Poised to Bounce Back in Hong Kong
By Steve Shellum, Publisher/Editor, HOTEL Asia Pacific
November 2003 - Daniel Cheung knows how it feels to be caught well and truly between a rock and a hard place. The general manager of HOFEX organisers Hong Kong Exhibition Services had to make many tough calls when SARS devastated the industry – just a couple of months before the mega hospitality show was due to take place.
Should the show go on, be postponed or cancelled altogether? After nearly two years of intense planning for the biannual event, which was scheduled to take place from May 6-9, 2003, it quickly become obvious to Cheung and his advisory team that there was no way the event could go on as planned.
They decided to reschedule for July, praying that the outbreak would soon be contained and that business would get back in gear. In mid May, when it became painfully obvious that this was not going to happen, Cheung had to make the tough decision to call the whole thing off, at least for this year.
It was eventually announced that HOFEX would be rescheduled to February 10 2004 – just weeks before its sister biannual show FHA, which takes place in Singapore from May.
Three days later, the World Health Organisation (WHO) lifted its travel advisory against Hong Kong.
“Several senior hotel executives challenged our decision, saying it was really bad for Hong Kong and that the industry should be showing its support,” says Cheung.
“The Tourism Board also called to see if we could hold the show in July as a symbol of revival of the industry, saying they wanted HOFEX to be held as soon as possible after SARS."
“They were pushing for us to reschedule it for later in the year but, as we explained to them, that was not possible for a number of reasons."
“It is not a local show - it’s an international event with more than 30 national groups that have to ship their products to Hong Kong at least 45 days in advance. If we could not guarantee that there would be a rescheduled show in mid July, then it didn’t make sense for them to ship everything here.
“In fact, we had already received some freight
containers from exhibitors for the originally scheduled event, and we had
to pay the cost for handling and storage because it was not their fault
that the event had to be postponed – it was not our fault, either, but
- as a good partner of our exhibitors - we agreed to share the costs.”
The other message coming in loud and clear from exhibitors was that they had pretty much written off Asia for 2003. “They talked about how much they had lost for the year, and believed it would take at least six to eight months for the Hong Kong market to recover.
“Hotels had stopped buying – they didn’t have the money and were already telling suppliers they wanted major discounts on orders already made or they would not get the business. Many projects and renovations had also been suspended, and hotels and restaurants were just not buying.”
The basic message from both buyers and sellers was: “If you have a show, we might come and support it, but don’t expect any business.”
“They were not in the mood,” says Cheung. “The sentiment in June and July was one of worry - people didn’t know how much they had lost or when business would come back. They didn’t want to talk about exhibitions.”
Cheung tried to reschedule for the end of the year, but the Hong Kong and Convention and Exhibition was already booked solid from other rescheduled shows.
“We took advice from some of the leading groups, who suggested we looked at holding the show in 2004. They told us to forget 2003, write it off, and to look at the first half of 2004 to really serve the market as it rebounded.
“HOFEX is a must-attend event for them, and they were worried that we might just cancel the whole thing, leaving a four-year gap between shows.”
The problem, though, was the fact that FHA was also scheduled for the first half of 2004. Cheung agrees that FHA is traditionally a bigger show than HOFEX – more mature, sophisticated and developed. “FHA will be the largest ever this year, and some exhibitors have cancelled from HOFEX because of it. That’s no problem, they will receive full refunds.
“But, most exhibitors know very clearly that the visitors/buyers who register for HOFEX and FHA are almost totally different. We carried out a survey comparing visitor data after HOFEX 2001 and FHA 2002, and there were no more than 300 overlapping buyers – which is pretty insignificant for such big shows.”
Cheung points out that more than 50% of FHA buyers come from Singapore, Malaysia, Indonesia Thailand and Australia, while the majority of HOFEX buyers are from China, Hong Kong, Macau, Taiwan, Korea and the Philippines.
“Exhibitors know this very well and, although no one wants the hassle of doing two regional shows within a couple of months, business is business. You either attend, or give up the market and let your competitors take it away from you.”
With the strong rebound from SARS, Cheung has been receiving very strong feedback from national groups and regional exhibitors.
In terms of size, Cheung is hoping to achieve up to 9,500sqm, compared to the 11,000sqm that had been booked before SARS hit in March. He is estimating up to 1,500 exhibitors, including 32 national groups.
“Some groups, including Japan, used their 2003 HOFEX budgets for other events and don’t have the budget for 2004. We lost some groups, but that’s life.”
Storage charges between Hong Kong and Singapore have been waived for exhibitors who attend both HOFEX and FHA, and they will also enjoy a 15% discount on freight charges and more than 25% off hotel rooms.
All supporting events are going ahead - including the regional GM Forum, with up to 150 participants, and the F&B Forum.
Cheung estimates that the postponement has cost organisers more than HK$10 million, but says much of that will be covered by insurance.
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Hotel Asia Pacific
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