Uncontested market leader
Reed Exhibitions is the prime mover at Austria's two most important exhibition venues, Salzburg and Vienna.
One fact is clear and needs little explanation. Reed Exhibitions is the leading organiser and has a firm grip on Austria's trade fair business. Have the British changed Austria's exhibition environment? To answer that question, let's look at what it was like before.
Before there was Arnold Henhapl and his company Salzburger Contactfachmessen. Henhapl is the father of Austria's trade fair environment. He recognised their importance at a time when the locations Vienna, Graz and Wels were fighting for the title "largest exhibition in Austria". In today's classification, these were clearly multi-sector trade fairs that were held in the autumn or the spring and attended by a broad public of around a million visitors (at least those were the figures boasted by trade fair presidents). This was the market into which Henhapl introduced his trade fair concept. Over the years he perfected his product before finding a buyer in 1992 in the shape of Reed International. And they had it made. Reed started from the pole position and thanked Henhapl generously.
That was the first lesson that the Reed managers under their long-time boss Johann Jungreithmair taught Austrian exhibition organisers: trade fairs are a tradable product. The idea took on. Wolfgang Neumann, now the organiser of the World Energy Globe Award, sold the highly regarded energy saving exhibition to Wels, and the Viennese specialist niche producer Jirasko sold almost its entire portfolio to the British over the years. Reed had demonstrated one thing: buying at a fair price is cheaper than the hard slog of developing your own ideas.
The second lesson has a longer term impact: Exhibitors want a good modern infrastructure, a fact that many political appointees on the supervisory boards of exhibition companies and owners committees were slow to accept. After all, exhibitors are not potential voters and they had never needed anything more than nicely decorated platforms for their own speechifying. But the Reed managers applied pressure. The owners of MesseZentrum Salzburg continuously reinvested the pavilion rent paid by Reed over the years in refurbishing the pavilions and thus established the first benchmark for the industry. A few years ago Vienna was faced with the Hamlet question: to be or not to be? Vienna's city councillors naturally approached the market leader to negotiate a management contract. And what did Reed Exhibitions do? They agreed, on one condition: that the city invest in a new exhibition centre. It promptly did so, and for two years now Vienna has been the proud owner of a brand new exhibition venue - containing everything that all the other Austrian exhibition organisers have ever dreamt of: new pavilions and foyers, parking areas, modern infrastructure, a hotel and - currently at the planning stage - a public transport link to the city centre. And at the hub, Reed Exhibitions with a fixed management contract, but also a fixed rent commitment. In Salzburg, by contrast, Reed continues to pay rent based on the requirement and size of a fair.
Since then, Reed has made every effort to move every exhibition that can feasibly be moved to Vienna - a strategy that no controller would ever fault. But now Reed Exhibitions, too, have reached their limits: The market dictates the rules, and in the exhibition industry the visitors are the market.
Vienna is a good place for preparing trade fairs under Austrian conditions. This is where you will find all the supporting bodies: the city's and the country's political decision-makers, the ministries, the interest groups and associations, the chamber of commerce with its specialist committees and the most important media. "If we had the same conditions in Wels, we would be streets ahead of Vienna", says Brigitte Dallinger, CEO of Wels exhibition company. She is referring to Wels accessibility and central location. Roland Falger, Dornbirner Messe boss, agrees: "Viennese centralism is something we just have to live with. We define our economic zone differently and look towards Switzerland and the southern German region."
The visitors are relatively oblivious to all this. 95% of Austrian trade visitors come from commerce and not from industry. They rarely treat themselves to the luxury of a trade fair visit for more than one day. They arrive, look round and then go home again, usually all on a single day. That's bad for the Vienna location. Its geographic location in the extreme east of Austria means that one-day trips are a long drawn-out affair for most Austrians.
But that is where cities like Salzburg or Graz benefit. Ex-Reed man Nilly Nail has been boss in Graz for two years. Together with his team he is working out a quality concept to support his visitors and exhibitors. "The positive effect of new pavilions is short-lived. What counts in the end are the right conditions for the content, how a trade fair is staged and the results", says Nail. By applying this principle he produced a respectable result with this year's "AustroTech" trade fair.
When it comes to meeting the demands of exhibitors and visitors, Reed Exhibitions no longer necessarily have an advantage over the other (smaller) organisers. A close relationship with the customer, plenty of ideas and thorough groundwork are what count. Reed does not have exclusive rights to these qualities and competition for customers is stimulating Austria's market, which is just as aggressive as Germany's. Nothing is safe from the competition. After Wels set new standards with its energy saving exhibition, every regional do-it-yourself fair has now been enhanced with this topic. There are also hard times ahead for such flagship shows as Salzburg's "Gast". Nail headhunted Salzburg's long-time project manager to Graz and recently surprised everyone with the announcement that Graz is to hold a food and beverages fair next year.
Trade fair professional Jungreithmair sees no reason to worry. In the past he has often staged similar topics (for example, in IT) to other locations in Austria, sometimes even concurrently. But he is realistic enough to know that resistance starts when (market) power gets too big. His people do not have any magic powers, the sector is healthy and he is busy collecting proof that Reed salespeople have recently also been much more generous with rebates in kind. But at the end of the day rebates alone cannot sell a trade fair. It is the exhibitors and the visitors who spread the word about whether expos are good or bad. "If good news prevails, that's good for the expo climate", as Brigitte Dallinger who has been in the business for nearly 40 years knows only too well. A good climate is what Nilly Nail in Graz is going to need, too. His building project - new pavilions - is costing more than EUR 50 Mio. and will be completed in 2007. "The market has become very aggressive and only a few will survive in Austria. We want to make sure we are one of them", he says.
The new boss in Salzburg has the same aim. Henrik Häcker will be moving from Stuttgart to Salzburg on 1 October, where he will be busy developing new trade fair ideas. Will Reed, Salzburg's main tenant, just stand by and watch? Hard to imagine Jungreithmair tolerating a cuckoo in his own nest. If a good trade fair idea materialises he will have to explain to his bosses in Paris or London why he didn't come up with it first. If it is bad, the problem will solve itself. Not an easy start for Häcker.
Sometimes in Austria the strings are pulled by expo organisers in Britain. Arnold Wiesberger
m+a report Nr.6 / 2005 vom 23.09.2005