Event organisers left with no show
Thousands of Kiwi businesses have lost their ‘shop fronts’ by being unable to exhibit at shows because of Covid-19, leading to billions of dollars worth of lost business. Jane Phare reports
Our business activity is effectively banned at the moment yet thousands of people are converging on malls every weekend.
The New Zealand economy is losing billions of dollars worth of business because trade and consumer shows are constantly being cancelled due to Covid-19 restrictions, an events organiser says.
Brent Spillane, managing director of XPO Exhibitions, says thousands of Kiwi suppliers and businesses are suffering as a result. He wants help from the Government to develop a plan to allow trade shows and exhibitions to be held safely under Levels 1-2.5.
Spillane, whose company would normally hold 18 trade and consumer exhibitions each year, is frustrated by lack of progress on an issue he says is urgent. He’s had to cancel or reschedule 16 events this year and says other events organisers face the same fate.
“Our business activity is effectively banned at the moment yet thousands of people are converging on malls every weekend and every weekday without any strong controls in place.”
If the Government was serious about helping businesses recover and boosting GDP, it needed to urgently develop a plan to allow trade shows and exhibitions to be held, he said.
The New Zealand Events Association has requested a meeting with the Minister of Health, Chris Hipkins, through MBIE, but has yet to have a date confirmed. The events association will argue that exhibitions should not be classed in the same category as mass gatherings given the more controlled environment, pointing to exemptions in Germany and more recently in Queensland and South Australia.
They want shows to go ahead under strict Covid-19 guidelines which could include masks being distributed at events, contact tracing and use of the Covid-19 app, erecting temporary walls to break up large spaces, and introducing specific session times to control numbers.
“We can do those things. It’s just that we haven’t got a seat at the table to discuss what’s appropriate for the industry,” Spillane said.
A spokesperson for the Ministry of Health said that although the restrictions of Covid-19 under higher alert levels were difficult for many businesses and members of the public, it was important to remember that they were in place for public health reasons. Indoor mass gatherings posed a higher risk for transmission of infectious diseases when they were circulating in the community.
“Any decision to change our advice must be based on an assessment of the overall risk for each environment, which includes looking at how easily the virus could spread, how quickly contacts could be found if it did, and mitigations in place to lower the risk.”
But Spillane questions why, if indoor mass gatherings posed a higher risk, large shopping malls were operating with unlimited attendance and a far lower benchmark for safe operating practices than events organisers were willing to implement.
Spillane said that apart from the devastating effect cancelled exhibitions had on event organisers and suppliers, exhibitors were also hit hard. For many, displaying their products at an exhibition held the same value as having a “shop front”.
Exhibitors made millions of dollars worth of sales but also made connections that resulted in ongoing sales and business relationships that lasted for years. They were desperate for the events to be back on, he said.
“They know we can run them safely but we seem to be struggling to get the ear of government to assist.”
Spillane acknowledged the Government’s $10 million Domestic Events Fund but described it as a “drop in the ocean”.
XPO will receive $250,000 from that fund but on the condition that half the amount is paid to suppliers as pre-payment for services. Spillane said the remaining amount would barely cover rent obligations and associated costs.
But, he said, the fund was not the issue.
“We’re not looking for enormous handouts and financial aid. We’d prefer to have the certainty to recommence running our events.”
Venues like the ASB Showgrounds had gone without income for months, and so had the many businesses associated with setting up a major event or exhibition.
The showgrounds’ CEO Mark Frankham is furious at the lack of response to a series of phone calls, texts, emails and presentations to various government ministers and departments pleading for help to be able to run events safely.
He’s now in charge of a business that is losing millions of dollars of income every month. Since the first lockdown, the showgrounds have lost $6m in operating costs alone.
The grounds cost $250,000 a month to run, including the lease rental due to the Cornwall Park Trust Board that owns the land. Frankham has asked for a $210,000 grant to help get through the closure but says three weeks on he’s heard nothing.
“It’s a very dangerous situation and we’re very upset that we’ve not been listened to.”
He’d normally expect 1.4 million visitors a year to walk through the gates, many of whom would come from outside Auckland and stay in accommodation for between three and 10 days.
The showgrounds host 285 events a year, including large events like the Easter Show, and are worth $125m to the Auckland economy. Now the place is deserted.
“If we have one more shutdown we are barely going to survive. We’re so far in debt now it will take at least four years to pay it off.”
Frankham is frustrated that as a community-based organisation which, under an act of Parliament, must return part of its profits to charities and the community, the showgrounds have had no support from the Government.
Frankham said a visit to a crowded Auckland shopping mall recently left him feeling angry. Safety and cleaning protocols, and contact tracing registers, had been in place at the showgrounds for years and there was no reason events could not be held safely.
Even if Auckland drops back to level 1 in October, Frankham said he had two shows scheduled which he had been unable to advertise due to the ongoing uncertainty.
It was Spillane’s father Bill who started one of the country’s biggest shows, the New Zealand Gift & Homeware Fair, 20 years ago. It’s now one of the country’s largest events, the place retailers go to stock their shop shelves before Christmas.
Spillane has had to cancel two gift fairs this year as a result of Covid-19 restrictions on mass gatherings.
“Hundreds of millions of dollars worth of trade is done at that show alone,” he said.
XPO also runs shows like the Food Shows in Auckland, Wellington and Christchurch, The Baby Show, BuildNZ, and the Waikato Home & Garden Show.
The BuildNZ show was to have been XPO’s first event held after the first lockdown ended. But on the eve of the opening last month, Auckland went back up to level 3. Spillane said exhibitors had outlaid enormous amounts to build their exhibits.
“Some of them had built twostorey homes inside the exhibition.”
He cancelled two Baby Shows, losing hundreds of thousands of dollars in wasted advertising which included bus backs, billboards and television ads.
XPO has been forced to lay off 19 trained staff, even with the help of the wage subsidy. And the company has paid out millions of dollars in refunds to exhibitors.
The loss to the Auckland economy alone was huge, Spillane said. He commissioned a report four years ago based on just five trade shows that XPO hosts. It showed that more than $9.5m was spent (excluding GST and trade purchases made at or after the events) as a result of the shows.
That figure included $3.51m for the delivery of the events; $3.89m spent by visiting exhibitors and $2.15m spent by visiting attendees. The report estimated that those attending the trade shows had a registered buying power of $1.8 billion.
And Spillane estimates that trade shows and exhibitions contribute between $3.8b and $5.7b to New Zealand’s GDP every year. A report commissioned by the Australian exhibitions and business events industry shows the business is worth A$35b ($38b) in GDP. Spillane estimates that New Zealand exhibitions and business events generate between 10 per cent and 15 per cent of that figure.
Spillane describes the business and exhibition sector as “off the radar” and says it is ridiculous to view an event staged in 25,000sq m of showground space with the same restrictions as a gathering in a community hall.
“They are chalk and cheese and we are not getting any concession on that basis,” he said. “I believe they [trade events] need to be classified differently and have different sets of safety protocols attached to them.”
XPO has six events still set to run this year, all of them sold out. Spillane said there was a limit to how many times an event could be rescheduled. “It’s [crippling for those involved].” The industry desperately needed some certainty and clarity from the Government, Spillane said.