Some Asian cities will move mountains and sea to build a convention center. Literally. Take the Hong Kong Convention and Exhibition Centre, which just completed a 1.67-million-square-foot addition on land reclaimed from Victoria Harbour--at a cost of $620 million U.S. dollars. Or Kobe, Japan. Devastated by an earthquake in 1995, the port city was able to open a new international convention center two years later on an island made of fill from nearby mountains.
Japan, in fact, has positioned 45 cities as international convention destinations. Tokyo is among them, with not one but two new convention halls. New facilities have also recently opened in Singapore, Bangkok, and the Philippines. Even Vietnam has a new purpose-built convention center, albeit small by U.S. standards with 20,000 square feet of space. Propelled by double-digit growth, these Asian areas have embraced meetings and expositions with an astonishing alacrity.
"I can remember when we used to do shows in Asia in stadiums, fields, and racetracks," recalls Stephen A. Sind, president and CEO of the Center for Exhibition Industry Research (CEIR), in Bethesda, MD. Sind organized the first U.S. commercial exhibition in China for the U.S. Department of Commerce in 1979. In the early eighties, he headed up Reed Exhibition Companies in Asia. "The growth of purpose-built facilities all over Asia in less than a decade has been phenomenal."
The emerging markets of Asia, of which China is by far the largest, have enormous capital investment, technology transfer, and training needs. And that spells opportunity for event organizers.
The region is a hotbed of international exposition activities, from show launches, spin-offs, and acquisitions to lucrative joint ventures and show licensing opportunities. Well-established show management companies in the region, such as Reed and E.J. Krause & Associates in the U.S., face keen competition. German tradefair organizers, for instance, have targeted Asia as their hottest international arena. Among them is Frankfurt GmH, which recently debuted the China International Trade Fair Sanitation, Heating, and Airconditioning. And Messe Dusseldorf ASIA has launched five existing German trade fairs in Asia this year.
But has the tide turned for exposition growth in Asia? Weakened currencies in Southeast Asia and overextended banks in Japan caused a chain-reaction meltdown of international stock markets in October, first in Hong Kong, then around the world. The International Monetary Fund has stepped in to help some Southeast Asian countries, and the Hong Kong market has since regained strength, but the region still faces serious economic problems. Does Asia still beckon association shows? Moreover, what can associations learn from the for-profit companies that have pioneered show development in Asia for the last two decades?
The For-Profit View They call Phil Ullo "the guy who opened up China for Reed." Ullo started his own company, Ullo International, specializing in show management and acquisition, after retiring from Reed Exhibition Companies as president and CEO a few years ago.
"In 1972 we were the first foreign company to establish a show in Tokyo," he says of the National Electrical Packaging and Production Conference. He took the same show to China in 1981 "when the market was just showing a glimmer of opening up to the rest of the world." Back then, he says, "you couldn't get a visa to China unless you identified the bed you were going to stay in."
Much has happened since then, but one thing hasn't changed. "Government plays a major role in what happens in these countries, far more than here," he says. The reason there are so many new convention and exposition halls in Asia is because governments recognize the economic impact of the business. "This is a very sophisticated market. Asians in the industry are soaking things up like sponges. There are some extremely sophisticated facilities in Asia, more modern than what we have in many parts of this country."
The economic problems in Asia are, in his view, "an adjustment" to an overheated investment environment. "Overall Asia is growing at a much faster pace than any other place in the world," he points out. Indeed, according to U.S. Department of Commerce projections, Asia will surpass the western industrialized world in gross national product by 2015. "This is not a part of the world you write off," Ullo says. But he cautions, any association looking to put a show in Asia better have a very good answer to one question: Why?
Adds CEIR's Sind, "In the near term, the Asian economies are in for a slowdown, but this happened in the 1980s too. I find the Asians a very resilient people and very smart investors. . . . Associations need to look upon a move into Asia as a business venture, not a policy decision, as in 'It's our policy to go international.' You've got to answer the questions: Is there a need to do this? Does the membership see the necessity for a show? Does the visitor, in say, Hong Kong, want another show? You can't wait for boards and committees to study the questions forever. It's a question of . . . speed."
A Case in Point One association that has taken the leap into Asia is the Personal Communications Industry Association (PCIA), in Alexandria, VA, which will launch the Wireless Showcase Asia, January 21 to 23, 1998, in Singapore's new convention center. The conference and exposition is expected to draw 3,000 to 5,000 visitors, says Margaret Cassilly, PCIA's international director of conventions.
