Photo from Bringing business article
As well as all the backpackers, mini-breakers, honeymooners and holidaymakers that pack out the hotels and streets of Barcelona year after year, there is another type of visitor that provides an important boost to tourist board statistics and helps keep hotel occupancy high. These are the people who come to conferences, trade fairs and company general meetings, and although they are less visible, normally tucked away in function rooms and lectures, their existence is vital to the city’s tourist industry.
In the current economic climate, now more than ever, that industry needs all the visitors it can find. Statistics released by Turismo de Barcelona show the number of non-business tourists dropped 6.3 percent in 2008 to 6.6 million visitors, and hotel occupancy was down by 3.3 points, producing an average of 76.3 percent occupancy for the year. As such, business tourists have an important role to play in the local economy. Just how important was highlighted recently when the Mobile World Congress was held here in February. Although numbers were down by 5,000 compared to the previous congress, they still reached an impressive 50,000 attendees, generating an estimated profit of E140 million. Jordi Clos, president of the Barcelona Guild of Hotels, told the press that during the three-day conference, 17,400 hotel rooms were occupied.
Barcelona is currently ranked fifth in the world by the ICCA (International Congress and Convention Association), which produces an annual list of the most important world-wide destinations for congresses. Although it is behind Vienna, Paris, Singapore and Berlin, Barcelona ranks highly, due mainly to its impressive infrastructure, security levels and the accommodations it offers. An essential point in packaging itself as a prospective business destination are the city’s conference sites. The principal venues here are run and promoted by the Fira de Barcelona, which can offer prospective event organisers 365,000 square metres of space over their two main venues, the Gran Via pavilions and the eight halls at the Montjuïc site.
But despite the success of fairs like the Mobile World Congress, there has been a noted downturn in companies committing to such expensive and costly events in recent times, with some cancelling completely due to the financial crisis. The year began badly with the announcement that the Bread & Butter (B&B) fashion trade fair would be relocating back to its original location in Berlin. Having moved from there to Barcelona in July 2005, after space problems in the German edition, Karl Heinz-Müller, Managing Director of Bread & Butter, talking at a press conference in January this year described the Barcelona venue as perfect. “The grounds were a dream come true, [they have] an industrial, morbid beauty, and completely suited our ideas.”
He was quoted as saying that Barcelona was the only other European city apart from Berlin able to offer exactly what they needed—at the first conference held in that summer, 45,000 visitors came through the gates. During the four years that Bread & Butter was held at the Fira, the independent and urban clothing show attracted a total of over 600,000 people, garnering international press coverage and encouraging a large amount of off-shoot events, parties and other promotions.
However, although deemed a success by both sides, Heinz-Müller speaking at the press conference earlier this year explained that the reasons behind the show’s return to Berlin were of a strictly marketing nature, and not because Barcelona had somehow failed to accommodate his globally recognised event. “The desire of the market for a new change was strongly tangible,” he said. The last Barcelona B&B was held in January; over 800 different fashion brands took part and the organisers saw a record attendance of 79,942 people.
Whatever the reasons behind the move, the estimated €200 million gap that Bread & Butter leaves in the Fira’s calendar is an important deficit. On the same day that B&B announced its departure, Agustín Cordón, CEO of the Fira, along with Barcelona mayor Jordi Hereu, were spotted at meetings with major Catalan fashion brands such as Custo, Armand Bassi and Sita Murt, sparking rumours of a replacement fashion trade fair to take the place of B&B. By mid-March, those rumours were confirmed with the announcement that ‘Brandery’—an homage to brands—would be held in July, a week after Berlin’s Bread & Butter. Organisers confirmed that brands like Nike, Tommy Hilfiger, Custo and Levi’s had already confirmed, and said they hoped for a total of 250 exhibitors. That would go some way toward filling the hotel rooms that B&B’s departure will leave empty.
Filling hotel rooms is an ever-growing concern. In February, Jordi Clos estimated that for the first half of 2009, occupation rates in hotels will be six percent lower than for the same period in 2008, saying that the numbers for January were “pretty bad”. As detailed in El Pais, Clos announced a new plan in February, offering event organisers discounts ranging from 20 to 50 percent of hotel room rates in order to entice new business into the city.
The value placed on ensuring the continuing presence of high-profile trade shows, and the measures taken to ensure their existence, was evident during the negotiations over the 90th edition of the Salon del Automóvil de Barcelona, which takes place this month. Organisers had been predicting low attendance figures and were considering the possibility of axing the event all together, but the Association of Automobile Manufacturers and Trucks (ANFAC) scored a dramatic turn-around and signed up a record number of car brands and manufacturers to exhibit. The cost to exhibitors was reduced, and additional sponsors obtained, after the Spanish Congress declared the motor show an event of “exceptional public interest”, making tax incentives available for potential sponsors, and deals were shortly signed with La Caixa and Agbar among others.
These kinds of recent successes mean that the Fira might not stand to lose as much as was previously expected for 2009. In fact, 15 conferences for the rest of 2009 have been announced, with two brand new and significant events being added to the calendar: the International Carbon Expo held this month and HIT, a new world innovation summit taking place in June. With a view to the unpredictable economic outlook, Agustín Cordón, speaking at an annual meeting in December, unveiled an expansion strategy for the Fira, and predicted only a 1.8 percent drop in profits compared to 2007. He also said that pre-tax earnings would stand at €19.1 million, re-emphasising that Fira and the money it makes for Barcelona remain a considerable driving force in the overall economy, one that should not be allowed to falter.
With around 2,000 new hotel rooms to be made available in the coming 12 months, bringing the total to around 30,000 citywide, the promotion of business tourism is essential to Barcelona’s economy and international profile in a highly competitive market. The hope is that even if the pleasure tourists struggle to afford those mini-breaks and stag weekends, international business meetings and high-profile trade fairs will continue coming to Barcelona. They may not be the crowds of leisure tourists that swarm around the tourist sights all year, but as they move from conference hall to business meeting they are leaving behind money that is no less vital to the city’s bank balance.
One point of view:
David Lanigan is the Managing Director of Icon Events International, which specialises in organising conferences and seminars for executives from companies such as Microsoft, Shell and Nokia. He said the events industry has been hit hard by the economic crisis, as many large client companies have imposed international travel restrictions and budget cuts. “We have survived and are doing well by taking a modern, fresh look at how companies are doing business. That involves branching out from old-fashioned business conferences and looking at new topics, involving new forms of Internet and mobile media. The market became saturated over the last few years. It's not impossible, it's just much tougher.”
First published May 2009.