 1.28 million square metres of rented space to get a general picture of the last four years, from 2006 to 2009. The following trade fairs were included in the analysis: Abitare Il Tempo, Ambiente, Decorex, Domotex, Heimtextil, imm Cologne, Macef January, Macef September, Maison & Objet January, Maison & Objet September, Salone Internazionale del Mobile, Proposte, Stockholm Furniture Fair, Tendence.
Exhibitor figures recover in 2009
Exhibitor numbers were the highest in 2006 at a cumulative figure of 25,060 exhibitors. They dropped in the economically rich years of 2007 and 2008, before almost reaching 2006 levels in crisis-ridden 2009 with 24,828 exhibitors (see ‘Exhibitor Figures’ chart).
Source: AUMA / internal calculations
The top three furnishing trade fairs in terms of the number of exhibitors in 2009 were:
1. Ambiente with 4,479 exhibitors
2. Maison & Objet January 2009 with 3,460 exhibitors
3. Maison & Objet September with 3,144 exhibitors
Rented space figures in decline
Developments in rented space were less positive, with less and less space being sold to exhibitors each year. From the record level in 2006 of 1.39 million m2, it has fallen continuously to end at 1.29 million m2 in 2009 (see ‘Rented Space Figures’ chart)
Due to clearly reduced sales in exhibition space in 2009 with the number of exhibitors once again rising at the same time, the average booth size shrank from 56.53 m2 in 2008 to 51.92 m2 in 2009.
Taking a dynamic view of the trend, however, shows that some large trade fairs were able to rent substantially more space than in 2008. These are the two editions of Maison & Objet, both of which were able to increase space rental by 20% thanks to the extra space now provided by the new Hall 7 in Villepinte on the outskirts of Paris. Macef also reported growth of 14.7% at its January 2009 fair.
Source: AUMA, internal calculations
The top three furnishing trade fairs in terms of rented space in 2009 were:
1. Ambiente with 183,122 m2
2. Salone Internazionale del Mobile with 149,871 m2
3. Maison & Objet January 2009 with 130,000 m2
Visitors: Figures calculated using various methods
First, it has to be said that there are various methodsin use for calculating visitor numbers to trade fairs.Many exhibitors and visitors are sceptical of publishedvisitor numbers because their personal estimate oftentells a different story. However, most of the tradefairs mentioned here are subject to regular audits andmethodology checks by external auditors. Still, the rules applied by these regulators are not completely identical. Although this is a largely unknown fact, it is very important to understanding published visitor numbers.
The most important point is that many trade fairs do not count the number of visitors but the number of visits = admissions. Therefore, a visitor who stays two and a half days will be counted as three visits to the fair. This method is used, for example, by FKM e.V., an auditing association for German trade fair companies. Other trade fairs, among them Decorex, simply count the number of tickets sold.
Visitor numbers clearly down in 2009
Because of the various counting methods in use, visits and/or visitors to the 14 trade fairs examined here can not be simply added together. But since these methodshave not been changed in recent years, we can paint a rough picture of the trends in visitor numbers.
Total visits and/or visitors in 2009 fell by 17.32% compared to 2008. This is a substantial decline whose blame we can only lay at the door of the economic crisis in 2008 and 2009. There are structural reasons,too, such as generally stricter process controls and limits on employee working hours and the consolidation of the retail sector. This has led to a reduction both in the number of visiting days and visitors.
Of the events in this survey, only Decorex in London reported more visitors, a very respectable 13.4% increase compared to the previous year. All other trade fairs reported declining visits and/or visitor numbers in 2009.
A disappointing situation in 2009
To sum up, the last years have seen the numbers of visitors drop continuously and sharply at all 14 trade fairs in this survey. The amount of rented space also declined, although not quite as dramatically. On the other hand, exhibitor numbers rose again in 2009. These developments point to a very disappointing picture in 2009 (see ‘Development of Furnishing Trade Fairs’ chart).
Source: AUMA / internal calculations
What will 2010 bring?
Participation in trade fairs is cyclical – in other words, when companies feel the need economise, then this is the area where they do it. This trend can be tracked over many years. In 2009 the furnishing industry did not escape the crisis unscathed, neither in textiles, furniture nor other furnishing products. This leads us to assume that trade fair budgets set in 2009 for 2010 have been downsized.
This cyclical effect has been exacerbated by the declining visitor frequencies in 2009, again mainly due to the crisis. Visitors can react very quickly and cut the number of days or the number of employees travelling to trade fairs last minute. That was already clearly the case in 2009.
Exhibitors cannot react as quickly for a number of reasons. These include cancellation charges, loss of booth locations, changes in marketing measures if non-attendance at trade fairs is planned, and so on. This leads us to expect a delayed decline in exhibitor numbers in 2010.
Visitor advertising crucial
If the number of visitors were to shrink again in 2010, it will confirm the more restrictive policies imposed by decision-makers on attendance by exhibitors that is assumed here. So far, so good. As a result, the key to positively developing trade fairs will be to step up visitor advertising. Ideally it should already get underway in 2010 to enable exhibitors to start making more business contacts as well as persuade them of the trade fair participation marketing tool once again.
Uncertain economic outlook in the furnishing sector
Whether cyclical developments will lead to more buyers coming to furnishing trade fairs and/or staying longer is currently a moot point.
Positive effects should lead to
1. fairly empty stocks of some products by now
2. positive economic forecasts once again for many countries in 2009
3. general consumer confidence clearly rising compared to Q1 2009
4. the general willingness to renovate house and home again reaching the long-term average (according to the Consumer Confidence Indicator published by the EU Commission).
What will remain difficult, however, will be
1. the low levels of general consumer confidence, which are still far below their long-term average and had again worsened in many larger countries such as Germany and the UK by the end of 2009. This can be blamed on the fear of losing one’s job.
2. the record low in people’s willingness to build and furnish new houses in almost all EU countries.
Trade fairs are highly effective meeting points for industries and sectors. Important during difficult phases is to make these events difficult to live without for both visitors and exhibitors. Organisers and exhibitors should increasingly work together to ensure that furnishing trade fairs stay exciting and effective.
