It Costs WHAT??? How Exhibiting Costs are Determined

Imagine you are in a restaurant on Tuesday evening, reviewing the wine list.  Yes – there it is – that great red you purchased at your local shop for $11.  Wait – can I be reading that right?  This place is charging $53?  On Wednesday, you are in a different restaurant, and you see the same wine, same vintage, same everything – and it’s $32. Thursday, in yet another restaurant, the same wine costs $79.   We all know this happens (which is why I love BYOB places) but really, why is that?  Why are those prices so different?  We know the restaurants are buying that wine for less than the retail price of $11…what can possibly go into a markup like that?  And why do we just accept it?

Now imagine exhibiting at many different shows across the country each year.  Your basic show costs - the line items in your exhibiting budget that ensure your exhibit is moved in, functional, and shipped out – can vary wildly depending on the event, the venue, and the city - in much the same way as that bottle of wine. Putting aside for a moment the obvious – for example, that hotels cost more in New York City than Wichita, KS. Why does this happen, or better, how can this happen?

It’s about the money.  Obviously, exhibiting companies are like all other companies; they are in business to make money.  They exhibit for a variety of reasons, all of which point to the bottom line.  When a company makes an exhibition investment, they expect a return, and along the way good value and service is expected.

Show organizers, be they for-profits or not-for-profits, are also in business to deliver cash flow and profits back to their organizations.   Along the way in the show cycle, they are liable for and pay out tremendous amounts of money in venue rental, food and beverage guarantees, hotel attrition clauses, labor costs, and attendance promotion campaigns.

Generally, exhibitors and sponsors provide the bulk of show organizer’s income.  This money comes to the organizer both directly, in the form of space rental and sponsorships, and, at certain shows, indirectly, through things like free or deeply discounted concessions from the general service contractor, and the hotels.

To a large extent, the prices that exhibitors are charged – not just for exhibit space, but also for things like hotels, drayage/material handling, cleaning, and electrical services – are determined by contract negotiations between the show organizer and the contracting entities – the hotel, the general service contractor, and other suppliers.  All of these companies are in business to make money also.

So how are an exhibitor’s costs determined?   How can you plan and budget when there are so many moving parts?  On August 2 from 9-10AM, at the Red Diamond Congress in Orlando at the Peabody Hotel (http://www.rdc2011.org), TSEA’s 2010 Show Manager of the Year, Mary Beth Rebedeau, President of The Rebedeau Group, will lead a discussion entitled “How are Exhibiting Costs and Prices Determined?”

During this session, a panel of experts will:

• outline how contracts between show organizers and general service contractors and hotels are negotiated
• review the negotiated items - both from the show organizer's perspective and the general services contractor's perspective - that affect exhibitor's costs
• examine what exhibitors can do to make sure they are receiving the best value for their exhibition investment

As long as a particular event, in a particular city, continues to deliver a good return on an exhibiting investment, chances are the exhibitor will be back again and again and again.  This session will provide insights and transparency – so that surprises are minimized and the exhibiting experience is good for everyone’s budget.

About the Author

Mary Beth Rebedeau is President of The Rebedeau Group.  A 25+ year veteran of the industry, she specializes in show management and production.  Visit http://wwwtherebedeaugroup.com, or e-mail her at mbr@therebedeaugroup.com.