The Simple Answer is the Cost of Labor
There are so many variables depending upon the event city, the days and hours of installation and dismantle, the complexity of the project, the drayage costs set by the show association heading the event, and the subtleties like seamless walls, raised wood flooring, rigging for hanging signs or exhibit safety. All these areas may cause large additions to sales invoices. The single most important factor is that convention centers are in contract with the local trade show labor union and the union establishes the pay rates. In most cases we pay over $90 per person an hour and in some places as much as $220 an hour for straight time hours. An additional $24 to $36+ per hour is then added to each labor hour for benefits such as health and welfare (insurance), vacation pay, training classes, and the pension fund. There is no getting around this factor and that is why an exhibit rental order costs so much money.
The Dream of American Living is Very Costly
When foreign clients from non‐unionized countries that have large labor pools skilled and unskilled choose to exhibit at a show in the USA they are astounded by the charges. While understanding their dilemma when comparing countries that pay less than a dollar an hour to inexperienced workers and $10 an hour for trained craftsman, remember to remind them that we can only provide the rental service. We do not make the rules on the trade show floor.
Event City and Union Contracts – most large convention centers are tied to union labor contracts. This is a fact of life and there is no way around them. Labor unions provide a pool of skilled labor in varying degrees from leads and journeymen to apprentices to build quickly and efficiently in short time spans. They assume control over many service areas and are very ingrained in the trade show industry. No matter if you rent an exhibit from the show contractor or an independent exhibit house if there is a union contract in place your convention hall services will be handled by union members. Unlike other countries there is no hiring of outside riggers, forklift drivers, painters, electricians, or laborers other than through the show association’s general contractor (usually Freeman or GES). Installation and Dismantle Labor ‐ in our estimation approximately 50% of our sales order is money spent for installation and dismantle service which is not a profit center for the exhibit house. Each local union has a contract that states how much money is to be paid for each hour of straight time, double time, and overtime labor. There is another chart that explains which days of the week and hours in the day fall into each category. These hours comprise hourly salary, vacation pay, and pension and additional money to manage the union.
Booth Space and Drayage (Material Handling) – booth space is sold through the show association or a group that they have hired to represent them directly to the show exhibitors or sometimes to brokers from out of the USA to resell or package as pavilions. The booth space pricing usually goes hand in hand with the drayage costs – some seem high on one side and low on the other or vice versa. The money made in these sales and drayage costs pays for the convention center rental, and the myriad of costs associated with managing a trade show along with the salaries of all the people it takes yearlong to run the association. So, these costs are directly related to the show association/organizer.
Most Exhibits are Built Offsite and Reassembled
Complexity of Exhibit – outside of the USA most exhibits are built on a raised floor with the electrical wiring running underneath. Due to the costliness of laying this type of floor the flooring of choice in the USA is carpet with padding. Walls in the USA are constructed offsite and are modules that fit together and have either a laminated finish or graphics or dreamscape applied. Very rarely is there a seamless, spackled, and painted wall. If that happens it is very costly. Manufacturing Labor – most exhibit houses do not employ union labor however an hourly wage based on skill level and even a minimum wage as established by the government must be paid. The most skilled craftsmen are not inexpensive and they do get paid overtime and double time. That is why clients are asked for commitments much earlier than outside the USA to fit manufacturing into a regular hour work week. Food Service – unless the trade show represents the food industry all food and alcohol must be purchased from the onsite convention center vendor. There is no shopping for better pricing, different food choices, etcetera – again it is what is offered only. Shipping an Exhibit – while the charge for shipping from an exhibit house to a venue is not an area that is considered excessive there are some hidden costs. Going to the advance warehouse is straight forward although more costly. Shipping to show site costs less in direct costs however the driver must first drive to the show’s marshalling yard and wait to be called to the convention center. This can be a ten-minute wait, or ten hours, or overnight. The driver is of course paid for his hours.
Build and Burn Exhibits – the term build and burn does not exist in the USA. While that is the standard all over the world in the USA exhibits and in most cases t graphics are made to move in and out of the convention center and then stored or separated into pieces to be re‐used again. These are the differences although I am sure there are many more comparisons to be made. Please feel free to ask questions of your account executive. I hope this helps to dispel the notion that renting exhibits comes with a huge profit margin. Of course, it is a money-making business, however it is a business that supports many employees and their families with a living wage in the USA.
