Hybrid Exhibitions and the Light at the End of the Tunnel

The latest report from the Center for Exhibition Industry Research highlights signs of hope and the need for government support.

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Updated Jan. 28, 2021

Exhibition organizers see long-term value in digital events, as well as a growing need to strengthen relationships with government leaders. Those were among the points emphasized during a recent webcast hosted by the Center for Exhibition Industry Research. During the session, "Outlook for the U.S. B2B Exhibition Industry – How Close Are We to the Light at the End of the Tunnel?" presenters shared the latest findings from CEIR's tracker survey that monitors the impact of Covid-19 on the industry.

Fewer organizers are cancelling their events outright, as 41 percent of respondents are doing so now, compared to 73 percent in the June 2020 survey; 43 percent are postponing, up slightly from 37 percent in June 2020. And the drop in face-to-face events is fueling a rise in demand for digital and hybrid events: 58 percent of organizers say that they will plan events for both remote and in-person attendees, compared with 44 percent who indicated as much last June. Eighty-eight percent of respondents say they are providing one or more virtual offerings, compared to 81 percent half a year ago.

Asked whether they were likely to continue with digital offerings into 2022, almost two-thirds of respondents (64 percent) said they were likely to, while 16 percent said they were unlikely and 18 percent were neutral.

"Hybrid seems like it is going to be the way forward, rather than pure digital events," noted CEIR's vice president of research, Nancy Drapeau

This echoed findings from CEIR's "Report One – Anatomy of Virtual Events and Financial Outcomes," released on Jan. 12, which found that exhibition organizers see long-term value in digital events, with education proving to be the main driver of attendance. While the surge in digital events has been caused by Covid-19, just 22 percent of the 346 executives who responded to this survey said they plan to abandon their virtual-event efforts once we get through the pandemic. More than two-thirds of executives (68 percent) said they expect virtual aspects will be a bigger component of physical events going forward.

The Need for Government Support

A much larger percentage of organizers are now seeking financial relief from the government, according to the latest CEIR survey. Currently, 59 percent of respondents say they are pursuing one or more options for relief, compared to 44 percent in April 2020. The relief takes the form of loans and loan forgiveness for small businesses (48 percent), federally backed financial assistance for impacted businesses (27 percent) and tax relief to mitigate loss (14 percent). 

Drapeau also discussed the potential impact on the exhibitions industry of the new U.S. administration, the proposed $1.9 trillion stimulus package and the "laser focus on getting people vaccinated." 

"When Biden noted they would be purchasing another 200 million vaccine doses, he stated repeatedly, 'This is a wartime effort.' That’s an approach I’m excited to see," said Drapeau. "I think the Biden administration presents a very great opportunity for our industry."

She referred to the administration’s recently released "National Strategy for the Covid-19 Response and Pandemic Preparedness" report, organized around seven goals including a pair that speak directly to the needs of the industry: "Mitigate spread through expanding masking and testing," and "Safely reopen schools, businesses and travel."

"If they’re committed to this, they better put money behind it, and if they do, we better get those masks and tests — they should subsidize," said Drapeau. "Once Covid’s contained, we need to go full-court press to ensure our industry is getting that support — that’s a shout out to all advocacy efforts by IAEE, SISO, Go Live Together and the like."

Those advocacy efforts are about to become even more formalized, explained CEIR CEO Cathy Breden, CAE, CEM, CMP. "A new 501(c)6 organization called the Exhibitions and Conferences Alliance will be announced shortly," she said. CEIR is one of the early supporters of the alliance, and the Society of Independent Show Organizers will be leading efforts along with additional support from Destinations International, the Exhibitor Appointed Contractor Association, Experiential Designers and Producers Association, Exhibition Services & Contractors Association, International Association of Exhibitions and Events, and International Association of Venue Managers. The Go Live Together initiative will be moved into the new alliance.

"Interviews are going to occur next week on hiring a full-time vice president of government affairs to lobby on behalf of our industry on the Hill, and I think that’s something that’s been a long time coming," Breden added. For Exhibitions Day, under the Exhibitions Mean Business Campaign, every year we go in and meet with our congressional representatives and over the years we have been able to gain more recognition. But with a VP of government affairs we are going to be able to build some more meaningful relationships with people in D.C. And that person will be headquartered in D.C." 

More information on the alliance will be announced shortly, said Breden.

