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This Just In

The Euro Perspective: How the Ukraine War Is Affecting Trade Shows

SUE PELLETIER, SENIOR EDITOR

COLOGNE — Every year jwe GmbH produces a Global Industry Performance Review, an extensive research report that analyzes top exhibition company financials as well as global and regional market trends. Trade Show Executive recently caught up with Jochen Witt, President & CEO of jwc GmbH, to learn more about how the war in Ukraine could affect trade shows in Europe and beyond, how outbreaks of the latest COVID-19 subvariant are disrupting business in China, and more.

Jochen Witt, President & CEO of jwc GmbH

TSE: Several show organizers have announced various levels of boycotts and sanctions against potential exhibitors/sponsors based in Russia, as well as in some cases canceling upcoming shows in Russia, due to Russia’s invasion of Ukraine. How do you see this unfolding?

Witt: Russian participation in shows in Western Europe is not likely to take place. There may be a few exceptions in the case of Russian companies that have subsidiaries in Western Europe, but in general, I would think that participation of Russian companies in shows in Europe will not take place as long as this invasion is going on.

There also are a number of companies based in Western Europe that used to organize events in Russia. These shows also will cease to exist for the time being — and several companies have even closed their entire operations in Russia. [For example, the Hyve Group, a London-based events company, is exiting the Russian market due to the conflict in Ukraine [Hyve has agreed a deal to sell its Russian business to Rise Expo in a deal worth up to £72 million, according to the Independent.]

Another aspect to keep in mind for shows in Europe is that some venues may now being used for other purposes, such as to house refugees from the war. Poland, which is an active player in the European exhibition industry, is taking in the lion’s share of refugees, which might well affect the business there. But I think this is this is one thing.

TSE: What effects do you think we could see in terms of further inflationary pressures on trade show-related materials?

Witt: This indirect fallout will be the most difficult to discern. By indirect fallout, I mean a number of the effects we already are seeing such as interruptions in distribution chains, rising inflation and especially energy prices, which are rising significantly. We already have about 30% price increases compared to pre-Ukrainian war levels. Of course, all these price hikes at some point will affect the exhibition industry. The reduction in trade between Russia and European countries will also have an effect on trade between other countries, which will have an effect on our business in some way.

If you add that all together, [the Russian war in Ukraine] will affect the trade show business in Europe. How large of an effect it will have on our business is very difficult to estimate, especially coming right behind the coronavirus crisis.

TSE: The coronavirus, specifically the Omicron BA.2 subvariant, is now spreading rapidly in parts of Europe and Asia. What potential effects could this have on upcoming shows in affected regions?

Witt: There are there are still a number of factors which we have to look at, the main one is that the effect will be symmetrical, which means it will be very different from country to country. For example, in China, the entire city of Shanghai is under lockdown. Shenzhen now has been released from lockdown and things are easing. But the Chinese government’s zero-COVID policy, there’s a risk that everything could shut down at any time without warning, as we see happening in Shanghai now. This was a surprise because we thought that China would be picking up this year very nicely and would be on track again. If the lockdowns lift soon, I think China will very quickly come back to pre-crisis levels.

The domestic market business is coming back in the U.S. now that it is without lockdowns. At least what we can see today, this year the U.S. will be at about 70% to 75% of pre-crisis levels.

In Europe, the situation needs to be considered in a more differentiated way. We had a total lockdown here in Germany until recently; now everything is released again. I expect that the next month will be fairly good for the trade fair business. The risk returns again in the fall and winter because we don’t know if there will be new variants. So there is an inherent risk that we will have lockdowns again and that business will suffer.

But right now, the outlook for Europe is rather positive because most countries have eased their COVID measures and events can be conducted, exhibitors and visitors can travel. Right now, the mood and the outlook are good.

One positive thing that has come out of this is, when companies had to lay off people, they created more efficient structures and ways to gain efficiencies and reduce costs. So while there are difficulties and rising costs, these are at least somewhat offset by gains in efficiencies.

What I would say is, in summary, I believe that the industry right now is on an in an upbeat mood. But there are a number of uncertainties in the horizon which we should observe.

Let’s hope for peace.

Reach Jochen Witt at jwitt@jwc.eu.com

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