Der Baas trifft Wolfram Diener

Yes, dear Christian, thank you very much. I think so too. The trade fair was particularly affected by the pandemic.

We see the light at the end of the tunnel. Things are on the upswing again. We made a successful restart with the Caravan Salon as the kickoff event this summer. And of course, all the trade fairs scheduled for the coming months are not at pre-crisis level, but at least we already have a noteworthy volume again. And all the participants who were at our Düsseldorf exhibition grounds before the pandemic are happy to be able to come back.

Well, last year, 2020 was a serious caesura. Our business collapsed by over 70%. That means, of course, given the relatively high operating costs for our exhibition grounds and the workforce, we couldn't avoid a loss. That was unavoidable. And it can't be avoided this year either. However, the decline this year won't be quite as severe. From 2022, we hope to break even.

If I describe it as a percentage of our pre-crisis business, we are currently at 55 to 60% of pre-crisis level. And next year we are very confident that we will reach 75 to 80% of pre-crisis level. So we are somewhere between zero and 80, a bit more than halfway there.

Not before 2023, probably not until 2024. 2024 will be a strong year for us, partly because of the Drupa. But that's also due to the fact that next year there will still be travel restrictions for many overseas participants we normally have at trade fairs in Düsseldorf. They will want to come, but can't. That's currently the case for our Indian and Chinese customers. It's practically impossible for them to come. Brazilian participants are coming sporadically because it's no longer a high-risk area. But you can't predict whether that will remain the case throughout 2022. I can only base things on the current framework and look to the future.

No, it's not outdated at all. The building is very modern and extremely functional. Of course, the needs of trade fair participants change over the years, but that doesn't happen in a year and a half or two years. What is now required more than before the pandemic is that we expand our digital infrastructure. With Hall 1, we are already well positioned there. And besides, we have a nice forecourt that is also used outside trade fair times. It has now become a popular public space for skateboarders, posers, and the like.

Yes, exactly. You had previously announced that you would invest very heavily in the infrastructure of the grounds. Can you still do that, or do you have to plan differently now?

We can't do that at all. We had planned up to 2019 to invest just over a billion euros in renovating and renewing the grounds over the next 10 to 12 years. We have some halls that are top-notch because they have been continuously renovated or renewed, but they are essentially early 1970s architecture, and at some point you have to say there's nothing more to beautify; you have to get to the core of it and completely renew it. But we can't afford that. The funds are not available for a longer period. So we have postponed it indefinitely for now. I'd also like to mention that due to the specific nature of the Düsseldorf trade fair location, we have a cyclical trade fair calendar. As you mentioned, we have a very strong fair year in 2024. With that strong year, we absolutely cannot interfere with construction. So any construction measures we carry out must take place before or after the peak year and be completed.

We have never considered that, not even due to the pandemic. First of all, older halls have been fully depreciated for over 30 years. There are no more financing costs—just maintenance costs. That's the cost side. But more importantly, we have on average at least three events a year where the entire grounds are occupied. For each of our 17 halls, we generate revenue of 4 million euros. And if you calculate it from a business perspective, the additional halls actually have a higher contribution margin—let's say 2 million per hall. That's 6 million in profit per year for an additional hall. That's good money. I can't see any other business model that would be as profitable for us as a trade fair or any other business. But that doesn't mean it will stay that way forever. What is more appropriate is that we—as part of the strategic process I initiated last fall—have formulated a field of action called 'Exhibition Grounds of the Future.' We meet with representatives from industry, consciously from outside our company—visionaries, mavericks—and discuss with them, mostly hypothetically, what the requirements for an exhibition ground and hall will be in 15 or 20 years. What will visitors and exhibitors want? What form and format will events take by then? We are trying to gradually transform the grounds, not all at once. So the next halls scheduled for renovation will be remodeled according to what we believe is contemporary for the future.

Yes, of course. One theme is digital infrastructure—hotspots, WiFi, everything possible. Then sustainable construction. I think Messe Düsseldorf is already a role model there. We were probably the first company in North Rhine-Westphalia to install solar panels on buildings. We were at least the first company in Düsseldorf to put hydrogen-powered buses into operation. So we don't need to hide, but there is certainly more we can do. When I look out from my office in the high-rise onto the exhibition grounds, it looks very functional. There's a lot of stone and concrete. You could certainly make it nicer in terms of quality of stay combined with sustainability. That brings me to the next point: we want to create more feel-good zones—areas where people who don't want to do anything for an hour, who don't want to talk to exhibitors or other visitors, can just plop down. With a latte macchiato, great Wi-Fi, natural light, a nice sofa or a lounge chair. These are things needed in the future. You can already see it in some conference hotels. And perhaps the most important thing for the core of our business is the multifunctional usability of our halls. Honestly, our exhibition grounds are designed for large operations. We don't have small units. Our smallest unit is already 6,000 or 7,000 square meters. Our halls average 12,000 square meters. They can be partitioned, but not really properly. If a smaller event—and I deliberately say event, it could be a trade fair or another type—wants to come to us, it would be quite difficult to accommodate. On the one hand, we have the Stadthalle or the large rooms in the Congress Center that go up to a maximum of 2,000 people. Then there's a long gap, and then we have the very large venues that can accommodate 6,000, 8,000, or 12,000 people. It's a bit of a problem that we don't have a configuration for that.

