Time for the patience of an Ox
irst and foremost , I hope all our readers have made a healthy and successful start to the New Year 2021 and I send greetings from Asia , too , on the Chinese New Year ( of the Ox )!
Whether the New Year will , ultimately , turn out to be a Happy one is the big question that we all hope will be answered positively .
The situation is , certainly , different compared with the beginning of last year and there are several vaccines approved by various authorities . Israel made a flying start to vaccinating its population and also the UK and USA are progressing fast with their programmes , among other countries .
While the second wave forced many EU countries to lock down again , likely until the end of winter at least , over in Asia a second wave is also perceptible . Tiny clusters of Covid were again found in Beijing , and Malaysia , Indonesia , Thailand have all experienced increasing infection levels again due to the colder weather .
International tourism , business travel and hospitality business remained negligible .
So , will 2021 be a Happy Year for our international exhibition industry ?
I fear we will not see any significant improvement much before September 2021 . We need to keep in mind that 60 % of the population must be vaccinated if we are to even slowly relax the hygiene and distancing rules and resume limited international travel .
Rapid testing has not been taken up for travel or for the exhibition industry , so it does seem we will all have wait for the shot .
In Asia , I can ’ t really see us overcoming the logistical challenge of convincing more than a billion Chinese or Indians to get vaccinated within six months . For the EU I can envisage 60 % of the populations being vaccinated by the end of Q3 and thus preventing another hard winter there . EU organisers will , I fear , be postponing their shows to Q4 2021 or 2022 . Many Messen will suffer dramatic losses . Frankfurt ’ s recent drop in turnover to US $ 250m instead of US $ 800m is likely to be repeated elsewhere .
With 80 % of the traditional exhibition organisers in capital crunch difficulties , this year is likely to bring no quick improvement .
Organisers Tarsus and Hyve have continued to make minor acquisitions - in the USA and China , and Emerald announced two small acquisitions at the beginning of January .
I would expect equal bravery from Informa Markets and DMG and Chinese buyers seem ready to enter the global scene with plenty of capital in hand . They could seal a deal with a major global player .
Private equity backed companies will be cautious and will likely wait for the first cash to be generated before changing to spending mode – not likely , in my view , before Q4 2021 .
In the meantime , Asian sellers are aware of the credit crunch on the buyer side and seem to be changing their attitudes . I keep hearing sentences like “ I ’ m not sure if they can pay us in time or
Björn Kempe , CEO ExposAsia
make changes in future …” or “ Don ’ t you think Chinese buyers are better and can pay more ?”.
This is a completely changed picture compared with prepandemic . Another change I have noticed is that not only the multiples have come down to currently 6-7.5 , but also the payment terms have significantly changed . Very often when the deal is made there is only a maximum 30 % down payment given . The rest is all performancebased over 2-3 years .
With the end of the pandemic I would expect that many businesses will get back to levels of their 2019 results only by 2023 / 24 . Since the world will be starving for physical events , 2023 should at least be a golden year . Once cash is being generated again the buyers should return .
Meanwhile , in the Year of the Ox , the patience of that beast can be a virtue in riding out the storm , but strike a balance and don ’ t wait too long for that great deal !
www . exhibitionworld . co . uk Issue 1 2021 29