This issue’s focus is on several important issues facing general contractors (GCs), companies “officially” designated by show management to provide labor, equipment and services to exhibition managers and exhibitors at an event.

By contrast, an independent contractor, also called an exhibitor-designated contractor, is any company other than the “official” contractor designated by show management and hired by the exhibitor to provide event services, including I&D, photography, floral arrangements, models/demonstrations, audio-visual, electrical, etc.

Familiar with the key people who manage shows, GCs work hand-in-hand with event managers, and do everything from I&D and drayage to hanging signage and banners, laying carpet and providing booth furniture. GCs also help clients avoid costly on-site modifications by keeping up the rules and regulations - often subject to updates and new legislation - that affect show construction and preparation.

Nevertheless, GCs face challenges both old and new. Through interviews with two industry executives, this article explores five major issues facing GCs today: typical misunderstandings that arise between GCs and exhibitors; bundling; the trend toward smaller venues and away from mega-events such as E3; and the possibility of convention center involvement in materials handling.

Misunderstandings between GCs and exhibitors

Bill Nixon Jr., president of Easton, Mass.-based Teamwork Labor Services Inc., a GC/I&D company, said a careful reading of the show kit can help prevent many of the common misunderstandings between general contractors and exhibitors. He said Teamwork has a fully staffed customer service department ready and willing to answer all questions exhibitors have about their kits.

“All too often, exhibit managers are so strapped for time, they don’t have the luxury of thoroughly reading the show kit,” Nixon said. “If that’s the case, they may misunderstand deadlines, shipping instructions, or rules and regulations.”

Fortunately, technology has come to the rescue: Nixon said online capabilities for floor plans and show kits are helping eliminate confusion and saving exhibit managers a good deal of time. “By allowing exhibitors to order services online, we have simplified their lives, saving them time and aggravation,” he said. “And we fully believe that the more educated exhibitors are, the better their experience will be at the show.”

The Stress Factor

But misunderstandings still occur and generate stress on both sides.

“There’s a tremendous amount of stress for both the GC and the Exhibitor,” said Sal Longhitano, vice-president of sales and marketing for New York-based National Convention Services, LLC. (www.ncsevents.com), said, “There’s a strict window of time for the exhibitor to prepare for the show, and also for us to move the show in and out,” he explained. “That can generate a lot of frustration on both sides.”

Longhitano said the solution comes down to communication.

“Exhibitors need to understand that most GCs are aware of and do care about the huge expense it involves for the exhibitor to attend a show,” he said. “But there’s often a feeling that the GC or someone working for the GC just doesn’t care. What’s crucial to keep in mind is that many people in the GC’s employ are union workers. They don’t work for the GC on a regular basis, so it’s important for an exhibitor to stay in touch with someone from the GC’s management team, especially when there’s something the exhibitor needs and he believes it isn’t being provided.”

Longhitano agrees that online access to floor plans and show kits online is a boon to both exhibitor and GC. “It speeds up input from exhibitors and allows them to be interactive with us,” he explained. “For a number of private and special events, they can go in and change floor plans themselves rather than wait for one of our designers to do it. It speeds up the process and the exhibitor often gets more of what he wants.

Bundling

Bundling for exhibitors has been defined as combining different types of services and products into one package, leveraging some costs into other costs.

“Teamwork does not and will not bundle services,” Nixon said. “It’s a very dangerous practice that’s going on in the world of general contracting. By engaging in this practice, general contractors are flirting with disaster, since they’re inviting scrutiny from the federal government. It’s a flat-out violation of anti-trust laws,” he stated.

Longhitano stopped short of outright condemnation of the practice, but he clearly has concerns about its ethics and legality, depending upon exact circumstances.

“I’m not a big fan of bundling or packaging,” he said. “It’s a way to try to capture business you didn’t have. And because there’s usually a discount structure involved, you may be turning profitable business unprofitable, and reducing its quality when you package it with other services.”

Asked if such bundling is restraint of trade or merely healthy business enterprise, Longhitano said, “Depending on what you’re bundling and how it’s bundled, it can be restraint of trade. For example, drayage is an exclusive service, so combining it with other services at an overall discount when other companies can’t provide drayage, gives an unfair advantage.”

He added, “If you’re doing your job properly and pricing your services properly, there should be no need to bundle. When you’re the GC, it’s easier for an exhibitor to use you for all the services. National Convention Services’ belief is that if you service your client, do your job right and price it right, you won’t need to scheme to get the business.”

The trend toward smaller venues and away from mega-events (like E3)

“Teamwork sees this trend as a huge opportunity instead of a negative,” said Nixon. “Many other general contractors aren’t positioned to handle the high level of customization, account management and customer service demanded at some of these smaller events. And many of these customers are Fortune 500 companies, used to the red carpet treatment. They don’t want just the standard tradeshow look and feel. They want something different, new and exciting, and they want the audience to be wowed. By offering boutique-style services, we can help them achieve that wow factor. We’re excited by this trend and we’re perfectly positioned to handle client needs.”

Longhitano also found a silver lining in the trend toward smaller shows:

“It substantially reduces revenues generated from a show the size of E3 when it downsizes, but it can create opportunity for new business,” he said. “Depending on the scope of the show, it may create rental opportunities for properties, plus larger scale audio/visual and media planning. And if a GC wants to adapt, it could also present opportunities for involvement in event planning and managing hotel and registration for the event.”

He also mentioned a spin-off effect.

“When a show the size of E3 downsizes, it gives way for new events to develop,” he said. “Spin-off shows and smaller lateral shows come in. Comdex went away, but now you see strong growth in the satellite entertainment shows and home computer entertainment shows like CEDIA.”

The possibility of convention centers going into the materials handling business

“We’ve seen this in the past, but we don’t see it as a trend going forward,” Nixon said. “That’s partly because of the complicated logistics involved and partly because of insurance requirements. Also, we feel convention centers should focus on what they do best, which is to provide venues, and let us handle what we do best, which is to handle the onsite logistics.”

Longhitano agreed. “In the interest of the exhibitors, I hope convention centers won’t try to manage the handling of materials and the responsibilities of a GC,” he said. “Moving a show in and out is very complicated and isn’t the business of a convention center.”

He said quality of service at a venue typically matches level of competition, and that the very presence of a monopoly means there is no motivation for that company’s employees to work any harder or try to service clients any better when they can take the attitude that the clients have no other choice. The result, Longhitano said, is typically a pronounced decrease in the level of service.

“If you look at any closed hall in the country, Boston and Cleveland for example, exhibitors are reluctant to go there,” he said. “That’s because they know they’ll have a much harder time in those cities because the level of service in them is minimal compared to what they can get in open cities.”

Further, he said that since most centers are either state- or city-owned and their purpose is to generate hotel stays and to rent space, there’s no benefit to either shows or exhibitors for the centers to become involved in the management of materials handling. “It would neither reduce costs nor improve services to the exhibitor,” Longhitano stated.

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Article appears in Exhibit City News

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