The trade fair industry is experiencing a slump of around 70 percent

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For Oliver Frese, the turn of the year was synonymous with an anniversary.

The 53-year-old will now be responsible for one year as COO at Kölnmesse, i.e. as the operational managing director of the Rhinelander's event portfolio.

However, Frese only knows most of the industry shows entrusted to him from theory.

Because due to the Corona crisis, no trade fair has taken place on the site directly on the Rhine since March 2020.

The Cologne company's consolidated balance sheet is correspondingly battered.

At other trade fair locations, however, the situation is at least as bad as the preliminary annual figures from the AUMA industry association show.

According to this, the domestic trade fair industry will post sales of around 1.2 billion euros in 2020, 70 percent less than originally planned.

But no wonder: of the 355 international, national and regional trade fairs in Germany, only 114 could take place due to bans and travel restrictions according to AUMA.

4.3 million visitors and 70,000 exhibitors were registered on a rented stand area of ​​almost 2.5 million square meters.

By way of comparison: the previous events of the trade fairs planned for 2020 came to 15.6 million visitors and 248,000 exhibitors, the stand area in turn totaled almost nine million square meters.

More than 100,000 jobs at risk

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This massive slump is also having an impact on a number of other industries, above all the hotel and catering industry, logisticians, freight forwarders and craftsmen, but also airlines and taxis or local retailers.

After all, according to calculations by the Munich Ifo Institute, the trade fair industry has economic effects of around 28 billion euros annually.

In 2020, the value of this so-called indirect return will be reduced to just six billion euros.

"If this development even remotely continues in 2021, more than 100,000 jobs in the affected industries are likely to be at risk," warns AUMA Managing Director Jörn Holtmeier.

To classify: According to the Ifo study, the trade fair industry directly and indirectly secures around 230,000 jobs across Germany.

That shows again the dimension of the current crisis.

The exhibition companies themselves are already planning with worst-case scenarios.

This is why austerity programs have long been in place, some with massive job cuts.

In some places, the shareholders also have to help out with loans and guarantees worth millions.

Because the business remains idle.

And that at a time when a number of major events and leading international trade fairs are on the agenda.

Trade fairs canceled or postponed again

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In Nuremberg, for example, the International Toy Fair should have taken place these days, the CMT travel and tourism show in Stuttgart, the Ispo sporting goods platform in Munich and the ISM confectionery fair in Cologne.

"Normally we would now walk through the halls and take a look at the innovations in the industry," says Kölnmesse Managing Director Frese wistfully.

It will take some time until the next tour of this kind.

Because Frese also knows that nothing has been normal in the industry for months and will probably not become normal for many more months.

In any case, the people of Cologne have meanwhile postponed the Art Cologne art fair planned for mid-April, this time to autumn 2021.

Around 40 kilometers up the Rhine in Düsseldorf, the local trade fair company canceled the boat that had previously been pushed from January to April.

And the Hanover Fair, scheduled for shortly after Easter, will only take place digitally.

The Leipziger Messe no longer even believes in events in May and has therefore recently canceled the book fair.

Formulate framework conditions for a new start early

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And industry leader Messe Frankfurt has meanwhile cleared the calendar in the spring.

"Given the current situation, we cannot meet our customers' expectations with regard to internationally oriented trade fairs in April and May," explains Detlef Braun, Managing Director of Messe Frankfurt.

The industry had big plans for 2021. AUMA reports that 380 trade fairs should take place in this country.

But 110 of them have already been canceled or postponed to 2022.

And the number is increasing almost every day.

Association boss Holtmeier therefore demands foresighted action and a perspective for the starving organizers: "Due to the long lead times for holding a trade fair, politics should begin as early as possible to formulate reliable framework conditions based on the previous regulations for the trade fair restart."

Real presentation of products required

The industry has finally proven that trade fairs can also work in pandemic times.

In any case, in September there had been a good dozen shows with a strict safety and hygiene concept, including the Caravan Salon in Düsseldorf or the Nordstil in Hamburg.

