Consumer show organisers to absorb VAT increase

Twitter Facebook Google+ LinkedIn
Several consumer show organisers say they will retain existing ticket prices in the face of the 2.5 per cent VAT increase to avoid potential visitor fallout.The VAT rose from 17.5 per cent to 20 per cent on 4 January and applies to a range of UK goods and services. While exhibition venues, organisers, contractors and suppliers will be required to factor the additional VAT percentage across their products and services, industry representatives point out companies and tradeshows should be able to claim back or offset the additional charge as part of general business tax practices. However, consumer show organisers who include VAT within ticket prices will be forced to either pass on the additional cost to end users, or absorb it and risk lower profits. Although Upper Street Events reviews ticket prices on an ongoing basis, commercial director Dan Holmes told EN it planned to stick with existing rates and absorb additional VAT costs at least until the end of the financial year. The organiser will run its first event of the New Year, the London Art Fair, from 19 January at the Business Design Centre and opted not to adjust the ticket price. “Our budgets [for the financial year] are set already, so we’re just going to take it on the chin for now,” Holmes said. “We have the capacity and financial flexibility to do so.“We’re very visitor focused and realise people want to have a great day out, as well as get good value for money,” he added. VOS Media is also keeping prices as is for 2011 events including next week’s London Bike Show and The Outdoors Show at Excel London. MD Damian Norman said it was important not to inhibit visitor attendance in any way. “We can’t just increase prices just because it’s after 4 January,” he said. “It’s tough enough selling tickets in the current economy – people have less money, and you have to give them more value.“The 2.5 per cent will make a difference across the year, but strategically, passing on this cost as standard isn’t a particularly smart move. Consumer shows need to deliver audiences more than ever before, and putting up any additional barriers for people is cutting off your nose to spite your face,” he added.Rather than increase base-level prices, VOS has introduced a range of “premium” ticket packages over the past year tailored to different shows and visitors, Norman said. These include a premium ticket combining entry to the co-located London Bike Show, Outdoor Show and London International Boat Show with additional offerings such as exclusive maps designed by celebrity adventurer Ray Mears. Those wanting to go to VOS’s Vitality Show in 2011 can also buy a £40 Gourmet Pass including entry to the show, a glass of champagne, three-course meal and products bag, Norman said. “The challenge is to find more creative ways with your offering, rather than being lazy and just passing on the 2.5 per cent increase,” he added. “Very few shows are seeing visitor increases.”MD of the Association of Event Organisers (AEO) Austen Hawkins expected consumer show organisers would eventually increase ticket prices, much like their retailer counterparts. Several retailers, such as John Lewis and Marks and Spencer, have opted to retain prices for most of January, while other stores are introducing the VAT rise as new product lines are released. “I think the public is educated enough [to accept the VAT rise] by the increase in costs in other sectors,” Hawkins claimed. “Ticket price rises may have an affect on attendance, but all businesses selling to consumers are in a similar boat and will be making similar decisions which consumers will have to deal with.”But industry veteran Phil Soar believed many consumer show organisers would try to avoid increasing ticket prices.“Given the importance of price points, I would assume most consumer organisers will keep their prices at £10, £15 or £20 for example and hence lose 2.1 per cent of their income,” he said. “This sounds quite small, but if they are running at a 10 per cent profit margin overall, it obviously has the potential to be rather a large hit.”
Twitter Facebook Google+ LinkedIn

Related Stories

Elsewhere on EN

AEO launches Development Board

AEO launches Development Board

The Association of Event Organisers (AEO) has announced the formation of a Development Board, with the aim of ensuring that the AEO delivers value to all members.
F3 secures Watford FC contract

F3 secures Watford FC contract

F3, the joint venture between One Event Management and Legends of the US, has won a 10-year contract with Watford Football Club.
MA Exhibitions appoints LiveBuzz as exclusive partner

MA Exhibitions appoints LiveBuzz as exclusive partner

MA Exhibitions, the exhibitions arm of media company Mark Allen Group, has appointed LiveBuzz as exclusive registration partner across its entire exhibition portfolio.

WATCH THE EN AWARDS 2016 HIGHLIGHTS


silverstream.tv

Most read Stories

EN Awards People Finalists revealed

EN Awards People Finalists revealed

The first group of the highly anticipated shortlist for the EN Awards has been announced, including Best Newcomer and Best Event Director categories.
Reactions from events industry following Britain’s vote to leave EU

Reactions from events industry following Britain’s vote to leave EU

As the UK has voted to leave the European Union with a 52 per cent majority result, EN has spoken to members of the exhibition and events industry, to gauge their initial reactions on the future of the UK and their businesses.
And the Show category finalists are...

And the Show category finalists are...

The final shortlist group for this year’s EN Awards has been announced, including Best Consumer Show Marketing Campaign, Best Brand Expansion and Best Trade Show.

Latest Features

The big picture

The big picture

Imagine you could find all the photos taken at your event...well now you can, says Gaggletag founder Gideon Summerfield.
The talent of a nation

The talent of a nation

Following the launch of Connect16 this year, EN catches up with founder Nicola McGrane on experiencing the essence of Ireland.
EN30/30 Breakfast Club in November

EN30/30 Breakfast Club in November

Tasting the delicacies of ExCeL London’s River Cottage, members of the EN30 gather to discuss recruitment, working from home and the potential death of email.

Latest Galleries

ESSA 2016 Conference of Things

ESSA 2016 Conference of Things

This year’s ESSA Conference achieved a record attendance of delegates from across the events supplier industry, representing over 100 companies at Ricoh Arena, on 24 November.
The Prosthetics Event 2016

The Prosthetics Event 2016

Exhibition, education and shopping show The Prosthetics Event, returned to Conference Aston in Birmingham for the third consecutive year on 19 November.
World Travel Market London 2016

World Travel Market London 2016

World Travel Market (WTM) London 2016, which took place on 7-9 November at ExCeL London, celebrated its most successful show yet with a joint record attendance of 51,500.

Latest Opinions

Paul Byrom: Opportunity knocks

Paul Byrom: Opportunity knocks

Paul Byrom, AEO chairman and MD at Upper Street Events on the formation and goals of the new AEO Development Board
The height of safe practice

The height of safe practice

Andrew Harrison, ESSA director on continuing to build a robust, safety-first, working culture in events and exhibitions.
All part of the plan

All part of the plan

Kevin Horler, project director of Vividfish Ltd, on the importance of creating an inbound marketing strategy for your next exhibition.