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The Center for Exhibition Industry Research (CEIR) reports that the U.S. business-to-business (B2B) exhibitions industry improved significantly in the third quarter of 2021 from the previous five quarters. Cancellation rates of the physical events dropped to 19.0% from 90.4% in the first quarter and 66.5% in the second quarter of 2021. About 98% of exhibitions were cancelled during the second half of 2020.

As a result of fewer cancellations, the CEIR Total Index, a measure of exhibition industry performance, improved from a decline of 95.7% from 2019 in Q1 2021 and 79.6% from 2019 in Q2 to a decline of 56.0% from 2019 in Q3 2021. The performance of the U.S. economy was far better, registering a moderate 1.9% increase in real (inflation-adjusted) GDP from Q3 2019. It increased at an annual rate of 2.1% from the previous quarter, a deceleration from 6.7% in the second quarter. The deceleration in real GDP in the third quarter was led by a slowdown in consumer spending. A resurgence of COVID-19 cases resulted in new restrictions and delays in the reopening of establishments in some parts of the country. Economic recovery is led by strong spending on goods, as services industries are seeing far slower returns to pre-pandemic levels.

Figure 1: Real GDP vs. CEIR Total Index, Q1 2020 – Q3 2021, % Change from 2019

Among cancelled events in Q3 2021, fewer events, 69.4%, pivoted to produce digital events, compared to 80.6% in Q2 2021. Most cancelled trade shows in Q3 2021 that do not feature conferences opted to cancel their events entirely rather than to produce digital events.

Last year, nearly 98% of trade shows scheduled to be held in the third quarter were cancelled, making comparison of Q3 2021 performance results to Q3 2020 results not useful, as any positive change would be very large and misleading. The more useful comparison is to 2019, the industry benchmarks before COVID-19 forced the industry’s shutdown. Thus, completed events in the third quarter of 2021 are compared with those in the third quarter of 2019 in Figure 1 as well as in Figure 2 below. Total Index is a weighted average of cancelled events with zero values for all exhibition metrics and completed events.

Figure 2 provides insights among events that happened in Q3 2021, comparing performance to Q3 2019. Q3 2021 results speak to a choppy recovery that is underway, though overall, the industry is slowly improving. Excluding cancelled events, the Total Index for completed events in Q3 2021 dropped by 45.8% from 2019 (Figure 2), compared to a decline of 54.9% from 2019 in Q1 2021 and 39.8% from 2019 in Q2 2021. Exhibitors suffered the largest fall of 51.2%, followed by Real Revenues plunging by 49.7%. Net Square Feet (NSF) tumbled 43.8%. Attendance in Q3 was the metric that contracted the least, 37.1% from the third quarter of 2019. That attendance is a comparatively stronger performing metric is hopeful, as attendance historically has been a leading indicator for the industry.

The U.S. economy has been growing since May 2020. With a sharp rebound in the third quarter of 2020 and a continued recovery through the third quarter of 2021, real GDP in Q3 2021 exceeded its peak in the fourth quarter of 2019 by 1.4%. Delta infections have dampened economic activities during the third quarter of 2021. However, the latest data for October 2021 shows that real personal consumption expenditures have regained growth momentum, rising 0.7% from the previous month and 6.6% from a year ago. With vaccination eligibility extended to children ages 5 to 11, the U.S. population with at least one dose of the COVID-19 vaccine reached 70% on 28 November 2021.

“Rising vaccination rates and continued robust economic activities bode well for the B2B exhibition industry,” said CEIR Economist Dr. Allen Shaw, Chief Economist for Global Economic Consulting Associates, Inc. “The B2B exhibition cancellation rate should decline further.”

“With more vaccine mandates and safety measures implemented at large gatherings, and with a majority of the population vaccinated, the recovery of B2B exhibitions should continue in 2022, unless the omicron variant causes a severe fifth wave of COVID-19 infections,” added CEIR CEO Cathy Breden, CMP, CAE, CEM.