by: Lesley Martin|
August 31, 2017|
Let’s say there’s an upcoming trade show at McCormick Place. You exhibited at the same facility last year, so you should be able to use last year’s costs to forecast this year’s budget, right?
Not exactly. Assuming that you can reliably predict upcoming trade show costs based on historical data is a common pitfall among exhibitors. Even if you’re budgeting for the same trade show that’s in the same facility as last year, or a similar trade show in the same facility and time frame, the costs can be vastly different.
That’s because a show’s labor rates are determined on a show-by-show basis. As advocates of transparency and fair business practices, we’re here to explain why.
Why are labor rates different from show-to-show?
You might assume that the facility, local union, city taxes, or regional economy determine the labor rates of a trade show. While those factors are influential, the primary driver is the relationship between the show manager and the general contractor.
Each trade show is organized by the show organizer (also known as the show management company or association). The show organizer chooses the show’s city, convention center, and general contractor (“GC”). The GC is hired to handle the physical set-up of the show.
When hired, the GC signs a contractual agreement with the show organizer. In this contract, the two parties agree that the GC will retain exclusive services to provide for the show organizer and the exhibitors. The labor rates for the exclusive services charged to exhibitors are determined in this same contractual agreement.
A new contractual agreement is signed for each trade show. Thus, the labor rates of exclusive services may change from show-to-show (or from contract-to-contract).
What are the exclusive & non-exclusive services?
At a trade show, there are two types of services: exclusive and non-exclusive.
Exclusive services are only provided by the GC. Usually, the GC retains services that require the use of equipment (like a forklift) or enable smoother logistics (like material handling).
The contractual agreement between the show organizer and the GC outlines the exclusive services for each show. Each show is different, but the exclusive services could be:
Non-exclusive services allow exhibitors to choose their service providers, hence the term exhibitor-appointed contractor (“EAC”). Usually, the non-exclusive service is limited to the installation and dismantle of an exhibit, or services such as AV and floral.
How are rates for the services determined?
A common misunderstanding among exhibitors is that the facility or the local economy drive the service rates at a trade show. While those factors play a part, the show organizer and general contractor are the key drivers for the final costs.
For the exclusive services, the exhibitor can only work with the GC. The labor rates were determined in the contractual agreement between the show manager and GC and published in the general contractor’s show kit. Unfortunately, the show kit is not yet published when exhibitors reserve the booth space. Exhibitors sign their contract blindly without a chance to negotiate the rates. Accurately budgeting might be nearly impossible without full disclosure of the rates.
Most exhibitors don’t realize this: The show organizer and GC write a different contractual agreement for each trade show. That’s why each trade show has different rates. Thus, when you exhibit at the same trade show in the same venue, you cannot reliably predict that the costs will be the same—and transparency goes out the window.
In contrast, the exhibitor can choose the provider for the non-exclusive services. Thus, the rates are open to competition and determined by the market.
Nuvista is a provider of non-exclusive services and is dedicated to transparency. During the pre-planning meeting, our team gives a detailed service estimate. At the end of the show, we audit third-party invoices for accuracy, particularly material handling invoices where the error rate is greater than 25%. We will reconcile actual costs against budgeted costs and prepare a single, audited final invoice.
How can I learn more?
With Nuvista’s dedication to transparency, we’re here to help you understand and be better able to make informed decisions. Together, we can minimize surprises and make your trade show experience a success.
Watch for upcoming blog posts and speaking events with Amanda Helgemoe, founder and President of Nuvista. Amanda is also a board member of the Experiential Designers & Producers Association (EDPA), and is dedicated to addressing industry-wide issues and concerns. For several years, Helgemoe has worked with other industry leaders to collect independent research on the costs of trade show exhibition. Now, she uses her findings to teach a CTSM required course at ExhibitorLive! and has spoken at events for HCEA, E2MA, and EDPA.
Professional, experienced installation and dismantle, budget development, partner sourcing, on-site supervision and invoice reconciliation, Nuvista does it all.