Elsewhere, on the other hand, trade fairs were temporarily banned by the authorities, even after they had already been set up in the halls.

Meanwhile, there is a need for trade fairs.

Especially the medium-sized economy urgently needs its real industry platforms for the presentation of new products and the acquisition of new customers, it is said by business associations and also by companies.

"Our customers tell us very clearly: We need a trade fair, we want to see, touch and experience products in real life again," reports designer Detlef Klatt, founder of Klatt Objects.

Driving force for export

The export function of trade fairs is emphasized again and again.

"Up to 20 percent of German exports are induced by participation in trade fairs," says the trade association for trade fairs and exhibitions (FAMA).

"Trade fairs are a driving force behind German foreign trade, especially for medium-sized companies."

There are many digital replacements.

However, these events have so far hardly been convincing, shows a joint survey by the Association of German Mechanical and Plant Engineering (VDMA), the Central Association of the Electrical and Electronics Industry (ZVEI) and the Medical Technology Association Spectaris in cooperation with AUMA from last November, i.e. after several months Experience with the digital twins.

Digital events offer no alternative

At least 21 percent of the 427 companies surveyed consider digital events to be a serious alternative to real trade fairs over the long term.

The rest either reject the virtual meetings completely or want to go two ways at most.

"Behind this is the concrete experience that business success at physical trade fairs is significantly better," explains Kölnmesse manager Frese.

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According to the survey, the success rate of digital events is on average around a quarter of the benefit of a real trade fair participation.

30 percent would have achieved a maximum of ten percent, while peak values ​​of 70 percent and more were achieved by only three percent of the companies surveyed.

"The relatively little experience of those involved with digital business events to date certainly plays a role here," says AUMA Managing Director Holtmeier.

Nevertheless, the physical presence of people and products obviously makes the difference in business success.

Frese deduces from this that trade fairs will continue to be justified in the future.

"Local trade fairs still have a future," said the manager on the sidelines of the confectionary industry's balance sheet.

Nevertheless, it is clear that events have to change.

"Selling square meters is no longer enough in the future," announces Frese.

From his point of view, hybrid formats with a trade fair in the halls and additional formats on the Internet are becoming standard.

"In doing so, even more adventure worlds must be created on site."

Private organizers particularly affected

However, it is questionable whether all trade fair organizers will still be able to create such worlds of experience.

Part of the industry is organized under public law.

Above all the big companies like the trade fairs in Frankfurt, Munich, Berlin, Hanover, Cologne, Düsseldorf, Hamburg, Nuremberg, Stuttgart or also in Leipzig, Essen and Friedrichshafen belong to the respective cities and / or federal states.

But there are also a number of private and owner-managed trade fair organizers.

And some of them are threatened with extinction, fears FAMA executive chairman Henning Könicke.

In contrast to the public law companies, which receive liquidity aid from state and municipal funds to compensate for losses, private exhibition companies have not yet had these funds available.

"Nationwide, however, they make up almost a quarter of the trade fair program in Germany."

The EU rescue package has only limited effect

The competition guardians of the European Union (EU) recently approved a 642 million euro rescue package for the German trade fair and congress industry.

Companies with lost profits between March and December 2020 due to corona restrictions should benefit, according to the EU Commission from Brussels.

Refunds are apparently only given if the authorities have banned events, but not if the trade fair company itself canceled an industry show because it was foreseeable that neither enough exhibitors nor enough visitors would come.

In addition, the aid only applies to the operators of the infrastructure.

Private providers without their own exhibition grounds will continue to receive nothing.

If they disappear from the market, this also affects the site operators, explains Michael Kynast, the managing director of the state-owned Messe Erfurt: "Only if the private exhibition companies are also considered within the framework of an industry-appropriate protective umbrella can small, medium-sized and large exhibition centers in Germany get old again Return effectiveness and provide exhibition halls as well as hotels and regional trade and craft with the urgently needed demand effects. "