As Hong Kong fully reopens to the world, rolling back Covid-related restrictions and allowing quarantine-free travel, the convention and exhibition industry is slowly regaining strength. But the going has been hard: in the two years up to September 2022, only 175 trade shows took place at the Hong Kong Convention and Exhibition Centre (HKCEC) and AsiaWorld Expo (AWE) – a 45% drop from pre-pandemic times, according to the Hong Kong Trade Development Council (HKTDC).
Pre-pandemic, the GDP of the exhibition sector was HK$58.6 billion, the equivalent of 77,000 full-time jobs and about 2.2% of Hong Kong’s GDP, bringing nearly 2.2 million people into the city. Then Covid-19 began in early 2020, leading to the cancellation of hundreds of events. In 2021, physical international participants in exhibitions were indicated to be less than 1%, according to the Hong Kong Exhibition & Convention Industry Association (HKECIA).
“The last truly international show before the pandemic was in January 2020,” said HKECIA Chairman Stuart Bailey. “In the last three years, there have been many cancellations, postponements and even relocations to other cities. We have also seen some shows held with only local participants and therefore on a much smaller scale.”
Bailey added that the true economic impact of these lost events and smaller shows is difficult to calculate. “But the 2023 calendar is filling up fast at both the AWE and HKCEC. We can see that after almost three years without international trade exhibitions, there is pent-up demand, and buyers and sellers are keen to return to Hong Kong trade shows.”
If last month’s events are any indication, the industry is getting back on its feet.
Besides the Asian Financial Forum and the Hong Kong Wine & Spirits Fair in January, HKTDC will organize no fewer than 30 medium to large-scale events in 2023, including an international jewellery show in March that received more than 2,000 applications from prospective exhibitors.
Wendy Wen, Managing Director, Messe Frankfurt (HK) Ltd, said their most recent event, the Hong Kong International Stationery & School Supplies Fair, returned after a two-edition hiatus due to the pandemic. The event, together with the Hong Kong Toys & Games Fair and the Hong Kong Baby Products Fair, co-organized with HKTDC, attracted more than 21,000 in-person and online buyers, including from the Mainland, and countries such as Brazil, Chile, the Czech Republic, France, the U.K. and the U.S.
According to HKTDC, the number of foreign exhibitors has seen a gradual uptick since Hong Kong started rolling back entry restrictions in September, while the reopening of borders between Hong Kong and the Mainland will also benefit the sector.
“Following the resumption of quarantine-free travel between the Mainland and Hong Kong, we are happy to see buyers from the Mainland, ASEAN and the wider Asia region, Europe and the Americas travel to Hong Kong for the fairs. Business travel in Hong Kong is gradually returning to normal,” HKTDC Deputy Executive Director Sophia Chong said in a statement.
Also buttressing recovery are the AsiaWorld-Expo Phase 2 project and the Wan Chai North redevelopment project near the Hong Kong Convention and Exhibition Centre (HKCEC), which will add to the supply of large-scale exhibition spaces.
“Before Covid-19, the Hong Kong Convention and Exhibition Centre (HKCEC) hosted around 1,000 events in a typical fiscal year,” said Monica Lee-Müller, Managing Director, Hong Kong Convention and Exhibition Centre (Management) Limited. “Following the reopening of borders with the Mainland and the lifting of quarantine requirements, we have seen a surge in booking enquiries from overseas as well as local exhibition and convention organisers.”
“We maintain a cautiously optimistic outlook for 2023, and estimate that the business volume of exhibitions will return to 70-80% of pre-pandemic levels,” she said, adding that they were currently in discussions with international exhibition organizers to bring six to seven new events to Hong Kong in the second half of the year.
Wendy Lai, Vice President of Global Sources, which has been running Hong Kong trade shows since 2006, said their spring and autumn schedules were aligned with international buyers’ sourcing cycle.
“For the two event phases in April alone, we are expecting a full house for both,” said Lai. “Our events are held at AsiaWorld-Expo, which has 10 purpose-built exhibition halls. For both of our April show phases, we will be occupying all 10 halls, meaning each phase will showcase around 4,000 exhibit booths. In terms of visitors, we are expecting 60,000 from around the world.”
Meanwhile, Hongkong-Asia Exhibition (Holdings) Ltd said it will organize eight public fairs in total this year, including four wedding fairs, The 21st Hong Kong Food Festival, The 21st Hong Kong Mega Showcase, The 23rd Hong Kong Homex 2023 and e-expo & Auto HK.
“Our biggest shows will be the Hong Kong Food Festival and the Hong Kong Mega Showcase, which will be held concurrently in December,” said Director Priscilla Lo, adding that the eight fairs are expected to attract over a million visitors in all, mostly from Hong Kong.
