A Review of our upcoming Boat Show Season and ongoing Trade Show Industry
July 10, 2020
(Revised August 24, 2020)
Trade shows are a large part of the marine industry. Not only in retail boat shows. There are many B-2-B shows within our industry as well. They come in all sizes and venues, from regionally sponsored and national marine supplier events to dealer meetings and of course retail shows. Nationally, the trade show industry is a $14.3 Billion Industry and estimated to have an indirect economic impact as much as $100 Billion in the marketplace. The New York market alone estimates the loss revenue impact to The Jacob Javits Center will reach $100 million dollars as a result of these times. Additionally, the lack of activity at this one facility will reduce the local economy by $1 Billion over the course of the shutdown. The impacts touch many layers of our communities and businesses not just the venue. From air & ground travel to hotels, restaurants, and other local establishments the Trade Show Industry has a deeper affect than most industries.
FALL BOAT SHOW SEASON:
The boat show season is approaching quickly and in years past by this time we would have been deep into the planning of these events. Some shows have announced their cancellations. Such events are:
The FT Lauderdale Boat Show is still on schedule for later this season, October 28 through November 1, 2020; FT Lauderdale Boat Show Site.
We understand things are constantly evolving and there could still be some adjustments to this schedule, however, at this point the above information is intact. These cancellations also need the proper context. In every case itemized above with one exception, the events were cancelled NOT due to public health and safety concerns, but rather due to a lack of exhibitors. In the events above, most of the exhibitors are marine retailers. Since the end of March 2020, retail sales of boats and boating products hit a pace that our industry has not seen before. This increase in retail sales AND manufacturing facilities and suppliers shutting down for health and safety reasons for as long as 8 weeks, the market’s supply of products has been significantly diluted. Increase in demand AND decrease in supply, has strained the retailers’ ability to run their businesses. With little supply, retailers are having to make a difficult decision NOT to exhibit in their local boat shows. Events that have been a corner stone of their businesses for years. Now they are having to opt out of attending as they will not be able to recoup their costs to exhibit in these events for months. As exhibitors do not renew their contracts with these events, the shows are then faced with the decision of even having the event. In the cases above, event organizers are deciding to cancel this year’s event.
In the case of FT Lauderdale International Boat Show, contracts have been sent. Deposits have been paid. The exhibitors for this show are generally the manufacturers themselves. Thereby products to show & sell come directly from the manufacturers. The retailers still take part in the show, but the product supply is generally on the manufacturers.
Show producers have been very understanding and are working with exhibitors to be fair and accommodating during this time. Our meetings with event organizers have been very productive. Show producers have been very understanding and accommodating to the current landscape. We pride ourselves to build long-term relationships with these event producers. As a result, we have been able to approach this on a common platform to meet everyone’s needs and objectives. The preparation and aligning the complex show producer environment is not an easy task and we are working with each of them to best understand their situations and help where we can. We expect some new show and exhibitor guidelines to follow for the shows to stay on schedule. We believe many of these new guidelines will be put on the show organizers to adhere to, however, there will undoubtedly be a trickle-down effect to exhibitors and exhibit managers.
Some of the items that are being considered are designed to better control access to the shows through such measures as:
- Selling tickets online only
- Each ticket has its own “Entrance Time” – entering the show on specific days and times only
- Install new “Exit Only” gates to direct patrons leaving the show away from patrons entering
These steps are designed to
- Eliminate large congregation of show patrons trying to enter the show
- Spreading out people coming through the gates
- Separating large congregations of people from collecting in small areas
- Manage the overall number of people that are on site
This means exhibitors should experience:
- A smoother flow of patrons in the mornings – better to engage each as there will not be a morning rush and more level flow of people in the show throughout each day
- Be able to spend more time with each qualified customer throughout the day and not have to be rushed as much during the peak hours of the show
TRADE SHOW INDUSTRY:
To help understand and proof these trade show plans, the Industry sponsored a test platform at the Orange County Convention Center in Orlando, Florida. “Together Again Expo” took place on Friday, July 24th for one day only. The convention center was set up as a normal trade show. Together Again Expo was for industry members only. The event was free for exhibitors. Each exhibitor received a 10’ x 10’ booth. Exhibitors were industry trade companies looking to ensure steps taken in this event provided a safe and healthy environment for everyone. This event was not open to the public. The event was a success and received good reviews from local, county and state constituents that have a responsibility to maintain public health and safety.
