GERMANY: Messen on the move - Expansion is still high on the agenda for the mighty German messen and that means some are setting their sights on organising shows at overseas venues. By Sharon Greaves

Few people would dare suggest that the history of the German trade

fair industry is anything other than long and illustrious given that it

is one of the leading service sectors in the German economy. The

country's 23 messen generate an annual turnover of about DM4.8bn (£1.5bn).



Hanover is home to the 425,000 sq m Deutsche Messe - the largest

exhibition centre in the world. Snapping at its heels is Milan, but then

comes a string of German successors - Frankfurt, Cologne and Dusseldorf,

making Germany home to four of the world's five largest exhibition

centres. Harald Koetter, spokesman for German trade fair association

AUMA thinks the offering in other countries is paltry by comparison.



"Other countries have only one or two large exhibition centres," he

remarks.



"France has just two in Paris, the UK has 200,000 sq m in Birmingham and

a centre in London now, but that is all. In Germany there is national

competition so all the centres have very high standards."



Such is the pull of the messen and their ability to handle large events

that most of the shows have international relevance. The 23 German

complexes attract 10m visitors every year, nearly 20% of whom come from

outside Germany, while out of the 170,000 exhibitors almost 50% are from

abroad.



Moreover, most venues are ideally located close to the city centre, with

a good range of accommodation and attractions within striking

distance.



Renowned for culture



Messe Hamburg benefits from its proximity to the city's harbour area,

which is home to music festivities, shopping malls and the Alster lake,

plus up to 10,000 beds in internationally branded hotels such as

Radisson SAS and Hyatt Hotels. Dresden, as the wealthiest city in the

former East German republic, is renowned for its culture with the

reconstruction of the 'Frauenkirche' perhaps its most popular icon.

Again, local hotels, among them the Dresden Hilton, Westin Bellevue and

Radisson SAS, bear an international flavour. Munich, too, is well served

with hotels and visitor attractions.



The industry is in bullish mood and continues to stamp its presence on

the international events arena with venues reporting record years and a

record tally of events. But behind this polished veneer of success,

however, the omens do not look quite as good.



The peculiar manner in which German shows are organised - events are run

by the venues rather than by business entrepreneurs - means that, in

truth, the industry operates as a closed shop. That fact, combined with

the harsh reality of a wavering economic climate, particularly in east

Germany where investment and unemployment is high, has all the makings

of a potential slowdown.



Messe Dresden marketing director Tobias Blaurock says: "The key issue

for German venues is whether the sites can keep their status as mostly

non privately-owned companies. The public nature of ownership means they

are not as flexible as they could be and therefore have trouble

expanding globally.



"We are under increased pressure to make an operating profit. Using

messen as an instrument for local business development is still a valid

argument for public investment, but the public also wants to see a

bigger pay-off in the development of our companies."



Period of consolidation



Perhaps for that reason the messen are looking to consolidate their

strengths and to chase new markets and opportunities more vigorously.

Several are pushing through expansion projects. The ageing trade

fairground at Messe Stuttgart is making way for a larger exhibition

centre village adjacent to Stuttgart airport, which is scheduled to open

in 2005/2006. Messe Frankfurt has just added 40,000 sq m, Nuremburg is

adding 20,000 sq m to its 140,000 sq m and Messe Hamburg will start work

on four new halls in 2003 to create an extra 30,000 sq m.



Messe Hamburg marketing consultant for foreign markets Tarik Cavuz says:

"Our problem is one of space. We are at the point where optimum capacity

is being reached on trade fairs such as the Hamburg International Boat

exhibition and shipbuilding trade fair SMM."



In addition to bricks and mortar developments, many messen are looking

to step up their marketing. "There is now an excessive offer of

exhibition space and organisations are fighting for new shows by trying

to convince some industries to change their venues from one city to

another," says HBM director of German operations Rolf Muller-Martin.



