Tax break helps city make exhibition of itself

As the global economic crisis casts a pall over some of Catalonia’s most important industrial sectors, small victories are being celebrated as if they were resounding triumphs. The fact that this year’s Automobile Fair is going ahead as planned in Barcelona is a case in point. After the cancellation last month of next year’s biennial London Motor Show, there were fears that the city’s own “Salon Internacional de Automovil”, held every two years in May, would suffer the same fate.

After all, as the centre of automotive assembly in Spain, Catalonia is acutely aware of the devastating impact of the crisis on Spanish car sales, which have fallen by nearly half, and production, where thousands of workers have either been laid off or had hours and pay reduced.

With the car show on the brink of suspension, Spain’s central government came to the rescue with a tax break that not only convinced manufacturers to exhibit, but drew direct sponsorship from some of the region’s biggest non-automotive companies.

By declaring tax-deductible expenditure by exhibitors and sponsors on any advertising related to the fair, authorities appear to have rescued the show. The tax break is contingent on the use of the “Salon International de Automovil” logo in all such advertising, meaning the event gets a much-needed promotional boost. “The crisis is a reality, and a very hard one at that,” says Josep Lluis Bonet, chairman of  the Fira de Barcelona, th e public privates ector joint venture that manages the city’s exhibitions halls and events. “But it is also true that in this moment, companies have to be sharper than ever, look harder for sales, and become more competitive. In this sense, trade fairs have a lot of offer.”

While regular trade fair participants would probably agree, the costs of travelling, contracting exhibition space and mounting stands has become a luxury for many small and medium-sized businesses and, as the London Motor Show case shows, large multinationals as they look to cut costs.

Organisers reported a 10 per cent drop in participation at this month’s Tourism Fair, while attendance at Construmat, Barcelona’s signature business-to-business fair for the construction industry, is likely to be hit hard by the dramatic downturn in Spanish homebuilding, and sector malaise around the world.

However, for companies who can still follow the exhibition circuit this year, the crisis throws up new opportunities, according to Jose Luis Nueno, marketing professor at the Iese business school. “Most trade shows are about making contacts, checking out the competition and  finding new suppliers,” he says.

Although there will be notable absences at many fairs this year  many participants have ceased to exist, for a start – there haveso far been no cancellations. According to Turisme de Barcelona, the city’s tourism promotion office, the same goes for the heavy programme of conventions and congresses.

The Association of British Travel Agents, to name but one, has chosen Barcelona for this year’s annual congress, which is often held in the Canary Islands. Organisers were convinced by generous local sponsorship and free use of the city’s International Convention Centre. The city is also gearing up for the inaugural World Innovation Summit, a three-day trade fair and speakers’ symposium in June which organisers say will bring together the most innovative people, companies and ideas in the world. Despite Catalonia’s deep roots in textiles, farming, industrial design and tourism, Barcelona has been keen of late to project an image of itself as a centre of technological innovation. The role of the Fira de Barcelona to this end has been vital.

The continuing success of the annual Mobile World Congress, recognised as the most important gathering of wireless telephony operators and product makers in the world, has made the city synonymous with the latest industry gadgets and technology. Similarly, Barcelona, with its history of medical research and world class hospitals, has also become the global centre of conferences for specialists such as cardiologists and gynecologists.

Along with many important industrial cities, Barcelona has a long and colourful tradition of trade fairs, starting with its hosting of the Universal Expositions in 1888 and 1929. Fira was formally established in 1932, as the city’s handsome exhibition complex was built at the base of Montjuic Mountain, south- east of central Barcelona.

Today the zone boasts 165,000 sq m of usable pavilion space and a further 50,000 sq min the open air. Two years ago, Fira inaugurated a further 200,000 sq m of space in nearby Gran Via, consolidating one of the biggest exhibition spaces in Europe. Fira boasts a portfolio of 80 different shows, bringing together an estimated 40,000 companies. This expansion reflects the importance of trade fairs and congresses on the city’s economy.

According to one study by the Fira, the direct and indirect impact equates to about €2.5bn a year, after accounting for spending by participants inside and outside the exhibition space, business arising as a result of new contacts made, and workers’ wages.

Considering Fira´s revenues last year of €122m, up 17 per cent on the comparable 2006, the multiplier effect is considerable.“Trade fair is very potent a instrument of innovation,” says Mr Bonet.

“They act as dynamos on society, on companies and on the economy. However, the trade fairs themselves have to be constantly innovating. In these difficult times, Fira has to redouble its efforts just as any company would.”


Article published in Financial Times, April 29th, 2009

Download full article: Financial Times – Special Report Barcelona (2009)

Tags: , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *