Plans are afoot to double Hong Kong's exhibition space with a new purpose-built centre on Lantau Island as part of the Airport Authority's 57-hectare SkyCity masterplan.

Scheduled for completion in 2005, the first phase of the HK$4 billion exhibition project will add depending on the contract between 32,000 and 50,000 sq. metres of exhibition space. This will be extended up to 80,000 sq. metres, the authoritys Commercial Director Hans Bakker said.

The government and exhibition operator will each own a 45 per cent share in the exhibition centre, while the Airport Authority will hold 10 per cent.

At the announcement of the plan on November 1, Secretary for Commerce and Industry Chau Tak Hay said that the proposed exhibition centre would bring tangible and intangible benefits to Hong Kong.

The project is expected to bring a net economic benefit of HK$10.4 billion in present value over a 25-year period. Some 3,500 jobs will be created during the construction period and in connection with the operation of the new centre.

Hong Kong Convention and Exhibition Centre (HKCEC) Managing Director Cliff Wallace, CFE, said he is a little surprised a new exhibition centre will be built so soon after the completion of the HKCEC extension in 1997.

It is difficult to comment on the issue because no specifics of the project have been released, so from that standpoint, I see it as a bit surprising because we are building the venue quite so soon, and surprising because we are going to get twice the space we already have quite so soon.

A PKF Consultancy Study conducted by the Economic Services Bureau and released in late 1999 concluded Hong Kong would need an exhibition-based multi-purpose facility of around 51,000 sq. metres by 2005.

Louis Cheng, chairman of the Hong Kong Exhibition and Convention Organisers and Suppliers Association, said there is a pressing need to start work on a new facility to fight international competition and maintain the lead and momentum of growth in the exhibition industry.

Just last month, a very big show was held in Singapore for the first time, the ITMA [International Exhibition of Textile Machinery Asia]. Hong Kong, Osaka and Singapore were shortlisted as possible venues, but because we dont have a suitable exhibition centre for this type of show they selected Singapore Expo, he said.

Staged once every four years in Europe, ITMA has drawn major textile machine makers since it was started in 1951. Osaka was eliminated from the running due to its high costs. Hong Kong proved unsuitable because the hundreds of machines weighing 10 to 15 tonnes each demanded the exhibition be held at ground level. The simple reason that Singapore was chosen was because it has 60,000 sq. metres of gross space on the ground floor in one location.

Mr Cheng estimates the show generated about HK$1 billion, which was how much it cost to build Singapore Expo.

Peter Sutton, president & chief executive of one of the worlds largest exhibition organisers, CMP Asia, said if the new centre can bring in new exhibitions to Hong Kong, it would present a more competitive position for Hong Kong among the many Asian cities now offering themselves as exhibition centres many of which have built, or are building, new dedicated exhibition centres.

Not everyone is convinced the exhibition industry is big enough for Hong Kong to operate two international-class exhibition centres profitably, and warn that two centres could even have a negative impact on the industry.

The new airport venue will only open opportunity to speculators to create copy-cat exhibitions, and ultimately undermine the economic effect brought by the original exhibition, and damage the existing operation and rules, Business & Industrial Trade Fairs Ltd Executive Director Arthur Tang warns.

Mr Sutton said CMP has seen some cases where the value of exhibitions to the industries they serve declines, partly because there were too many exhibitions covering the same subject in the same city. And one of the causes of this could be two or more venues in the same city.

It is a fairly complex situation when this occurs. But one unfortunate outcome is that these exhibitions start to compete on price rather than on the quality, he said.

However, exhibitions attempting to cover the same industry is usually a temporary phenomenon. Eventually exhibitors realise that it is in their own best interests only to attend the trade fairs that actually bring in the trade buyers they want to meet, and the trade fairs that really understand the industry they are serving.

So gradually, over several years, large dominant exhibitions emerge and these are usually the most valuable as all major exhibitors and visitors meeting in one place at one time is the most successful way of generating new business, Mr Sutton said.

Mr Bakker said he doesnt believe two exhibition centres will create such a problem because the new centres primary goal will be to attract new international exhibitions.

If you look at the upper end of the market, it is served by the HKCEC in Wanchai, and our intention is to serve the other end of the market that means heavy machinery, boat shows, et cetera, that are not possible to be held in Wanchai, he said.

Mr Tang said he doesnt believe that a new venue will make exhibition organisers switch from their current exhibition venues to Hong Kong.

The most important aspect of a successful exhibition is the quality of the exhibition itself, and to maintain our competitiveness does not mean building a new exhibition centre, he said.

Mr Wallace said he also has his doubts as to whether or not a new exhibition centre will be able to bring in new trade fairs.

Good buildings without a market very seldom create the market some would argue never create the market. You build exhibition and convention centres based on existing and potential market base. You dont build them to create a market, he said.

But Mr Cheng disagrees.

Just look at the ITMA. That is one of the biggest exhibitions in the world. Singapore has no textile industry, it doesnt produce textile machinery, so why did they go there and not to Hong Kong?

This is just one recent example. So I dont know why people say there is no market. Our government has done the research and the research points out that there is a need for a second venue.

Interestingly, in just two years following the opening the HKCEC extension, 28 new exhibitions were launched in the centre, 18 of which are now a regular fixture on its exhibition calendar.

The additional shows make HKCEC by far the busiest exhibition centre in Asia, with 50 trade shows a year. Japans Tokyo Big Sight ranks second with 33 trade exhibitions a year, and Singapore International Convention & Exhibition Centre comes in third with 32.

Mr Bakker points out that exhibition and conference goers are not just looking to attend a show, they also want to have a good time and generally spend up to 50 per cent more during their stay than an average tourist.

This is Hong Kongs big advantage, Mr Bakker said. In addition to its position at the mouth of the Pearl River Delta, the rule of law, financial system ..., the brand name of Hong Kong also oozes appeal. The big challenge to market Hong Kong is to learn to not just look from the inside out at what we think people want, but to look at Hong Kong from the outside in to see what people want from it.

That is one of the reasons why we think this Hong Kong international exhibition centre will be a success. Not only is it for business but also for the entertainment and the frills of the city, he said.

Much is being made of the fact that the exhibition centre will be close to Disneyland. It is no coincidence that the authority is shooting for a 2005 opening date, because planners believe that both exhibitors and visitors, particularly from the Pearl River Delta, will want to come with their families, so while they work at the exhibition, the children can be having fun at Disneyland.

To me, this is a novel concept and I look forward to seeing how well it works, Mr Sutton said.

Frills aside, for the centre to attract new exhibitions, Mr Cheng said it must be what event organisers and exhibitioners want, and not just what the designers want.

We dont want a crystal palace. We just want a basic exhibition centre, like the German style. If we build an expensive glass palace that would drive up costs and because we have to bid against other cities, if price is a big factor then it will be a disaster, he said. That is why our association is asking it be a simple structure with big cargo handling doors, single storey, and no frills. But that doesnt mean it has to be ugly.

In January next year, the Airport Authority will start its roadshow to the U.S. and Europe to find an international exhibition operator to invest in the project. Then planning work will start as early as the middle of next year, he said.

For Mr Cheng, the sooner work on the project begins the better, because a new exhibition centre will not just benefit the exhibition industry, but also Hong Kong in general.