On a larger scale, but still relevant, the trade show industry has been lobbying our government to provide tax benefits to exhibitors of any trade show. There is currently a request to allow trade exhibitors to apply 50% of trade show costs as a tax credit for 2020. The tax credit is geared to incent exhibitors to reengage trade shows soon. While the requested tax credit is yet to pass, it is a definite incentive which should gain support, should it be adopted. As of the date of this brief, the Orange County Convention Center in Orlando, Florida has had 31 events reschedule. Losing these events & conventions have negatively impacted the local economy by an estimated $314 million. There have been an additional 58 conventions or events that have been cancelled. The local economic impact is estimated at $1.21 billion.
Source: OCCC Website
In more than 25 years in the marine industry I have yet to experience anything like this. Many manufacturers have worked the challenging phases of reopening their facilities. From access to raw materials to personnel and transportation challenges, many are back to run rates they enjoyed in Q1 2020. However, still many are not. This coupled with better than expected retail activity in March, April, May, AND continuing into the summer. Manufacturing facilities are challenged to keep their retailers supplied with product. A unique opportunity to make up lost earnings from March & April shutdowns, the demand exists, however, the supply chain is challenged. A more desired problem, nonetheless, still a problem. The amount of new AND used product in retailers’ inventory is frightfully low compared to 2019 numbers.
SPRING BOAT SHOW SEASON
We are well prepared for the upcoming fall show season. Consumer confidence is still strong. Southern markets are carrying strong sales deep into the summer and people will continue to enjoy their responsible activities on the water. We are now getting a little more information to consider what life in 2021 will look like and the upcoming Spring Show Season. Much of this will still be impacted by the upcoming November elections. We are expecting a similar slate of challenges in 2021 while also anticipating a similar set of solutions. Much will be unique from show to show, so we will have to stay nimble and ready for just about anything. We are prepared and staying connected to our show partners prepped for new guidelines that will have to be adhered to. One of the first shows of the calendar year is the New York Boat Show. This year’s event, January 27-31, 2021, is currently on schedule. At the time of this brief, much of the show’s host venue, The Jacob Javits Center, is still outfitted as a temporary hospital. The Javits Center, a New York state run facility, has been communicating its situation well. In June 2020, The Javits Center released a comprehensive plan to reopen. This includes a dismantling, sanitizing, and refitting the Center by September 1st, 2020. This, however, does not imply shows will begin occupying the space on September 1st. The contract between the NMMA and the Javits Center for the 2021 New York Boat Show binds the NMMA for up to 120% of the cost of the contract should the show not go on as scheduled. This is significant and requires a level of diligence and discipline unlike normal scenarios. This situation is repeated for show producers many times for a single event. The planning for a seemingly simple boat show has many dependent components. Due to the significant planning required each event will be monitored and assessed on its own set of circumstances to determine timing of Go/No Go decisions. A unique aspect to address is many of the non-boat trade shows come from out of town – exhibitors and patrons alike. The travel requirement for patrons and exhibitors is beginning to conflict with company “Travel Bans” and therefore putting the trade show market restart at risk. For the events that are more locally oriented, such as boat shows where many exhibitors (retailers) and patrons (customers) are local, there is less conflict with corporate travel bans and restrictions.
As we take the mounds of information we have collected, we conclude we are continuing to navigate our course. We are prepared for Q3 retail activity to follow its previous years trends. Shows and events are a vital piece of our business. Dealers have matured and become more sophisticated, thereby, reinventing themselves, bringing customer experiences like never before. While customer experiences are important in our industry, we are still challenged to keep things fresh. A change from the norm. Not for our sake, but for the sake of the customers and their expectations. People yearn for Fall In-Water Boat Shows, Spring Season Boat Shows, and Boating Events of all kinds. We are fortunate to be a part of a deeply passionate industry made up of deeply passionate people. This passion is ignited by our customer base and we all embrace it. This passion, as it has shown us since this past March, will continue.
I hope this brief has provided you with some insight, information, and relevant perspective. We are eagerly preparing for the upcoming months and of course watching the race for a vaccine closely. We are optimistic on both fronts and preparing for as many contingency scenarios as possible. We hope you enjoyed this brief. Please reach out to us if you have any questions or comments.
Best Regards and Stay Safe!