The R he Road to R oad to Reco ecover ery Member Trends & - PowerPoint PPT Presentation

The R he Road to R oad to Reco ecover ery Member Trends & Outlook Study Amsterdam July 2012 Michael Hughes Managing Director, Research & Consulting

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

Key Themes 3

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 & 2011 4

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

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

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 36% 40% 32% 35% 25% 23% 30% 20% 25% 17% 20% 15% 10% 5% 0% Members Expanding Members Renovating 2010 2011 2012 7

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

Event Producers Have Power, but they Have to Invest & Add Value to Stay Relevant #1 Issue for Improve the Attendee Experience Event Producers 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

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

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

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 Age of the Apple iPad months Source: Red 7 Media Research & Consulting 12

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

Growth & Revenue 14

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

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

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

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

North America – Strength of the Economic Recovery North America is a comparatively healthy, slowly expanding economy. 75% 80% Disconnect? 81% of North American 70% members say the recovery is moderate or strong, yet they are also forecasting a 60% 2% drop in attendance in 2012. 50% 40% 30% 13% 20% 6% 6% 10% 0% 0% Strong Moderate Weak recovery Very weak No recovery, recovery recovery recovery, flat we are still in to no growth recession 19

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

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

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

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

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

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

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