Björn Kempe offers a view from Southeast Asia on the curse of coronavirus.
Through my office in Shanghai and activities in Asia, I was alerted as early as January that something immense and disruptive was brewing. The extension of the Chinese New Year holidays confirmed my fear that this was only the beginning of a global outbreak of a new virus.
Tradeshow organisers were quickly forced to cancel or postpone shows in China. Subsequent travel bans, quarantine measures and many other government-related policies made it impossible to continue business as usual.
Writing now in the last third of March, the virus has affected most of the world.
Thanks to strict quarantine measures the virus appears to be peaking in China, at least with the numbers of those recovered outnumbering the newly infected. However Europe, the Middle East, Africa and the Americas are being severely affected and the virus is surely far from peaking globally. I wonder whether most Western nations should question whether their governments did the right thing at the right time?
While European nations were looking at Asia and thinking ‘thank God it’s in the East’, nobody much thought in January or February to prepare properly for what has come in March.
Beside unprepared populations and governments, can we as the MICE industry say we’ve been prepared? I don’t think we can.
In Europe the first big show to be cancelled was Mobile World Congress in Barcelona, despite there not being any confirmed cases of Covid-19 there at that time.
That was quickly followed by the Frankfurt Lighting Fair, ITB in Berlin, the Leipzig Bookfair, several famous shows in Duesseldorf (Prowine, Beauty etc) and many others across a swathe of countries.
Shows were cancelled days before opening. Reasonable? Not in my eyes. Again, it was the politicians deciding what MICE industry players had to do and not the industry itself.
A ‘Black Swan’ is a phenomenon on stock markets that describes unforeseen events that impact heavily on bull markets. We had ten wonderful years but, yes, Covid-19 is the Black Swan with stock markets crashing significantly in recent weeks.
Emerald Exhibitions’ stock price is one example, losing around 65% of its value in the month to 14 March and many other public listed exhibition companies’ stock prices tumbling.
Many family companies and small organisers have realised how quick their annual results can be affected. I foresee a very active Q3/4 for M&A globally - USA and Asia ahead of Europe and I expect a few consolidation deals among the Top 20 organisers.
The Covid-19 crisis has meant many Chinese companies have suddenly found themselves alone in the market and no longer looking out for international partners.
M&A activities within Q2/3 from the likes of Reed, Tarsus and Comexposium can not be excluded. Informa seems to have slowed down on M&A in the region, but is still consolidating its businesses in China and around Asia.
The German Messe companies had been looking more keenly at the ASEAN market - taking a lead with Thailand, Vietnam and Indonesia.
Recently Deutsche Messe opened a regional office in Singapore and Messe Munich, Nuremberg Messe and Frankfurt had all been actively expanding their brands in the ASEAN market.
However, because the coronavirus hit Asia first, these Messes will also need to look after their Chinese and Indian businesses before getting back on track for M&A.
We can also observe an increased interest in the Indian market and many of the Indian companies are open to offers. Overall, we see roughly US$50m EBITA assets in the ASEAN, Indian and Chinese market up for sale this year and we believe that Vietnam, India, China and Indonesia will see some good deals in Q3/2020.
Covid-19 will not be the last virus that threatens humanity and our MICE industry. We could have been prepared for this, and must learn what we can do for the future in these times.
I congratulate all exhibition organisers who pushed through their shows in difficult times and there are many examples in Thailand, Australia, Singapore and Europe.
Business will go on and Covid-19 shows how important the health of our exhibitors and visitors is and how quickly our industry can be turned upside down. Therefore, we need to go back to basics and engage more with our exhibitors and visitors in good and in bad times.
I wish you all well.