CEIR’s 2022 Third Quarter Index Results Demonstrate a Strong Rebound of the U.S. B2B Exhibition Industry is Continuing
December 14, 2022
According to the Center for Exhibition Industry Research (CEIR), the U.S. B2B exhibition industry continues to rebound, demonstrated by a continued improvement in Q3 2022 from the previous 10 quarters. This welcome news was announced by CEIR officials on Dec. 14 during Expo! Expo! IAEE’s Annual Meeting and Exhibition, taking place Dec. 13-15 in Louisville, Ky.
The in-person event cancellation rate remains low, although it increased slightly from 2 percent in Q2 to 3.1 percent in Q3, demonstrating a substantial improvement from 97.8 percent in Q3 2020 and 20.6 percent in Q3 2021, according to CEIR’s research.
Figure 1: B2B Exhibition Industry Cancellation Rate, Percentage
A relatively low cancellation rate and an improvement in completed events boosted the Q3 2022 Index result. As expected, the CEIR Total Index – a measure of overall exhibition performance – continues to recover, with a result 22.3 percent lower than 2019 (as shown in Figure 2). However, this marks a vast improvement compared to the past two years, including declines of 98.3 percent from 2019 in Q3 2020 and 50 percent from 2019 in Q3 2021.
U.S. GDP and the CEIR Total Index
The U.S. economy’s performance fared far better, registering a 4.7 percent increase in real (inflation-adjusted) GDP from Q3 2019 to Q3 2022. On a seasonally-adjusted annual rate (SAAR) basis, real GDP in Q3 increased 2.9 percent from the previous quarter, following two consecutive quarters of decline in Q1 and Q2.
This rebound primarily reflected an acceleration in nonresidential fixed investment, upturns in government spending at all levels, declines in imports that were partly offset by a smaller inventory accumulation, a larger decrease in residential fixed investment and a decline in consumer goods spending.
Up to Q4 2021, economic recovery had been led by strong spending on goods, however, the initially sluggish recovery in services industries has recently continued to pick up momentum. In Q3 2021, real spending on consumer services finally recovered pandemic losses and robust expansion has continued since that time. In Q3 2022, real spending on consumer services exceeded Q4 2019 spending levels by 3.3 percent.
Figure 2: Real GDP vs. CEIR Total Index, Q1 2020-Q3 2022, % Change from 2019
Q3 2022 Exhibition Industry Performance
Of all shows originally scheduled to be held in Q3 2022, 0.38% were postponed, 3.04 percent were canceled and 96.58 percent were completed as scheduled. Among canceled in-person events in Q3, approximately 38 percent pivoted to produce digital events. Excluding postponed events, the cancellation rate reached 3.1 percent, as indicated previously.
Figure 3 provides insights about events completed during Q1 2021 to Q3 2022, comparing performance of each to the same quarter in 2019.
While the Q3 2022 results reflect that a continuing but choppy and uneven recovery is underway, the direction is positive, with the overall Index and specific metrics improving for the past six quarters.
Among completed events, 14% have surpassed their pre-pandemic levels of the CEIR Total Index. Some show organizers launched new shows, expanded existing shows to new locations or held them at a different time of the year.
Looking at results excluding cancellations, the performance of events that happened in Q3 2022 demonstrates continued improvement, down only 19.9% compared to 2019 (Figure 3) – much better than the 54.9 percent decline registered in Q1 2021 compared to 2019.
Among four metrics, exhibitors suffered the largest decline of 23.6 percent, followed by attendees with a drop of 23.2 percent. Real revenues tumbled 18 percent, while net square feet (NSF) in Q3 was the metric that contracted the least at 14.4 percent from Q2 2019.
