London, England – Britain’s historic vote last week to leave the European Union wiped out a record $3 trillion from global markets and sunk the British pound to a 31-year-old low against the US dollar. Financial markets are recovering, but many companies are putting investments on hold as the country sorts out a myriad of political and economic uncertainties. How will all of this affect the global exhibitions industry?
That’s a highly relevant question as several of the world’s major exhibition organizers, including Reed Exhibitions, UBM Americas and Informa’s Global Exhibitions, are owned by UK-based parent companies. Reed, UBM and Informa have invested heavily in acquisitions of exhibitions around the world. Will Brexit’s impact on the UK economy curb that trend?
“Markets and currencies are showing a lot of volatility as they absorb the news, but it’s business as usual at Informa and in the Global Exhibitions division,” Charlie McCurdy, Chief Executive of Informa’s Global Exhibitions division, told TSE. “We’re listed in the UK but we operate internationally and in many regions. Only about 12% of the division’s business is in the UK and Europe.”
He added that exhibitions revenue last year accounted for 22% of parent-company Informa plc revenues, and a large majority of Informa’s exhibitions revenue and operating profit comes in US dollars (USD) or currencies tightly aligned to the dollar. “To the extent that the British pound’s exchange rate with USD remains at its current low level, the value of those USD profits expressed in pounds goes up,” McCurdy explained. “Our portfolio of exhibitions has experienced healthy growth and we continue to seek attractive acquisitions in a targeted, disciplined manner.”
[Editor’s Note: TSE reached out to UBM Americas and Reed Exhibitions but neither could comment at press time.]
David DuBois, President and CEO of the International Association of Exhibitions and Events (IAEE), said that Brexit’s near-term impact will be a downward push on global stocks as investors take a “super-conservative” approach to their financial decisions. “It may take up to two years before the UK and the EU have finally negotiated terms for Britain’s departure. Meanwhile, exhibition organizers owned by UK-based companies will adjust accordingly and move along to continue their aggressive marketing efforts to support the exhibitions and events that will hopefully continue to thrive.”
Kai Hattendorf, Managing Director and CEO of UFI, the Global Association of the Exhibition Industry, told TSE that the biggest challenge created by Brexit at this point is the mounting insecurity about the how the country will move forward. “Until the UK actually leaves the European Union, factually nothing will change. But while markets and businesses can deal with difficulties and challenges, they don’t like uncertainties.”
As many political and economic analysts have pointed out, Britain’s highly contentious vote to depart the EU after being a member for 43 years was partly a backlash against the downside of globalism. This backlash is happening in the US and other countries, where there’s a rising call for more focus on national issues and tighter border controls. Yet globalism has been a powerful driver of the exhibition industry’s growth over the last two decades. Does the Brexit decision signal a more challenging environment ahead for the growth of international exhibitions?
UFI’s Hattendorf answered by noting that exhibitions can play a crucial role in bridging borders in difficult times. “As leading figures and companies gather at their international trade shows, they will take stock of the situation. There will be exchange, collaboration and trade. And, in addition to the economic context, trade shows will continue to bring together people from different nations, cultures and religions to work together and help their respective industries and economies grow.”
IAEE’s Dubois agreed with that assessment, saying exhibitions will continue to be “a catalyst to work through any negative impacts that these types of decisions might cause.” He added that “enhanced border controls will be important to make sure that our attendees and exhibitors feel safe and continue to support our global shows.”