Cassilly says PCIA's show has the advantage of being very focused and very targeted--the only show on advanced wireless communications in Asia.
Asia and Latin America are seeing 90 percent growth in wireless communications, she says. As an English-speaking gateway to Asia, including India and Australia, Singapore was a logical choice of venue for the Wireless Showcase.
"Private companies have been crusaders in launching shows in every corner of the earth," acknowledges Cassilly. "But they are not there to serve a membership. They can move from industry to industry, they can pull a plug or fail at a show and move on to the next." In short, they can take more risks. "But associations can't afford to risk their reputations, especially if you want the board to buy in on the next event."
Harvey Friedman, an experienced show organizer in Asia and industry director for the international tradeshow management andfirm Nth Degree, agrees. "Independent show management companies and associations are apples and oranges. For-profits have aggressive investors willing to take big risks where the potential return is great. Associations are far less likely to speculate."
But whether you're an association or a private show management company, "you need to have people in-country that can help with research, marketing, understanding local protocols. You're not going to be successful if you march in and try to do it on your own," Cassilly emphasizes.
Adds Stephen Schuldenfrei, executive director of the Society of Independent Show Organizers, "The Ugly American tourist became, over the years, the Ugly American show organizer, creating a long history of for-profit shows that have failed because of that attitude. In recent years, partnerships and joint ventures have become far more prevalent internationally."
For Wireless Showcase Asia, PCIA formed partnerships with a local tradeshow management company, obtained the official backing of the Telecom Authority in Singapore, the Economic Development Board, the Association of Telephone Equipment Suppliers, industry trade publications, and the Center for Wireless Communications. These groups helped develop seminars and promote attendance and were part of an advisory committee.
"You can travel to Asia ten times and not be an expert on how they do business, how they do panels, registration, exhibit sales," Cassilly says. Moreover, in many Asian countries it is important to have the right political support. In this case, it was critical to have the Secretary of Telecom attend, which has helped give the show tremendous credibility.
"Working in thismarketplace benefits our exhibitors. We are there for them domestically, and we have to be their ears and eyes in other parts of the world," Cassilly says, adding that it is important for association event organizers to "look at the competition, the attendance base, the buying structures, and then evaluate the market opportunity. Ask yourself, too, is this a comfortable place for members?"
Not for Everybody Asia offers tremendous opportunities for tradeshow expansion, but each opportunity has to be carefully evaluated, as the American Society of Training and Development (ASTD), based in Alexandria, VA, found out earlier this year.
"We were approached by a quasi-government agency in Singapore to help put on a convention and exposition in Singapore similar to ASTD's U.S. event, only smaller," says Lee Ann Burr, director of conferences and exposition services. "They thought ASTD would lend credibility to the event."
Burr was part of the ASTD staff that spent a week in Singapore to discuss the possible collaboration. "We were treated like royalty," says Burr, but at the end of the week, it was hard to figure out what exactly had transpired. After a series of letters were exchanged between the agency and the association, followed by some conferring with a Singaporean show management firm, ASTD realized that the agency wanted to use the organization's name in the show but was planning to handle the logistics--and revenue risks and rewards--on its own. That was not acceptable to ASTD staff, who felt that the organization's reputation was at stake.
"Their interest was genuine, but we were very far apart on a lot of issues," says Burr. "That meeting is dead for us but not the subject [of partnering or launching events in Asia]. There is a tremendous interest in productivity and training issues in that part of the world," she says.
While many show management firms have found it lucrative to license their show name to groups in Asia, this is not an option for most associations, who are prevented by bylaws from doing so and/or do not want to lose control of the event.
For some associations, it makes more sense to be an exhibitor in Asia rather than a show manager. Wood Machinery Manufacturers of America, in Bethesda, MD, participates in trade shows in Thailand, Singapore, and China.
"Our members make up 70 to 80 percent of the U.S. market, but it's not our objective to run our own show. There are already too many shows in the field," says Harold Zassenhaus, the association's export director.
"We take out 100 or 200 square meters of space and sublet it to members," he notes. "We help with booth design, freight, and other things that make it much easier for our members to exhibit in Asia."
The Bottom Line Says Sind, "The for-profit companies will love you, but maybe for some associations the best way into Asia is to be part of a major U.S. pavilion. Why reinvent the wheel?"
