Recession worries trade show execs; Reed looks to buy events in U.S.

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Trade show executives are worried about how they’re going to generate revenue this year. Only 7% of event industry CEOs are feeling “better” about 2009 compared with 2008, and 63% are feeling “worse,” according to the 2009 Exhibition and Conference Industry Outlook, an online survey of 126 executives conducted by Jordan, Edmiston Group and Tradeshow Week in December.

Most respondents (57%) said they anticipated that their company’s revenue would be flat or decline this year. At the same time, most respondents (30%) who did foresee some revenue growth anticipated only modest improvement of 5% or less.

Ninety-two percent of respondents said the biggest challenge to the event business this year will be the overall economy. Sixty-seven percent said shrinking travel budgets would be among the biggest challenges facing the events industry, and 64% said declines in marketing budgets would also pose a big challenge.

“There will be some casualties from this recession, but by and large I expect the trade show industry to emerge stronger than it went in,” said Richard Mead, managing director of Jordan, Edmiston.

In anticipation of revenue declines, 31% of executives said that their primary strategic goal for this year was “cost reviews.” The executives, however, are still searching for ways to generate growth.

Twenty-eight percent said the best option for growth over the next two years would be launching new events; 45% said conferences and seminars were the events they were most likely to launch this year.

“The senior managers, the respondents to this survey, clearly are highly engaged in looking at their businesses and figuring out how they need to evolve,” Mead said. “They not only need to address the recession, but they also need to do this to be in a better position so they can come out of this on a growth curve.”

While event executives appear pessimistic about revenue growth, the majority (63%) of those surveyed described the North American mergers and acquisition market as "good." However, 69% said they were “not very likely” to acquire an event this year. Similarly, 82% said they were “not very likely” to sell an event this year.

Overall, 69% of respondents said they are holding back on M&A activity until the visibility in the market improves, and the gap between the valuation expectations of buyers and sellers narrows.

There is, however, at least one company looking to acquire. Reed Exhibitions has its eye on trade shows in the U.S., said Mike Rusbridge, chairman-CEO of Reed Elsevier's $1.4 billion trade show arm, at Thursday's DeSilva & Phillips Media Dealmakers Summit in New York.

Even at its size, Reed Exhibitions controls just 5% of the worldwide exhibitions market. "It's a highly fragmented market," Rusbridge said. He noted that Reed Exhibitions had 20% of its business in the U.S., a percentage he described as "underweight."

"We're already looking for more deals in the U.S. to bolster that," Rusbridge said. Through acquisitions and organic growth focused in the U.S., Brazil, Russia, India, China and the Middle East, Rusbridge said he hopes to double Reed Exhibition's market share in the trade show sector.

“Now is great time to be looking for acquisitions,” Mead said. “There will be opportunities if you have the capital.”

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