In a 12 months of No Commerce Gala’s, Germany Takes It Laborious
The funeral directors have to wait for their big meeting. So do the toy manufacturers, the riders and the vegans.
All of these and many other groups had planned trade fairs in Germany over the past few months. But these rituals of business life, an opportunity for people to do business, review the competition and communicate with others in the same area of life, are in crisis.
The mass cancellation of trade fairs was a disaster for hotels, restaurants and taxi drivers all over the world, but especially in Germany. The country has four of the ten largest trading centers in the world, more than any other country.
Trade fairs have played a central role in German economic life at least since the Middle Ages, when merchants gathered in cities like Leipzig to trade wine, furs, grain and gossip. The first Hanover Fair in 1947, a showcase for machine tools and other industrial goods, was seen as a turning point in the economic revival of Germany after the Second World War. The fair attracted more than 700,000 potential customers from all over the world and helped to reconnect Germany with the international economy.
The pandemic forced the organizers to scrape this year’s Hannover Messe as well as dozens of smaller events such as VeggieWorld in Munich, the International Toy Fair in Nuremberg and Horse & Hunt in Hanover.
According to the research institute Ifo in Munich, trade fairs generate sales of 28 billion euros or 33 billion US dollars for German convention centers, hotels, restaurants, airlines and various service providers in a good year.
These revenues have largely evaporated, and there have been additional losses that cannot be quantified: the orders were never taken, the partnerships were never made, the new connections were never made.
“They are a shop window,” said Jan Lorch, Sales Manager at Vaude, a German manufacturer of outdoor equipment and clothing that would normally have been represented at the ISPO trade fair for the sports industry in Munich and the Eurobike trade fair for the bicycle industry in Friedrichshafen . Germany.
Mr. Lorch said the trade shows are not just a way to meet retailers, they are also an opportunity to learn about topics like the latest in supply chain software. “You meet a lot of people in a short time,” he said. “You learn things that you would not otherwise have known about.”
Conventions are an underestimated engine of economic growth worldwide, responsible for around 1.3 million jobs. According to the Global Association of the Exhibition Industry in Paris, trade shows had sales of $ 137 billion in 2018, as did General Motors.
However, sales this year fell by two-thirds after events like the Mobile World Congress (which attracted more than 100,000 visitors in 2019) in Barcelona, Spain, or the North American International Auto Show in Detroit (which attracted more than 750,000 visitors attracted) were canceled).
Some trade shows went online when the pandemic made live meetings no longer advisable. After the cancellation of Life and Death, a funeral industry event that usually takes place in Freiburg, the organizers turned to the Internet. You have livestreamed presentations on topics such as “Fear of dying” and “Funeral preparation: Which shoes for the last trip?”.
However, virtual events don’t fill hotels or restaurants and provide no work for the carpenters who build the often elaborate corporate displays that can easily cost as much as a house.
“Many companies are on the verge of bankruptcy,” said Jan Kalbfleisch, managing director of FAMAB, an organization that represents companies that design displays, caterers and other service providers. Government aid programs for small businesses, he said, “help when your sales are 30 percent lower, but not when they are 80 percent lower.”
There are already signs that the pandemic may leave permanent scars on the exhibition industry even after a vaccine becomes available. The Geneva Motor Show was canceled at the last minute in March, and organizers have already canceled the event next year. The future of the show, which was once a major event on the auto industry’s calendar, is uncertain, in part because automakers have questioned whether the shows are worth the substantial cost, which can cost millions of dollars to large automakers.
The major concern of the exhibition industry is that companies will find that they can do without exhibitions. As anyone who has ever participated in one knows, they can wear out grueling speed dating marathons for businesses that are low on sleep and high in alcohol and bad food.
“There is too much drinking. They live on coffee and roasted paninis, ”said Kristof Magnusson, a novelist who regularly works at the Frankfurt Book Fair, the most important event in the publishing industry. “After that everyone is sick.”
A survey by the Ifo Institute showed that almost half of German companies with at least 500 employees would like to reduce spending on trade fairs and hold more online meetings. Horst Penzkofer, economist at the institute, said, however, that trade fairs are still important for smaller companies that could not afford international sales force.
Nikolaj Schnoor, managing director of Danish eyewear maker Lindberg, said the company held online presentations to showcase its latest designs after almost all industry trade shows in the US, Europe and Asia were canceled. But he said he hoped they would be readmitted again soon.
“For small and medium-sized companies, they are a window to the world,” said Schnoor. “I would be sad if we didn’t have it.”
The German authorities allowed trade fairs to be held for most of the year when organizers limited the number of visitors and took other measures to avoid contagion. However, most events have been canceled due to travel restrictions that discouraged overseas visitors. Many exhibitors did not want to spend money preparing for events that could be canceled at the last minute, which they did in several cases.
The latest blocking restrictions in Germany, which came into force on November 1st and will last until December, include an almost complete ban on trade fairs, much to the dismay of the industry. There was at least one exception – a trade fair in Erfurt called Pro.vention. Companies that make disinfectants, air purifiers and other products to help deal with the pandemic were featured.
These are exactly the companies that need trade fairs to find a market for new products, said Michael Kynast, Managing Director of Messe Erfurt, the city’s exhibition center. (“Messe” is the German word for “Messe”.)
“There are companies that generate 80 percent of their sales from trade shows,” said Kynast.
It is unclear when business people will be able to crowd at trade fairs again. Messe Frankfurt, whose dozen exhibition halls with an area of 400,000 square meters are the third largest exhibition center in the world after the Hanover Fair and the National Exhibition and Congress Center in Shanghai, has canceled all events until March. Even if the restrictions are lifted, exhibitors don’t want to commit to events without knowing when the pandemic will be over.
The Frankfurt Book Fair, which attracted 300,000 visitors last year, could give a foretaste of how trade fairs work. The event, which usually takes place in October, dates back to the 14th century, shortly after Johannes Gutenberg, who came from nearby Mainz, invented the movable type and made the mass production of books possible.
This year, plans to allow a limited number of visitors had to be abandoned after a second wave of the coronavirus hit Germany. Instead, book fair organizers set up online platforms for attendees to do business and find partners, and ran a full program of online readings, panels and lectures.
Mr Magnusson attended a similar event at the German National Library in Frankfurt that reminded him why he likes masses despite a hangover and sleep deprivation.
Mr Magnusson, who was promoting his latest novel, A Man of Art, appeared in front of a lively, socially distant audience with Wladimir Klitschko, a former heavyweight boxing champion who promotes a motivational book, and Eva von Redecker, a philosopher who argues that capitalism is in the final stages of its decline.
“You get the full range of the literary world,” said Mr Magnusson. “It’s a great way to get out of your bladder.”