For the poorer venues in the east it is a case of first attracting

national business. Messe Dresden's new site, a former early 20th century

industrial complex, was completed in February 2001, and marketing chief

Blaurock is keen to widen the venue's pull. "The new facilities offer

promising perspectives," he says.



Nurturing business which has the right emotional fit with the city has

led to the introduction of the Internationales Kultfahrzeugtreffen, a

show for old and new vehicles, and the messe is looking to attract

out-of town-visitors to its show about life in Saxony as well as music

trade fair Sound.



A question of time



Leipziger Messe had a stable year in 2000 and it also found time to beef

up its customer service and market research departments, expand its

marketing services and reorganise its network of agencies abroad to help

it capture more business. Even so, a Leipziger Messe spokesman

acknowledges that it could be five to ten years before the complex, a

five-year-old futuristic ensemble of steel and glass, really gets a

foothold on the international trade fair ladder. "Because of the economy

in eastern Germany we do not have the success that we should have. It is

a question of time," he says.



Other messen are keen to spot trends and break into new markets. Messe

Stuttgart pursues a niche policy. In 2000 it launched trade fairs in

three sectors: the investment sector, life science industries and a

fashion fair. For 2001 and 2002 it has new markets in its sights with

the launch of a large-scale classic car fair, Retro Classica. In January

2002 it will be holding Kids 1st, the first international trade fair for

children's clothing.



Messe Berlin is adopting a similar approach this year with the launch of

Build IT, a trade fair for IT and communication in the building

industry.



And in 2002 the complex launches HomeTech, an international trade fair

for household appliances. The number of guest events, where outsiders

are invited in to organise shows, is constantly increasing too.



The better-off venues in the south are still largely closed to overseas

organisers and investors, so their strategy turns on their ability to

invest outside Germany, especially in the emerging markets of eastern

Europe, Asia and South America. "A few messen have founded their own

shows in other countries to beat foreign show organisers in their own

country," says HBM's Muller-Martin. "Messe Frankfurt successfully

implemented the Home Textile Fair in Moscow and Miami, the Intestoff in

Hong Kong and the International Trade Fair for Sports Equipment in

Singapore."



The pace of overseas activities is quickening. Messe Hamburg is moving

towards an even larger foreign trade fair programme. This includes

official German participation in 11 events under the auspices of the

German economics ministry, which has commissioned the venue to organise

official German involvement in international shows such as the

shipbuilding and shipping fairs in St Petersburg, South Korea and

Shanghai.



New levels of cooperation



In view of increasingly fierce competition, other trade fair companies

are engaging in new levels of cooperation, not only to flag themselves

more boldly but to cut marketing costs. Although Messe Stuttgart's

failed to get its dual marketing alliance with Vienna Conference Centre

off the ground, the German centre is turning its attention to its other

alliances with Leipzig and Hamburg. The aim is to get foreign exhibitors

and attract foreign visitors to the international trade fairs in all

three cities.



Meanwhile, the joint venture between Munich, Dusseldorf and Hanover and

a Chinese organisation to build and manage an exhibition centre in

Pudong, Shanghai, (Marketing Event, March 2000) is nearing fruition. The

facility is due to open this November from where the trio of German

facilities will launch new events.



CASE STUDY: EUROPAY



The fifth bi-annual Europay Members Forum (EMF) was held at the

International Congress Messe (ICM) in Munich, Germany on 6 to 8

June.



Payments organisation Europay International, in association with

MasterCard International, invited 1,100 senior bankers and payments

industry decision-makers to discuss the future of the payment card

business.



The three-day programme, which was designed and run by Jack Morton,

encouraged discussion and networking by placing more than one-third of

the programme within EMF Expo, which comprised two halls of 100

exhibitors which took 2,500 sq m of space in total.



