Enhancing Stakeholder Value Enables Show Growth Endorsed by: Advocacy Committee Our Objective for this presentation is to Educate you(show organizer) on your exhibitors experience at your show Educate you on how the exhibitors are actually getting charged at your show vs. what you may think is published in your show kit Association or Show Organizer Needs Solutions and Recommendations

Meeting Objectives Exhibitor Need ROI-Show Service Cost Justification Lack of audited attendee data Association or Show Organizer Need Sell out space Sponsorship dollars Minimize cost to operate show Solutions/Recommendations Progressive General Service Contracting Models Case Studies of Existing Shows

Society Ecosystem General Service Contractor (GSC) Charges exhibitors to make up for discounts to society (electrical, rigging, material handling, etc.) Exhibitors Decrease space, logistical costs go up to cover discounts $ Society Revenue Membership Registration $’s Exhibit Space Industry Sponsorships GSC Discounts on meeting logistics Exhibitors are competing for funds vs. other marketing channels Often Exhibitors commit to booth size before costs are known Exhibitors are being challenged to do more with less Procurement is asking vendors to cut costs Rate of increase – can not continue Associations/Organizers negotiate Exhibitor costs (>60% of Exhibitors’ convention budget) Societies Request more from exhibitors in sponsorships, and raise sponsorship rates for tech suites, etc.

Association /Show Data Dramatic increase over 10 year period-1999-2009 Definition of Drayage/Material Handling: Short distance movement of goods or materials within a storage area, involving loading, unloading, palletizing, de-palletizing, etc. Very important to explain this slide: These are the average rates for Drayage (Material Handling), ST labor, OT labor and DT labor taken out of the TS week annual survey and then compared to the union actual cost increases over same time frame and the CPI over same time frame. Sources: Retail Rates - 1999 and 2009 TS Week Survey Reports Los Angeles, Chicago, and Las Vegas Labor Costs – Union Contracts

Association/Show Data Add the drayage bar from slide 12 so it could be 57.5-129.38 percent increase * Source: 2009 and 2013 TS Week Reports for general labor cost and drayage per CWT crated direct to show. * Source: Local Union Contract * GC averages from San Francisco, Los Angeles, Chicago and Las Vegas. These costs are for all contractors whether GC or EAC.

Why all the additions to drayage? 259%

Convention Cost Breakdown Actual Data from large Healthcare Company This as compared to the industry averages that CEIR posted in August of 2012: 36% Exhibit Space, 17% show services which include drayage and labor, 14% is travel and entertainment, exhibit design 11% and shipping is 10%. Over 30% of costs unknown at time of booth space contract Show Organizer negotiate 67% of costs (exhibit space, labor, & drayage) *Other Exhibit Related Includes: Customer Education, Direct Mails, T & E, Promotional Items, etc.

GSCs Business Model Shift Now in the design, build and rent business Tie in exclusive services – to corporate clients Shifting costs to exhibitors who do not use them for non exclusive services; result is uneven application of exclusive service charges. Discounts/Rebates given to win the entire corporate program Results: Reduced competition Negatively impacting the industry Associations unaware of the discounts given No benefit to association Exhibitors now need help from the show organizer to control and manage these runaway costs on exclusive services They are willing to invest more in sponsoship and space if the costs are justified

Solutions Game Changers – Material Handling Pay for material Handling on time & materials basis – incorporate into exhibit fee: Auto Industry Bring exclusive services (drayage) in-house: PMMI Eliminate all surcharges (overtime and special handling) – incorporate blended rate: AHA, APSC, AAPC, AFCOM Charge per trip or based upon time & materials vs. weight: Several Corporate Events Add David Audrain’s show into the equation

Solutions More Game Changers Stop cost shifting - pay full price for services, just as exhibitors do (vested interest) Incorporate costs for discounted items (aisle carpet, signs, etc.) in exhibit space fee rather than into drayage fees Share costs for discounted items amongst all GSCs & EACs Bring general contracting in-house - control rates and service levels Freedom of choice - eliminate exclusives; bring in competition Needs to be transparency in pricing Need to eliminate 0 balance invoice from General to Show Organizer-will be surprised at how low this cost is in comparison to the increases in exclusive service cost by the general contractor.

Thank you! Ultimately we are proposing that the Exhibitor is willing to spend more on sponsorship and space if they can justify the cost to senior management. Currently the costs are unjustified.