In his latest feature, EN guest editor Phil Soar says that one cannot predict world events, be it a bullet 12 inches to the right, or an industry’s rapid evolution. An organiser must be prepared and, above all else, never believe they know what is going to happen…
In response to the headline, no, it wasn’t Neville Chamberlain, nor Hermann Goering, nor even Adolf Hitler. It was one Colin Thornton-Kemsley, the 35-year-old treasurer of the Essex Area of the Conservative and Unionist Party and a man of little distinction.
Winston Churchill was, at the time of the Munich agreement in 1938, MP for Epping (in Essex) and Thornton-Kemsley’s objective was to have him de-selected and forced to resign. Kemsley objected to Churchill’s anti-appeasement, anti-Hitler views. Thornton-Kemsley was a devoted Chamberlain loyalist.
For those who don’t follow the politics of the 1930s, Chamberlain was the then prime minister who had signed the Munich agreement and handed most of Czechoslovakia to Hitler. In a long, complex campaign in late 1938, Kemsley packed the local Epping branches with new members and tried to force a de-selection vote to have Churchill replaced as the local MP. Churchill spoke regularly and passionately in the constituency and refused to back down.
After much-heated debate, a committee vote was taken. Churchill won by just one vote. Had Churchill lost he would have stood down and fought a by-election as an independent. And a new Conservative candidate would probably have beaten him. Hence Churchill would not have been in the House of Commons and thus could not have become Prime Minister in 1940.
On one single vote the future of the world turned
So, on that one vote in Essex, it is quite possible that the future of the world turned.
I mention this story because it illustrates the astonishing unpredictability of small things, how very unlikely happenings can up-end so much and how we just cannot see them coming. In very recent times, David Cameron’s suicidal decision to call a Brexit vote in 2016, and the mutation which created Covid-19 are but two examples.
Going back to the twists and turns of the 1939 War. When Hitler led the Nazi Party 1923 Beer Hall Putsch in Munich, his 2,000 marchers were fired on by the police. The man marching to the right of Hitler was killed, the man to his left was killed. Hitler escaped unhurt and was arrested. Twelve inches in either direction…
In our own quiet, small corner of the world, we can point to similar examples of the completely unexpected. Had you been a large Private Equity house investing in exhibitions in 2009 you might have thought acquiring The Motor Show, The London Boat Show, IPEX, Interiors, InterBuild, National Boat and Caravan (indeed both Caravan shows), and the Clothes Show would have been wise. You know what is coming. They were eight of the largest 15 shows in the UK. Eight years later they did not exist.
How random events can change the trade show world
In 1992 – a long time ago I know but stay with me – we at Blenheim were in awe of Which Computer? which totally dominated the IT space in the UK. But within three years it had disappeared – an unpredictable consequence of PCs and laptops rapidly becoming commoditised and brand names no longer mattering very much. Las Vegas’s Comdex was a similar and more familiar story – as late as 1999 it was the largest exhibition in the world, with attendances in excess of 200,000 and a turnover of over $100m. In 1994 Blenheim held discussions with Shelley Adelson, owner of Comdex. We would merge, he would take 33% of Blenheim shares (in effect controlling Blenheim) and Blenheim would add north of $50m to its profits. Happily, for Blenheim, it didn’t happen.
In 2000 IBM, Apple, Compaq and HP pulled out of Comdex. IT had become decentralised in the move from mainframes to networks of PCs. Comdex declined dramatically. In January 2003, Key3Media, which had bought Comdex, defaulted on loan payments and the majority of their shares were disposed of for just $1. In effect, bankruptcy. Comdex never ran again – less than four years after being the biggest show in the world. One can tell a similar story about CeBiT in Hannover – which once had over 400,000 visitors.
How even 9/11 shook our world
Businesses which appear to be dominant can disappear remarkably quickly. Blenheim was the biggest organiser in the world in 1994. Within three years its assets had been distributed among UBM, VNU and Reed (Reed got the best bits). EMAP was the biggest player in the UK as late as 2008 – now it is just a distant memory. In 2012 UBM/Informa together had five of the biggest 20 shows in the UK – if IFSEC does not bounce back dramatically in 2022, they will have none.
And dramatic global events can also put paid to the best laid plans. Successful UK organiser Richmond Events moved into the US, invested heavily, and was planning its first two big Ocean Liner operated events in the USA, both sailing from New York Harbor one morning. The date – 11 September 2001. The very first DSEi (the biggest multi-force defence show in the world) opened in ExCeL on the same morning – by 3pm the halls were empty.