Jack Morton account director Rupert Evans says: "The ICM is several

miles outside Munich, which is where most of the accommodation is. We

were kept busy ensuring hospitality desks were available in each of the

seven hotels, as well as arranging a 56-bus travel schedule, gala dinner

and airport transfers for 1,100 people."



Jack Morton gave each day a specific focus. Day one was on

business-to-consumer issues, with m-commerce (using mobile phones as a

sales tool) the subject of day two. Day three involved workshops.



The EMF has taken place in Switzerland, Norway, Spain and France, but

these events did not have consistent branding.



"Our thinking was to produce a design for the brand with longevity and

versatility in the way in which it could be applied across all areas of

the event," Evans says.



MESSEN AT A GLANCE



Messe Dresden Exhibition area: 18,000 sq m roofed area divided into four

multi-functional halls, plus 13,500 sq m outdoor space



Ranking: 20



Strategy: Opens up to overseas exhibitors, but only has offices in the

Czech Republic and, more recently, Poland. The first focus is on

maintaining local links and developing national business which has the

right emotional fit with the city and the site Messe Hamburg Exhibition

area: 68,000 sq m, to increase to 98,000 sq m over the next few years,

as well as 8,500 sq m outdoor space



Ranking: 10



Strategy: Strengthening its foreign trade fair activities, predominantly

in the maritime sector, by organising official German involvement in

high profile international shows on behalf of the German economics

ministry



Messe Berlin Exhibition area: 160,000 sq m hall space



Ranking: 5



Strategy: Alliance with Reed Exhibition Companies to establish trade

fairs in Berlin and develop tourism trade fairs in regions of the world

where suitable demand exists



Leipziger Messe



Exhibition area: 102,500 sq m indoor space, plus 30,000 sq m

outdoors



Ranking: 8



Strategy: Expanded marketing services for exhibitors and visitors and

reorganising its network of agencies abroad to capture more business



OPINION



Stephen Brooks, chairman of Mack Brooks Exhibitions "The German

exhibition centres are among the best in the world. They provide the

latest infrastructure and are at the geographical heart of Europe and

the EC. Germany is also at the heart of major industries. It has, after

all, the largest economy in Europe and the third largest in the world.

Most German venues are state-owned and are operated as part of the

infrastructure of the city. This creates a particular outlook and

philosophy. Many German halls are working abroad but activities in

Europe are seen as clashing with the German exhibition market so they

are having to look outside Europe, particularly to Asia. The slowdown in

general economic activity is a real concern for the future. The

exhibition market is also very mature in Germany which makes

establishing new event opportunities a very big challenge for the

venues."



CASE STUDY: MESSE BERLIN



Messe Berlin completed its expansion in early 1999, giving it 160,000 sq

m of hall space. Since then the complex has been working to develop its

presence at home and abroad. In May, the ITB became the venue's first

virtual trade fair, augmenting the services at the real fair and

providing an on-line forum. By 2002 all the complex's own events will be

accessible on the Internet as virtual trade fairs.



Last autumn Messe Berlin entered into a strategic alliance with Reed

Exhibition Companies (REC) to develop new events in Berlin and tourism

trade fairs worldwide.



A jointly owned subsidiary is developing at least five fairs in Berlin

under the name Messe Berlin Reed.



REC chief executive of Germany and Switzerland Urs Ingold says: "We have

established relationships with Dusseldorf, Frankfurt and Nuremburg and

we already have a strong form of cooperation with Essen. We are very

interested in additional alliances and cooperations, but this is the

first proper alliance between Reed and a German fairground. Berlin is

the place for all kinds of shows in the area of the servicing

industries. We are launching a show about money and one that is similar

to our events in Zurich and London called NewKomm, focusing on all

aspects of communication."



In the tourism sector, ITB in Berlin and the World Travel Market in

London - the world's two biggest travel shows - will be jointly

promoted. Relevant information held on databases will be exchanged. The

two companies have also agreed to work together to develop tourism fairs

around the world to create a powerful global brand.




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