Figure 4: Q3 2022 CEIR Metrics for the Overall Exhibition Industry Excluding Cancellations, Percentage Change from Q3 2019
Insights on a Recession
Widespread views abound on whether the economy is in a recession or heading into one, and the outlook has implications for the exhibition industry. According to CEIR officials, a rebound in Q3 GDP and robust payroll employment gains throughout the year, including increases in October and November of 284,000 and 263,000 jobs respectively, dispel notions that the U.S. economy has been in a recession up to this point in 2022.
However, they added, persistent elevated inflation has created economic headwinds, prompting the Federal Reserve to take on aggressive interest rate hikes. At its Aug. 26th meeting, Federal Reserve Chairman Jerome Powell noted that the Federal Reserve remained committed to restoring price stability and bringing inflation in check. At the Nov. 3 meeting, Powell reaffirmed the Federal Reserve’s restrictive monetary policy stance.
While the pace of interest rate increases may slow from the Dec. 2022 meeting onward, the level of interest rates will remain high in 2023, resulting in a cooling of the economy. The probability is about 50-50 that the economy will slide into a recession during 2023, according to CEIR officials.
B2B Exhibitions Recovery
As the economy slows down further and businesses are more cautious, 2023 could prove to be a challenging year for the exhibitions industry, CEIR officials said.
“[Nonetheless], the B2B exhibition cancellation rate should remain extremely low, and the performance of completed events will continue to improve,” said CEIR Economist Dr. Allen Shaw, chief economist for Global Economic Consulting Associates, Inc. “A full recovery for the industry is expected in 2024.”
Among 14 industry sectors that CEIR monitors, the government and discretionary consumer goods and services sectors are expected to perform better, while the IT and building and construction sectors will lag behind the overall exhibition industry.
“Despite Omicron at the outset of 2022, CEIR research has documented an intent to return to face-to-face engagement at B2B exhibitions, and CEIR Index quarterly results show recovery is happening,” said CEIR CEO Cathy Breden. “Each quarter, the Index is showing that more business professionals and exhibitors are coming back to the B2B exhibitions channel to meet their marketing, sales and business information needs.”
Explanation and Definitions of Q3 Comparisons
As previously mentioned, 20.6 percent of trade shows scheduled to be held in the third quarter of 2021 were canceled, limiting the usefulness of comparisons of Q3 2021 and Q3 2022 results, as any positive change would be large and misleading. A more useful comparison is to the 2019 performance results, measured as the industry benchmark before COVID-19 forced the industry shutdown. Thus, events in the third quarter of 2022 are compared with those in the third quarter of 2019 (in Figures 2-4).
The CEIR Total Index in Figure 2 is a weighted average that includes both canceled events, with zero values for all exhibition metrics and completed events, while the Total Index in Figure 3 and Figure 4 exclude canceled events.
On May 24, CEIR released the 2022 CEIR Index Report, which analyzes the 2021 exhibition industry performance and provides an economic and exhibition industry outlook for the next three years. For more information and to access the complete 2022 CEIR Index Report as well as individual sector reports, go here.
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Partner Voices
Less than six months ago, Lisa Messina joined the Las Vegas Convention and Visitors Authority (LVCVA) as the first-ever chief sales officer after leading the sales team at Caesars Entertainment. A 12-year Las Vegas resident, Messina is a graduate of Cornell University’s School of Hotel Administration and serves on MPI International’s board of directors.
TSNN had a chance to catch up with this dynamic leader and talk to her about her vision for the new role, current shifts in the trade show industry, creating more diversity and equity within the organization, and advice to future female leaders.
Lisa Messina, Chief Sales Officer, LVCVA
With Las Vegas becoming The Greatest Arena on EarthTM, what are some of the things you’re most excited about in your role?
Our team was at The Big Game’s handoff ceremony earlier this month, and I couldn’t help but think, “We’re going to crush it next year!”
