IT is still billed as the most important travel tradeshow but rising costs of participation at ITB Berlin are forcing exhibitors to look twice at ROI.
Asian sellers interviewed said ITB is costly even for buyers in light of accommodation costs, and this may impact their numbers and quality in turn.
“ITB is the most expensive event we attend. It still works but actually each year we see fewer buyers from markets outside Germany. If it becomes a German market event, we would reconsider our investment, downsizing to the market than the large corporate stand plus tables in the various tourism authority stands we take up now,” said Chris Bailey, Centara Hotels & Resorts’ senior vice president sales and marketing.
Judy Lum, Tour East Group vice president-sales & marketing, said the cost of a corporate stand has risen 40-50 per cent in 10 years, given a hike of five to eight per cent a year. This excludes cost of furniture, F&B and electrical fixtures, which has also increased exponentially. Cost of participating within the NTO stand, meanwhile, has risen more than 100 per cent as the NTO no longer subsidises the fee. “Worse, the participation cost, which is the bulk paid to the NTO, is not tax deductible,” said Lum.
“For Tour East, we are seriously assessing the ROI on roadshows versus ROI on tradeshows. In fact, we have cut down on tradeshows since 2012 and are following the footsteps of some hotel chains by investing on roadshows.”
World of Accor Expo, for instance, travels to 12 cities across Asia-Pacific. Last year, 200 Accor hotel or regional sales executives met with over 5,000 clients, a “powerful and targeted strategy” said Graham Wilson, senior vice president sales & marketing.
Wilson said the chain offsets its ITB expense by having a global sales meeting prior to ITB. It also hosts a VIP client event to thank its most valued customers.
Richard Brouwer, CEO of Diethelm Travel Group, said: “Over the years, the number of quality buyers has dropped, which is due indeed to costs. Many buyers now also prefer to meet their suppliers on their home turf, where more detailed meetings can take place and more of their team members can be involved,” he said.
But David Ruetz, head of ITB Berlin, said the show has kept its costs down, with booth price at 170 euros (US$235) per m2 today after inflationary rises of four to five per cent per year. Berlin has more than 130,000 hotel rooms, which ensures reasonable rates.
Over the past 10 years, the number of international buyers has actually risen, now accounting for a third of all buyers compared with 25 per cent before. “If you look at ROI, it should be how much money did I spend per lead? No question, we have the record for the best price/value equation,” he said.
And the best judge is a waiting line to exhibit at ITB in the Asian and Middle East halls. “Thailand and Malaysia are among Asian countries looking to expand while Mongolia, being official partner next year, will naturally need more space,” he said.
For other stories, go to TTG Official Daily – ITB Berlin 2014