One of the problems for U.S. exhibitors, though, is identifying the right show--often there are too many and not all of the same quality. "Asia is the land of the entrepreneur and anyone can put out a brochure, give themselves a name, and start selling. . . . Of all the markets, Asia probably has the most duplication of shows," Sind acknowledges.
Because there are so many shows in Asia, says Nth Degree's Friedman, "the events that are first into the market, and have established a reputation and credibility, are the most likely to succeed."
It takes careful research and some investment, "but if you can deliver a return for members by setting up an exhibit area or by putting an event in an area that needs the event," says Sind, "then that's the bottom line."*
Help from Uncle Sam The U.S. Department of Commerce (DOC) offers a program specifically to help U.S. show organizers who want to expand into Asia and other international destinations. The Trade Fair Certification Program was developed to promote exports of U.S. products abroad through trade fairs, whether they are organized by associations or independent companies. To qualify, a show must have taken place at least once previously, have a commitment from at least ten U.S. exhibiting companies, and have a U.S. office or agent.
The DOC certifies about 40 shows a year out of an application pool of 60 to 70, in general choosing shows with the highest potential for exports. Certified shows get various kinds of promotional support from the DOC, such as a certification logo and a listing in the National Trade Databank--an online database of world trade information. Other support includes market research data, access to a database of 35,000 companies for potential exhibitors, and some on-site exhibitor services.
Moreover, the DOC's National Trade Data Bank is an excellent resource for event organizers just starting to research prospects for taking an event outside the country. Updated monthly, the database details the quantity and value of all exports by country of origin. It is available by subscription on CD ROM (call (800) STAT-USA), and through the Internet (the Web address is http://www.stat-usa.gov).
For more information on the Trade Fair Certification Program, contact Department of Commerce, Room 2116, 14th and Constitution Avenue, N.W., Washington, DC 20230. Phone: (202) 482-2525. Fax: (202) 482-0872
Building Boom, Boom, Boom Across Asia new convention and exposition facilities have recently opened--or will in the near future. Currency devaluations have not slowed convention related development, say representatives from several of these countries.
For instance, Malaysia has had to halt work on several mega-projects, but none of them are convention or exposition related, reports Azizah Aziz, vice president of the Malaysia Tourism Promotion Board. One new Malaysian facility is the Mines Resort City just outside of Kuala Lumpur. It includes a conference center and an exhibition hall with 200,000 square feet of space. "Yes, our currency has been devalued 30 percent, but looking on the bright side you can say that we are 30 percent less expensive for visitors and event organizers," Aziz remarks.
Korea, too, has been hard hit by currency devaluations. But, says David Kim, spokesperson for the Korea National Tourism Organization, "It's important to remember that Korea, even with its currency problems, is still the 11th largest economy in the world." Construction of a new convention facility is proceeding in Seoul, he says.
The following is only a sample of new convention and exposition developments around Asia:
Hong Kong Hong Kong Convention & Exhibition Centre this year opened an expansion that doubled the facilities capacity with 689,000 square feet of function space in five exhibition halls and 52 meeting rooms.
Japan Tokyo International Forum opened in 1996 with 53,825 square feet of exhibit space and 34 breakout rooms.
Tokyo International Exhibition Center opened in 1996 with 860,800 square feet of exhibit space, 18 conference rooms, and a 18,292-square-foot reception hall.
Nagano Convention Complex, to be completed in 1998, will have 42,410 square feet of exhibition space.
Osaka International Convention Center, slotted for an opening in 2000, will have 28,482 square feet of exhibit space and 24 breakout rooms.
Makuhari Messe in metropolitan Tokyo's Chiba Prefecture added a hall in October, giving the facility a total of 774,720 square feet of exhibition space and 35 meeting rooms.
Korea A new convention center, with a theater-style seating capacity for 10,000 people, is under construction in Seoul. The facility is expected to be completed in 1999.
The long-term plans for the area surrounding the new Inchon International Airport, a mega-airport slotted to open in 2000 twenty miles west of Seoul, include plans for a convention center, hotels, marina, and Korean Folk Village.
Philippines World Trade Center Metro Manila, which recently opened with .5 acres of exhibition space, is operated by a franchise of the New Yorkbased World Trade Centers Association.
Singapore Singapore International Convention & Exhibition Centre opened in December 1996 and now has a total of 243,176 square feet of exhibit space and 29 meeting rooms.
Thailand Bangkok International Trade and Exhibition Centre opened in October with 215,000 square feet of exhibit space and 19 breakout rooms.