We definitely want to create one.

Actually, it was more of a coincidence. In short, I started as a young project manager at Messe Hamburg. Hamburg is a sister city of Shanghai, and every six to eight weeks a Chinese delegation came that needed to be guided around the city, sometimes across the entire country or half of Europe. Nobody really wanted to do it at the time, and I was the greenhorn. So I was given the suicide mission of looking after the Chinese delegations from then on. That turned out to be an advantage for many years because I was able to build up a network. Eventually, when I was approached by Messe Frankfurt to take on a managing director role in Asia, I thought I already knew some people and had good contacts—I could very well imagine it. So it was an evolution, never planned, it just happened.

They shaped me a lot. First of all, I brought a little souvenir: my wife. My previous wife passed away; my current wife is Asian. But it also shaped my outlook on life and my way of working. To speak to the latter, I'm used to very dynamic development, a lot of energy, and when I arrived in Germany, I first had to downshift and take a deep breath and say, well, it doesn't go quite that fast here. I thought things were slower in Asia. It's a much-praised virtue not to become impatient. That's one of the biggest vices in Confucian Chinese culture. And yet everything goes fast. People in the business world are more aggressive, more ambitious. Some are not yet as satiated as one or another here in our society.

Two things clinched it. Firstly, my wife said she would like to spend some more time with my parents, who fortunately are still alive. I was away from Europe for 22 years, only saw my parents very occasionally, at most twice a year and only for a few days. She said your parents are getting older and might become care-dependent. I would like to be geographically closer to your parents. That was one thing. And the other, though we didn't have an exact timeline, was that my predecessor Werner Dornscheid, whom I had known for about 20 years, called me and made the possibility or prospect of working at Messe Düsseldorf appealing. So I came here in spring 2018. It was a beautiful summer and spring. I brought my wife on the second visit. I was able to show her the Rhine banks and Mannesmann Ufer in brilliant sunshine, all these happy people enjoying themselves by the river. We both got a very good impression of the city and the people living here. I already knew many people from the company, which made the decision easier because I am very connected to middle management, not just top management. And that ultimately led us to take the step.

Very good indeed. We had highly satisfied participants. Exhibitors were in a celebratory mood, which was only partly due to the success of the fair—the caravanning industry is simply doing brilliantly. It's a very contemporary way of vacationing. But we also had a very positive development on the visitor side. From the organizer's perspective, we had over 40% new customers, which is remarkably high for any trade fair. And again, as last year, a rejuvenation of visitors, which is very important. As an exhibitor, when you see fresh blood coming to the fair, when you see younger people—and now with reference to caravans, not just retirees as in the past. The old reputation that everyone about to retire buys a motorhome is no longer true. Young people with or without children, young families are buying motorhomes. They've saved up some money and can afford a motorhome without immediately needing bank financing. So it was a very good start to the season.

Yes. Can you be similarly optimistic about the boot fair? What will be possible there? What might be the next step forward compared to the Caravan Salon?

Yes, it's similar. To draw a parallel from the Caravan Salon to the boot, there is a development in both industries in that potential buyers or users of the offered articles are becoming more diverse in their leisure activities. At the Caravan Salon, we now have almost an entire hall dedicated to add-ons, extensions, and extra equipment. Today, motorhomes on the highway have racks on left, right, roof, and maybe rear, where various sports equipment is mounted. A similar development is happening in the water sports sector: people with a berth in a marina want to also do other things depending on weather or mood—diving, water sports, or something conventional on land near the marina. That works in our favor because that's exactly what you need as an organizer. New trends, new aspects that you can incorporate into the fair concept. That keeps the fair lively every year, and you can always activate new visitor groups. For the boot, the industry is also doing extremely well. Boats up to almost 60 feet, just under 20 meters—the yacht sector is doing very well, and also small boats, small sailboats or dinghies. The only small sector that is not doing so well is diving. That's because divers like to go to warmer waters—at least the Mediterranean, but preferably Southeast Asia. And due to travel restrictions, that business has taken a big hit. But that is a minor side issue for the boot. The core of the fair is doing extremely well, and we will present dozens of world premieres at the boot. I was at Travemünde Week, Kiel Week, and a yacht fair in Cannes a few weeks ago, spoke with many industry representatives, and they are all eager to come to the boot and present their new products.