Signs of Hope on the Horizon

CEIR's economist, Allen Shaw, PhD., the founder, president and chief economist for Global Economic Consulting Associates Inc., echoed Drapeau's positive outlook. He referred specifically to the "systematic approach" of the Biden administration, the relief package and promise of future infrastructure investment. 

"Thanks to those three factors, the probability of a best-case scenario is much higher than a worst-case scenario," said Shaw.

The best-case scenario he projected would be if vaccines are widely distributed by the second quarter of 2021, resulting in a contraction of the CEIR Total Index of 37.9 percent compared to 2019. The worst-case scenario Shaw referred to is based on wide vaccine distribution being delayed until the fourth quarter of 2021, leading to a drop in this year's index of 69.8 percent compared to 2019. In 2020, the CEIR Total Index contracted by about 77 percent year-over-year.

Shaw said there was a 20 percent probability we would see the best-case scenario vs. just a 5 percent chance we would see the worst-case projection. The most likely outcome, according to the economist, was his "base case," in which vaccines are widely distributed and large events begin to occur by the third quarter of 2021. In that scenario, which has a 65 percent probability of occurring, the CEIR Total Index would contract by 57.3 percent compared to 2019.

CEIR scenarios exhibitions recovery 2021

Education Drives Virtual Attendance

Meanwhile, exhibition organizers expect education to continue as a prime driver of attendance to their digital events — cited by 33 percent of respondents in CEIR's recent "Anatomy of Virtual Events" report as the top reason organizers believe professionals attend their event. This was followed by the need to keep up with industry trends, cited as a top reason by 11 percent of organizers, and fulfilling professional certification requirements, according to 10 percent. The full list of the biggest virtual-event attendance drivers breaks down as follows:

  • 33%: Education for professional or personal development
  • 11%: Keep up-to-date with industry trends
  • 10%: Fulfill professional certification requirements
  • 9%: See, experience new technology, new products
  • 8%: Professional networking
  • 6%: Idea generation
  • 5%: Reputation of event
  • 5%: Build, maintain relationships with suppliers
  • 4%: Ability to engage with experts
  • 4%: Gather information for upcoming purchase
  • 3%: Get inspiration/motivation/recharge

The report's authors emphasized that digital events were seen as an addition to, rather than a replacement of, organizers' in-person exhibitions.

"Virtual events are different from their in-person counterparts," they wrote. "Impactful content in education …[is a] powerful way to build an audience to drive traffic and participation in events that happen in person. Having both types of events in a portfolio will likely have positive, synergistic benefits to an organizer in building membership, participation and, if the events are designed and run well, the bottom line."

Financial Sustainability of Virtual Events

The findings showed that virtual events tend to be smaller and shorter on average than the equivalent in-person exhibition. For example, the average number of minutes per in-person educational session is 70, but this dropped to 59 for digital events. While the average number of hours per day of an in-person event is eight, it is just six for a virtual gathering. About six out of 10 respondents charge something for their events, with 37 percent charging on a tiered-pricing model and 19 percent charging a flat rate. On average, attendees are being charged $357 per event, with the median at $200. 

While virtual-event financial goals were on average much smaller than would be for a physical event, 44 percent of respondents said they met their financial goals (whether that was to be self-sustaining, turn a profit or some other aim) while 21 percent said they exceeded it. 

Some virtual events already have succeeded in generating net profit, according to the report. "Overall, gross revenues remain low," the report notes, "but the ability to glean a profit from such events does suggest virtual events offer staying power as an ancillary revenue stream. Virtual events are more likely to add to an event organizer's portfolio rather than cannibalize or replace in-person physical events."

The report also looked at virtual-event trends regionally and by industry. The U.S. proved to be  a laggard in its use of hybrid events, with the geographical use of hybrid events broken down as follows:

  • 55%: Africa
  • 48%: Latin America
  • 45%: Europe
  • 39%: Asia
  • 10%: United States
  • 5%: Canada

The industry most eager to embrace digital tools over the long run was "finance, legal and real estate," for which 82 percent of respondents who said they believe virtual will be a larger component of physical events going forward. This was followed by education, in which 74 percent of respondents said they agreed.

The report was the first of three in a series. The next two will be titled, "Lessons Learned To-Date and Technologies Used," and "Case Study Examples," respectively. This full "Anatomy of Virtual Events" report can be accessed here