Germany’s Exhibition Industry at a Crossroads: Transparency or Status Quo?

Crowd of business people walking in a modern hall at a trade show

Skift Take

Germany's exhibition industry might be on the brink of a transformative upheaval as it grapples with calls for transparency and potential regulatory disruption.

The German exhibition industry faces a potential upheaval. Some consider long overdue reforms, while others view them as a threat to a well-established system. This conflict arises from the growing scrutiny over how “Messes”—the German term for trade fairs—operate and are regulated in Germany. A recent article in the German business and financial newspaper Handelsblatt raised the alarm.

The German competition authority Bundeskartellamt is taking a closer look at the country’s exhibition sector. It is responding to allegations from private exhibition organizers that the “Messes,” which are publically owned, favor themselves regarding the availability of dates for shows they organize themselves, a widespread practice in Germany across all its “Messes.” In addition to date availability, they are also accused of benefiting from lower hall rental prices.

Lack of Level Playing Field

The heart of the issue is transparency—or the lack thereof. “Messes” act as both venue owners and event organizers, leading to conflicts of interest when allocating show dates.

Also under scrutiny are the large subsidies given to the “Messes” during the Corona pandemic. In the article, German exhibition industry expert and CEO of JWC Jochen Witt estimates that direct and indirect subsidies of around one billion euros may have flowed to “Messes” during the coronavirus pandemic.

Skift Meetings spoke to Witt, previously the CEO of one of Germany’s largest convention centers, Koelnmesse. He provided an insider’s perspective on the challenges and opportunities this potential disruption presents.

“If it is true that private organizers are disadvantaged by the fact that their competitors have the venue and the organizing business, then the antitrust authorities might want do something about it,” said Witt.

Exploring Possible Solutions

According to Witt, the crux of the matter lies in the same legal and financial entity both managing the venues and putting on the trade shows. Witt suggests that Messe Frankfurt has set a precedent with a clear division between venue and organizing entities. However, he acknowledges that this might not suffice in the eyes of the law.

This situation mirrors earlier reforms in other industries like telecommunications, suggesting a pattern that the exhibition sector could face a similar unbundling next.

A looming question goes beyond just show dates. The lack of clarity on whether subsidies go toward venue maintenance or the organizing business further muddies the waters.

Witt’s seasoned perspective is not without skepticism towards the capacity of antitrust authorities to untangle this web. He casts doubt on their ability to navigate the intricate industry practices. “Slot allocation is mainly driven by market requirements, and it’s so complex that I cannot imagine that antitrust authorities would be able to solve it,” he said.

The Potential Impact on the German Exhibition Industry

Furthermore, Witt recognizes the potential for industry disruption should the proposed changes come to fruition. New players could enter the market, and established players would have to adapt. He sees clear benefits to such a restructuring. A more open market could lead to partnerships that foster innovation and growth.

“When I was CEO of Koelnmesse, I advocated for the separation of the venue and the organizing business. Why? Because I always thought if we split the venue and the organizing business, it is much easier for us to find an international partner for the organizing business wth a strong portfolio, which could then also benefit the venue business,” Witt elaborates.

Witt is optimistic, hinting that a more transparent and competitive exhibition landscape in Germany could reinvigorate the industry despite the rocky road ahead. “I think the market will be more open,” he speculates, adding that “it would be beneficial for the industry.”

This potential shake-up in the German exhibition industry warrants a close watch. The outcomes could range from leveling the playing field to outright disruption. The implication is clear: change is on the horizon. It’s bound to be complex and contentious but may also be a catalyst for innovation.