The pluses and minuses of unlikely currency movements
In the early part of the 21st Century, Turkey was a very popular market for UK based groups to expand into. The currency was reasonably stable and 1.5 Turkish Lira would buy you a Dollar. But then the politics and economic policies of president Erdogan began to take a toll on the currency, particularly after the anti-government riots of 2013. The Lira suffered a slow but unstoppable decline, and it will currently cost you 9.5 Lira to buy a single Dollar. In the past 10 years the Turkish Lira has declined at an average (and accelerating) rate of 20% each year.
There is no easy way of dealing with this – a rapidly depreciating currency when you are in a business which only cycles round once in 12 months (limiting the opportunity for price change) is a nightmare. The reverse can also be true. Blenheim’s annual profits rose from £3m in 1988 to £50m in 1993. These numbers were real, but we were helped by the steady decline in the pound and the dramatic effect of Black Wednesday in 1992.
Sterling fell against the dollar from $1.85 to $1.49 in that five-year period – as it did against the DM and the Franc. So, as Blenheim’s portfolio became less and less UK-based, foreign currency profits in sterling jumped. A US event making $1m in 1988 was worth £552,000 to Blenheim’s profits. Even if that event did not grow at all, by 1993 Blenheim was reporting a profit on the show of £671,000 – a magical 22% improvement. To be fair, Blenheim should be complimented for seeking to generate its profits in other currencies – a trend which has taken hold ever since. Had Covid not intervened we might be seeing a similar pattern.
Indeed, the period 2016 to 2024 will almost certainly see a gradual enhancement of the profits of trade show groups which report in sterling – over that period the effect of Brexit and the already evident decline in GDP (4% so far according to the independent OBR) will depress the pound to the benefit of sterling reported profits.
The lucky breaks which can come from random events
Of course, utterly random events can also lead to very lucky outcomes.
EMAP, which already owned Spring Fair, decided in 1990 to launch an Autumn Fair to try to take on the Harrogate Gift Fair – then the dominant Gift show in the second half of the year. EMAP even launched their first Autumn Fair to run on the very same day as Harrogate. What random event then occurred? The Harrogate Exhibition Centre burned down on the night before the show ran – giving a massive boost to the brand-new Autumn Fair (fortunately no one was injured). It was impossible to sell exhibitors into Harrogate for the next year as no-one knew whether the exhibition halls would ever be rebuilt, though Stephen Richards and Carsten Holm did a superb job saving the event (confession: I had to address 2,500 exhibitors who had lost most of their stock on what we were going to do next).
CloserStill was enormously fortunate to launch at the nadir of the 2008-2009 economic crisis – proof as if ever needed that the time to invest is when there is blood in the streets.
I apologise to younger readers that few of these examples are contemporary. Partially this is because one often needs the sweep of history to see things clearly. There are, though, several current examples I might quote – but to protect the guilty, and allow time to prove or disprove my assumptions, I shall remain silent.
So the lessons of all this?
Firstly, never believe that you know what is going to happen. You don’t. You can be prudent (don’t put all your eggs in one basket) but you cannot eliminate random events.
Secondly, some sectors are safer than others. Massive technological change is a great boost to trade show companies – it creates the opportunity for launches and new stories. But it can also outflank you. Penton paid $100m for Streaming Media in 2000. Said Thomas L. Kemp, Penton’s CEO who spent the $100m: “Streaming Media’s products will further strengthen Penton’s media leadership position in the internet/broadband sector.”
The market outflanked Penton, streaming changed fast and became commoditised. Penton never ran the show again; $100m down the drain and Penton eventually went bankrupt.
Thirdly, avoid obvious flaws: if your shows depend completely on four or five exhibitors, like the Caravan shows, or on key names – like Microsoft or Google – don’t assume permanence. If you have one key employee who really understands their marketplace – pay them whatever it costs. You cannot afford to lose them (not least because they are likely to set up against you).
Fourthly, don’t assume you own the IP. Organisers assume this just as the sun rises in the East. But many shows have a natural home, and the organiser isn’t always the boss. Interiors proved that. Other examples might be Spring Fair, which cannot really run away from the NEC, the Harrogate Fairs, and DSEi, the biggest show by revenue in the UK in 2019, which can only run in ExCeL, whatever Sadiq Khan might think. Because the Messen own the big shows in Germany and Italy, this is rarely an issue elsewhere in Europe.
Fifthly, don’t do anything stupid. We all have our examples, and many involve moving a show from one venue to another for short term gain.
Sixthly, and above all else, remember that your success is largely about luck. Yes, you must work hard and apply intellectual rigour – but the moment you start thinking that you really are quite clever to have achieved what you have achieved – then you are soon likely to be in deep, deep trouble.