Readers are very aware I have been concerned about what I consider to be price gouging led by a couple of the main contractors in the expo supply chain. I have become aware that one company has been encouraging other contractors to increase their pricing to a common price point – which I thought is illegal!
The silly thing is, just like the story of a cancelled show citing covid, the industry has very few secrets and we all know what is going on. In my case I have a higher belief and investment in the longevity of the industry. These actions are not lost on the industry and are not conducive to a full industry return to events.
I do believe the actions of some contractors who pushed the shell scheme modular rate to as low as $21 per sqm did a disservice for all. Back in the 90’s when exhibitions were held in the SCEC the average price for modular was up around $34 a sqm, the average pre-covid rate was around $26 per sqm. So, an increase should not be out of the question. However, like all things, how much is fair? The same company leading the collusion conversation have presented clients with a $10 per sq m increase (for exactly the same product I might add, as the last year has seen no new investment in product) making the 2023 modular rate now between $35-$38 per sq m which is a big increase (around 40%) to absorb in one year.
As I have previously mentioned, the major reasons for increasing costs have been labour and fuel, and yes I get that those costs have to be passed on – but have any cost savings been passed on?
The irony is that the same company pushing others to increase their prices is the same one that led the price war that drove basic modular down to levels lower than the early nineties and when it suited them to “buy business”. I assume they will have no hesitation to drop prices again as they seek market control, and this should not be lost on anyone either.
There has been talk for as long as I can remember about having a recommended retail hire price for set items like modular shell scheme and furniture, however the industry has never adopted it and market forces have always dominated the price.
Maybe this is something the industry association representing the sector (EEAA) should be having a look at. Say the pricing structure was agreed to by member organisations and given the stamp of approval from, and published by, EEAA. After all, other industry associations do it – plumbers and GPs are just two examples. Granted, in those two examples the members have to be licenced. And let’s face it, in the entire exhibition industry very few licences are required – rigging, vehicles (fork lifts, etc), electricians, security and first aid are all I can think of.