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GSC Economics 101

The never-ending cycle of tradeshows on the West Coast has increased business opportunities for exhibition companies. Therefore, many of these companies found it feasible to set up shop in the region or at the very least have an active presence on the ground.

Freeman produces more than 450 tradeshows annually in Las Vegas
Freeman produces more than 450 tradeshows annually in Las Vegas

Announced as part of the Exhibitions Mean Business campaign, statistics from Center for Exhibition Industry Research indicated that tradeshows contribute $71.3 billion to the U.S. GDP.

On a basic level, a tradeshow’s economic impact is most often measured by a Convention and Visitors Bureau, which cites the number of attendees, and where they shopped and dined. But attendees aren’t the only ones who contribute to the economic impact a show makes. The event organizer’s hiring decisions also play a role.

For show organizers, it’s important to contract one dedicated, full-service company that is in charge of setting up and tearing down the entire show.

Without this company’s support of the organizer before, during and after the show, how would the exhibition go on? Some may have suggestions, but for show organizers, using only one dedicated show runner could avoid a ‘too many cooks in the kitchen’ type of situation.

Additionally, without a well-run show, attendees and exhibitors could wander elsewhere. If that happens, then the result could mean “sayonara” to attendees’ economic impact on a city.

While it’s evident these producers – generally called general service contractors or GSCs — contribute to the economic impact of a tradeshow, not much is discussed about their overall impact on a city.

The economic impact of GSCs is felt each time they hire temporary labor and full-time staff, make major purchases, build facilities, pay taxes and take on other endeavors to support the trade.

Freeman and GES, two of the leading GSCs in the U.S., discussed the flurry of economic activity surrounding their operations in two key exhibition cities, Las Vegas and Los Angeles, respectively.

Freeman – Las Vegas

Freeman had a presence in Las Vegas long before it opened a facility there in 1992. Since then, the company’s investment in the market has grown.

The company launched Freeman Audio Visual in June 1993, and in 2010, the company acquired Encore Productions, now called Encore Event Technologies after a merger with AVT Event Technologies. In addition to Freeman’s shows, Encore also produces events that contribute to the local economy.

Freeman produced a Qualcomm event for International CES in 2011.
Freeman produced a Qualcomm event for International CES in 2011.

“We currently produce more than 450 events annually while averaging up to eight events any given day,” stated Allen Lind, vice president/general manager for Las Vegas, Freeman. “We support the Las Vegas community via a number of corporate social responsibility efforts, including charitable and in-kind donations and our sustainability efforts to produce events in the most environmentally friendly way possible and collaborate with a number of customers to make their events greener.”

During the time frame this article was written, Freeman had just produced the Annual Conference & Exposition of the Society for Human Resource Management (SHRM), which had a $19 million economic impact.

Running from June 28-July 1 at the Las Vegas Convention Center, SHRM 2015 was by no means Freeman’s largest show. In fact, for its larger operations, the company often finds it needs to expand its labor force and bring onsite more full-time employees.

“A notable peak day for us in Las Vegas during January was more than 2,900 employees between our labor force, full-time employees and the additional supervision that was brought in for this busy time period,” explained Lind.

Known as the tradeshow capital of the world, Las Vegas therefore has several qualified vendors who can provide back-up equipment support when Freeman needs it.

“We utilize a number of local equipment vendors that can supplement our current operation during peak times with equipment, such as forklifts, carts, boom lifts, etc.,” he stated. “Occasionally, we also rely on local vendors for graphics support to supplement our capacity when needed for peak production. Our Las Vegas branch also receives regional support from other Freeman locations and other vendor partners that supplement all of our locations along the West Coast with inventory items to produce our events.”

While running the show, Freeman also incurs direct costs. Its budget mostly goes toward labor, equipment rentals, graphics and carpet, according to Lind.

GES produces nearly 200 shows a year in Los Angeles
GES produces nearly 200 shows a year in Los Angeles

Global Experience Specialists (GES) – Los Angeles

GES has a long history in Los Angeles. In 1971, the company set up an area facility to support its event operations. The city is also home to GES’ nearly 100 full-time employees and 50 union partners.

“In addition to the city, county and state taxes paid for our employees, property taxes on building and marshalling yards, etc., GES also supports the local economy through the purchasing that is done with businesses in the Los Angeles area,” stated Detra Page, APR, senior manager of corporate communications, GES.

According to Page, in 2014, GES purchased more than $18 million in products and services from vendors in the Los Angeles County and Orange County areas.

For many businesses, the investment of time is equally as important as the investment of money. To ensure that a tradeshow is well-run, GES spends a lot of time ensuring attendees can find and identify the exhibition. Signage, for example, is needed within large convention centers that often hold simultaneous events. This pre-event planning includes figuring out the look and feel of the show and wayfinding, she added.

GES' facility in Las Angeles.
GES’ facility in Las Angeles.

“Although Los Angeles is not GES’ largest operation, it’s one we are very proud of the events we produce, our long-term clients and our experienced local team,” remarked Page.

This past June, the local team produced E3 Expo at Los Angeles Convention Center, which had a $40 million economic impact.

“On average, GES produces nearly 200 events per year in Los Angeles,” she stated. “[For] one of our larger Los Angeles events, we hired nearly 400 union partners (Decorators, IBEW, and Teamsters) on peak days and approximately 25 management team members. Move-in, through run of show, through move out is 21 days,” Page explained.

For each exhibition, GES always budgets for labor, equipment rental and graphics. According to Page, labor constitutes the largest part of its budget while creating electronic exhibitor kits is the smallest.

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