Yes, we have ideas. I was just talking on the way here in the car with a gentleman about a new fair concept. But we are working diligently on new topics. There are very forward-looking themes we are working on. However, I don't completely shy away from traditional topics either. As long as there is a market and demand for them, that's fine too.

There has been a lot of media coverage during the pandemic that physical trade fairs or physical events overall will decline sharply or some fairs will vanish due to the development of virtual media. That already became apparent last late autumn from initial reactions of industry players and people who participated in virtual events. But first of all, in Düsseldorf, we have overwhelmingly—over 90% of our value creation—capital goods and machinery fairs. I think it's easy to see that a heavy machine or an entire plant worth several million euros is not bought online and can hardly be presented in a virtual showroom. What always benefits a trade fair is innovation, trends, new exhibitors or visitor segments, especially for higher-priced items as opposed to mass products. Conversely, if you have a consumer good that sees little or no innovation, is cheap, easily imitable, a mass product, you don't necessarily need a trade fair. But those are mostly products you don't see at Düsseldorf fairs. So long story short, what many people saw as a looming threat to physical fairs, we turned into a virtue. I believe very strongly. We have a strategy I'm 100% convinced of: we will continue to have physical fairs. Not everything will be as big as in the past, but that has less to do with the pandemic—I'll come back to that later—there are other trends. The important thing is that we use virtual media, especially networking or matchmaking opportunities, web sessions or web conferences, social media, a news blog—the latest gossip of the industry—that entices people to go to the platform. Also, but with some limitations, a virtual showroom. That only partially works. You sit in a black room and wait for people to come in. If they don't come, you perceive nothing. At a physical fair, all your senses are addressed. You can see a nice person walking past a booth, they smile at you. You can chat with someone over a coffee. You can eat Wiener sausages at a neighboring booth. None of that is stimulated at a virtual fair. But the most serious argument why virtual fairs in the much-praised form of last year cannot work for our events in Düsseldorf is this: imagine an extreme case. Medica was done virtually last year, very successfully, but still. If you have a fair with 5,000 or 6,000 exhibitors and many different product groups, it's so complex that it cannot be mapped in a user-friendly way virtually. That is simply a fact. I don't say it's forever. People's behavior changes, technology evolves. Maybe someday, but not in the medium term. A virtual event works for a niche topic with 100 or 200 different products or suppliers and maybe 2,000 or 3,000 visitors. But the biggest insight—we hired someone to look into it—is that fair people always think in terms of runtimes. A fair takes place from Tuesday to Friday or Friday to Sunday. What we all—not just Messe Düsseldorf, all organizers worldwide—did at the beginning of the pandemic was say, okay, we have to switch from physical to virtual. And then we took the same old runtime, those four or six days, and said we'll make a virtual event now. But if you lean back for a moment, you immediately realize it's completely bizarre, utterly absurd, to expect a global community of, say, 30,000 or 80,000 people to all entertain themselves for four days on command. That is ridiculous. From a user perspective, you sit in front of a screen. Who sits from 9:30 AM to 5:30 PM in front of a screen listening to various presentations? That's absurd. And then there's time zone differences because people don't travel. That's right. I am a strong advocate of what we call an omnichannel approach, serving different channels to offer a service to our community. That way you have a kind of digital background noise that goes all year round. If you imagine it as a wave diagram, with a yearly fair you have one big spike—the physical fair. But from January 1 to December 31, you have a carpet underlying everything. There are little spikes when we invite a keynote speaker over lunch—not the whole day, but from 12:30 PM to 2 PM—a great topic, and we invite the community. Or we do networking sessions, or we publish industry news. And then we build up a huge wave toward the physical event. This digital background noise continues even during the physical event, and it goes all year. Before, you had zero over the whole year. And the problem was also that virtual events hardly made any money. Last year, many events that I won't mention were celebrated as great virtual successes. But if you look at their income, you see it's a breadless art. It was really just a gap filler. Now we believe we can offer people in our communities—exhibitors, visitors—a digital offering for an annual fee. That could be purely digital, or it could include participation in the fair plus a digital annual program. In combination, it's hybrid.

Jürgen Schremp.

Shanghai.

Digitalization.

Euro. You mean the European Championship? Yes. No, no, I meant the football European Championship. But naturally, for the trade fair, the Drupa is unquestionably the highlight. Besides, during the Drupa you can also watch a football match in the evening. That can be combined.

English.