After strict pandemic-related restrictions in the past years resulted in some shows moving to Singapore and Thailand, the Hong Kong Tourism Board announced that four important global trade events were returning to Hong Kong in 2023: Jewellery & Gem World Hong Kong, Jewellery & Gem Asia Hong Kong, Cosmoprof Asia and Asia Fruit Logistica.
Impact on Economic Growth
To help the industry, the HKSAR Government has extended the existing Convention and Exhibition Industry Subsidy Scheme (CEISS) to 30 June 2023. In addition, the Government is also launching a new HK$1.4 billion scheme after the CEISS expires to subsidize more than 200 exhibitions, which will be staged in Hong Kong over the next three years.
“We are grateful to the Government who have listened to our pleas and understand the importance of investing in the exhibition and convention sector and the knock-on effect that thriving trade shows can bring to Hong Kong,” said Bailey.
The sector’s revival will also prove to be a catalyst for increased exports and export-related activities in Hong Kong this year, with HKTDC forecasting a 5% increase in Hong Kong’s total exports in 2023 – a recovery from the 6% decline last year.
Expected to have a positive impact on major sectors is the crammed schedule of leading international trade shows in jewellery, fashion, art and antiques, fine wines, consumer electronics, beauty and wellness, food and hospitality.
At Informa Markets Jewellery, the organizer of the B2B jewellery fairs coming to Hong Kong in September, there is a sense of growing optimism.
“The international jewellery community has long been clamouring for the return of our iconic jewellery shows,” said Celine Lau, Director of Jewellery Fairs, Informa Markets Jewellery. “Strong demand for the spontaneous conversations and product sourcing that occur on the show floors of our fairs in June (Jewellery & Gem Asia Hong Kong, 22-25 June at HKCEC) and September (Jewellery & Gem World Hong Kong, 18-22 September at AWE, and 20-24 September at HKCEC) is expected to lead to solid exhibitor and visitor turnout.”
Aviel Elia, CEO of the Israel Diamond Institute (IDI), which will participate in the Jewellery & Gem Asia and Jewellery & Gem World fairs, said: “With the easing of pandemic restrictions, we can hardly wait to meet with all our friends and colleagues in Southeast Asia and do business face to face, like we always appreciated in the diamond industry, based on trust and personal relationships. The IDI plans to host Israeli diamond pavilions during these events, with the best stones our industry has to offer.”
However, some Hong Kong businesses are still reckoning with the effects of the slowdown. Neville Shroff, director and CEO of Shroff & Co., a long-established Hong Kong trading and manufacturing company that has frequently participated in the city’s trade shows since 1980, said the last time they exhibited in a Hong Kong fair was in 2015.
“The cancellations of trade fairs have had a significant impact on many businesses including ours, as customers were unable to visit due to the stringent quarantine restrictions, resulting in a dramatic drop of orders,” Shroff said. “Covid’s repercussions on production, logistics and freight hikes were unprecedented, affecting every level of the supply chain mechanism. The economies and our markets took a battering, and together with the Ukraine/Russia conflict caused massive disruptions.”
He added that the company would continue to observe market trends before attending any trade shows this year. “We will not participate in the first half of the year. However, we will review later in the year.”
Looking to the Future
While the sector’s growth is on an upward trajectory, recovery is predicted to be U-shaped, said Bailey, cautioning that it will take time for the logistics and supporting services to get back to 2019 levels. Hurdles include supply chain issues, rising operating costs as well as Hong Kong International Airport’s capacity to handle increasing air passenger traffic, which is expected to climb to between 60 and 70% of pre-pandemic levels by the end of 2023 and return to normal only by 2024, according to the Airport Authority Hong Kong.
“This means that we will not see the big shows reach their pre-pandemic scale just yet,” warned Bailey, adding that neither is the volume of participants and visitors expected to match that of the pre-Covid years.
Lee-Müller pointed out that large-scale exhibitions have relatively long planning cycles, from booth design, promotion and shipping of exhibits to staff deployment and more.
“Even though buyers are coming back, the number and variety of exhibitors are also key to hosting successful events,” she noted. “However, it is important to remember that Hong Kong’s competitive advantages as a leading city for hosting exhibitions and conventions have remained unchanged.”
“Pre-pandemic, we saw that 2.2 million people were coming to Hong Kong to take part in exhibitions,” said Bailey. “However, we can see that the airport will not reach the capacity to be able to handle previous levels of passengers, and that cross-border quotas remain in place. We remain hopeful that the situation will improve but there are still challenges to overcome. It will take some time for all of the supporting infrastructure to return to the levels that can support the mega-shows of the past. We remain positive that Hong Kong will return to its former glory and once again be the trade fair capital of Asia.”