2001: Business - Show owner grows despite Vegas setback
By JOHN STEINBREDER
Three years ago, Reed Exhibitions virtually was unknown in the golf industry after it had paid $120 million to the PGA of America for the group’s two trade shows.
Since then, the trade show company has become one of the biggest players in golf. It not only owns both the PGA Merchandise Show (held in Orlando, Fla.) and the PGA Fall Expo (currently in Las Vegas) but also has purchased two other golf trade events – the Ontario PGA Show in Canada and the PGA Merchandise Show of Australia – and started Premiere Golf, an exhibition based in Marbella, Spain.
Yet, many in the golf industry wonder exactly who it is and how it has been doing.
Prior to the summer of 1998, Reed – which organizes 440 trade and consumer shows around the world – had no dealings in golf.
“But we wanted to take our expertise in running trade shows and apply that to the PGA shows, making them stronger events and also using the brand and Reed’s international infrastructure to do similar events overseas,” says Chris McCabe, the vice president and show manager for the PGA exhibitions.
A subsidiary of Reed Elsevier PLC, Reed Exhibitions generates $900 million in annual revenues from events in 49 industries in 30 countries. The division that handles the golf shows, Reed Exhibitions North America, is based in Norwalk, Conn., and holds about 70 events per year that cater to 40,000 exhibitors and more than 1 million attendees.
There are some in the industry who feel that Reed paid too much for those first two PGA shows, especially considering that Vegas was at its peak when the purchase was made and has since fallen sharply in terms of participation and importance. “They bought at exactly the wrong time,” one longtime exhibitor claims. “And I am sure Reed wishes it never got Las Vegas.”
But company executives disagree.
“We are very happy with the acquisition,” says Tony Calanca, a senior vice president at Reed Exhibitions. “We are well on our plan financially and strategically, and well ahead of it in terms of developing a presence in other markets. We are nothing but pleased.”
There is little debate that Orlando has continued to do well under new ownership; it remains the biggest golf trade show in the world, attracting more than 1,500 exhibitors who occupy 700,000 square feet of booth space, about 40 percent more area than when Reed acquired it. And though no one at the company will give exact figures, it is said to produce solid profits.
But Las Vegas, which sources say breaks even at best, is another matter.
“It’s been a disaster,” claims one golf executive. “None of the equipment makers go there anymore, and as Orlando has gotten bigger, Vegas has gotten smaller.”
Adds Randy Romberg, director of marketing for Cleveland Golf: “As far as we are concerned, there is no real need for that show.”
Las Vegas definitely has gotten smaller. The year before Reed took it over, there were roughly 1,000 exhibitors and more than 300,000 net square feet floor space; now, it has 600 exhibitors and about 110,000 net square feet. The question is: Why?
“People have often described the stock market in its most bullish state as being a case of irrational exuberance, and the same could be said about Vegas at its peak,” says McCabe. “The event quickly grew from a regional exhibition to something as large as Orlando, and suddenly it was being compared to that as well. But time has proven that you cannot have two No. 1 shows, and a number of the bigger exhibitors pulled out. So we are going through a bit of an evolution at the moment and trying to find its right size.”
The right size is probably as a regional show, and Reed has done a number of things to move it in that direction, trying in the process to regenerate enthusiasm for the event. For example, the company changed the name last year, from PGA International Golf Show to PGA Fall Expo, and later capped booth size to help keep down the cost of exhibiting. Reed also has introduced a number of educational programs as well as off-site/on-course product demonstration programs in hopes of making it more of a must-visit.
Most recently, the company decided to move the show dates to early August and rotate the venue among different cities; Reno is the site next year, and San Diego after that.
“We have learned over time that a show that is flexible with venues can be that much more appealing to exhibitors and attendees,” says McCabe. “They like the change of pace. Also, the new name speaks to the regional nature of the show, and all we are trying to do with it.”
McCabe and his troops get high marks for trying to revive and revamp the Vegas show, and it is only one of the many things they do that elicits praise from exhibitors.
“They are well-organized, and they do some good work,” says Scott Hennessy, chief executive officer of True Temper. “For example, they relocated the Australian event from the Brisbane area to Sydney this year, opened it up to consumers for the last day or two and by all accounts had one of the best shows there ever.”
Ed Abrain, the president of Titleist, agrees.
“Overall, we are pleased,” he says. “We think the company looks after our interests as best they can, and they are timely, communicative and organized.”
Jim Awtrey, the executive director of the PGA of America, feels much the same way.
“I think the shows are doing wonderfully well,” he says, adding that while his association no longer has equity in the two U.S. events, it remains very involved through a long-term partnership agreement with Reed. “And the new owner is better able to react to changes in the marketplace, such as the ones you have with Vegas, because they know trade shows so well. They can do things we never would have been able to because that is their business.”
Of course, not everyone is completely happy. Romberg is one of many who believe the market would be better served by having one major show in November, instead of two spread out in August and January. “We tell that to Reed, and we get frustrated sometimes because we feel they are just not listening to us on that,” he says. “Other than that, though, they do a very good job.”
McCabe agrees that Reed could do some things better.
“A couple of years ago we sold exhibitors space in meeting rooms in Orlando, and that went horribly because they didn’t get the traffic they wanted,” he says. “And last year at Vegas we had a cyber-theater where companies could demonstrate their online capabilities, but that flopped as well. We have made mistakes, but for the most part, I think we have done very well. We have a lot of ideas, we have a lot of resources, and we have the golf industry’s best interests at heart.”
McCabe also has some plans for the future.
“We could do a consumer golf show,” he says. “Or we could find ways for the important equipment companies to partner with us more than a couple of times a year. Perhaps we could set up relaxation booths at other industry trade shows, where attendees could take a break by hitting some balls into a cage on the floor, a cage that features the latest products from a golf company. We have six major trade shows in Chicago, and that’s right in Wilson’s back yard. Maybe we could get them to do something like that.”
A lot has happened since 1998. And McCabe hopes Reed can do even more in the future.