These high-profile events and venues not only drive excitement, but also provide unmatched opportunities for event planners. Allegiant Stadium hosts events from 10 to 65,000 people and offers on-field experiences. Formula 1 Grand Prix will take place in Las Vegas in November, after the year-one F1 race, the four-story paddock building will be available for buyouts and will also offer daily ride-along experiences that will be available for groups. And, of course, the MSG Sphere officially announced that it will open in September, ahead of schedule, with a U2 residency. It’s going to be the most technologically advanced venue as far as lighting, sound, feel, and even scent, and it will be available for buyouts and next-level sponsorships inside and outside. There’s no ceiling to what you can do when you’re doing events in Las Vegas.
Allegiant Stadium
As the trade show and convention business returns to the pre-pandemic levels, what shifts are you noticing and how do you think they will impact the industry going forward?
Our trade show organizers are very focused on driving customer experience. Most of our organizers are reporting stronger exhibitor numbers and increased numbers of new exhibitors, with trade shows proving to be almost or above 2019 levels. Now our organizers are really doubling down on driving attendance and focusing on the data to provide that individualized, customized experience to help attendees meet their goals and get the best value. Some companies continue to be cautiously optimistic with their organizational spend when it comes to sending attendees, but I think it will continue to improve. As the U.S. Travel Association makes more progress on the U.S. visa situation, we also expect a growing influx of international attendees.
What are some innovative ways the LVCVA helps trade show and convention organizers deliver the most value for their events?
We focus on customer experience in the same way that trade show organizers are thinking about it. We got rave reviews with the West Hall Expansion of the Las Vegas Convention Center (LVCC), so over the next two years, we will be renovating the North and the Central halls, which will include not just the same look and feel, but also the digital experiences that can be leveraged for branding and sponsorship opportunities.
Vegas Loop, the underground transportation system designed by The Boring Company, is also a way we have enhanced the customer experience. Vegas Loop at the LVCC has transported more than 900,000 convention attendees across the campus since its 2021 launch. Last summer, Resorts World and The Boring Company opened the first resort stop at the Resorts World Las Vegas , with plans to expand throughout the resort corridor, including downtown Las Vegas, Allegiant Stadium and Harry Reid International Airport. The LVCVA also purchased the Las Vegas Monorail in 2020, the 3.9-mile-long elevated transportation system that connects eight resorts directly to the convention center campus. This is the only rail system in the world that integrates fares directly into show badges and registration. For trade show organizers, these transportation options mean saving time, money and effort when it comes to moving groups from the hotels to LVCC and around the city.
Also, the more we can focus on building the infrastructure around the convention center, the more it supports the customer experience and ultimately supports our trade show organizers. Scheduled to debut in Q4, Fontainebleau Las Vegas will offer 3,700 hotel rooms and 550,000 square feet of meeting and convention space next to LVCC.
What are some of the plans for advancing DEI (diversity, equity and inclusion) within your organization?
We’re currently partnering with instead of working with a leading consulting firm, to lay the foundation and create a solid DEI plan and be the leader when it comes to DEI initiatives. The heart of that journey with the consulting firm is also talking to our customers about their strategic approaches to DEI and driving innovation in this space.
What are your favorite ways to recharge?
My husband and I have an RV and we’re outdoorsy people. So, while we have over 150,000 world-class hotel rooms and renowned restaurants right outside our doorstep, one of my favorite things to do is get out to Red Rock Canyon, the Valley of Fire, and Lake Mead. Five of the top national parks are within a three-hour drive from Las Vegas, so there’s a lot you can do. We love balancing the energy of Las Vegas with nature, and we’re noticing that a lot of attendees add activities off the Strip when they come here.
Valley of Fire
What advice would you give to women following leadership paths in destination marketing?
I think it’s about being laser-focused on what you want to accomplish; building a team around you that lifts you and helps you achieve your goals; and being humble and realizing that you do it as a group. No one gets this done alone. Thankfully, there are a lot of women in leadership in this organization, in our customers’ organizations, and in this city that we can be really proud of. We’re a formidable force that is making things happen.
This interview has been edited and condensed.
This article is exclusively sponsored by the Las Vegas Convention & Visitors Authority. For more information, visit HERE.
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