Like many of my contemporaries, I came away from this winter’s trade shows – IAAPA in particular – feeling worried. Why? Because, for the first time that I can recall in nearly 20 years it was obvious that there was “trouble at the mill” – in other words the amusement industry was not in good shape.

Perhaps it was because there was a shortfall of around 300 companies from previous IAAPA events and a significant drop in attendance, or that only around 20 companies were introducing new product that influenced my feelings.

Sure there appeared to be plenty of optimism from both exhibitor and visitor, but, as the days went on, it became evident that, whilst there was plenty of talk there seemed to be little action, certainly not in comparison with recent years shows.

IAAPA is meant to reflect the state of the industry and is, usually, a fairly vibrant affair with a certain, identifiable “buzz”. And that is why I am worried. It didn’t happen.

This is in no way a criticism of the organisers or IAAPA, it is simply a statement based upon observation and discussion with others, both exhibitor and visitor.

It was not to be unexpected as, with only one exception, the major trade shows held during 2006 in the Middle East, Europe and Far East were also similarly lacking in numbers.

However, rather than adopt a “gloom & doom” attitude this seems to me a perfect time for the industry, all sides, to have a long, hard look at the way things are, and what they could be in the future.

Positive step forward

One event at IAAPA did grasp one of the major issues facing our industry by bringing together many leading trade associations to highlight the effects of the copying culture and breaches of intellectual property rights. This has started a dialogue that will, hopefully, turn into real action on behalf of their members, and the industry in general.

This issue alone has a profound effect on everyone, in particular those companies that spend time, effort and large sums of money to bring a new product to market, only to find that, within a short period of time, anything up to 10 other companies are producing something very, very similar.

It is damaging because, at the end of the day, the original manufacturer looses out by having invested in R&D costs, and losing profits (including recuperating R&D costs). Finally, everyone loses out because the subsequent competitive pricing between suppliers erodes profitability to unsustainable levels.

The amusement & leisure industry was built on the ideals of change and innovation. New products and ideas were the norm for many years, but now these appear to be the preserve of the few.

Regrettably it seems to have become acceptable that others may offer their own version without some challenge. Do we really need to legally protect every single idea, design or trademark? The answer is surely a resounding “yes”.

More professional approach

As a first act of change it seems evident that manufacturers and suppliers in this industry must now act more ‘professionally’ if they are to survive in the long term. Marketing is key to survival, but this can only be successfully implemented provided sound market research has also been carried out.

As the organiser of a number of amusement industry exhibitions in developing countries myself during the 1990’s it was surprising to find that the majority of companies invited to take part in these expos had little foreknowledge of the host country, let alone its market potential. As had become the habit they relied almost totally on the efforts of the organiser to produce that information for them.

Venture capitalists

Another worrying factor about today’s industry is the effects of the changes of ownership of many of the major amusement parks to venture capital funds and the influence these new investors now wield.

These types of organisations exist to make money – whether by investing in the product or service or through sales of buildings and land. Which applies to the amusement industry?

Just as the big food supermarkets have reduced the profitability of suppliers who wish to do business with them is this something likely to happen with amusement equipment suppliers?

One solution is for manufacturers to produce equipment and offer services that are, in the main, unique to them as a means of ensuring a fair return for their innovation and investment.

Exhibitions and the internet

Primarily trade exhibitions are designed to provide an opportunity for buyers to see new equipment or other products or services, as well offering educational seminars or workshops, that will enhance their business profitability.

However the internet has taken away much of the “initial contact” aspect and fewer people are attending trade shows. (As an aside it is interesting to note that only one trade show actually employs the services of an independent auditor to provide an accurate record of attendees). Is it time for fewer shows?

Only one exhibition I am aware of boasted that almost half it attendees were new to the amusement business. Considering the current market conditions perhaps others should be seeking ways to encourage potential newcomers too.

Many years ago I asked a window-dresser in a large London store why the display was so sparse. She replied: “The display is only a tease with a view to enticing the customer to come in and find out more.”

The internet is a very useful tool but really is only a “shop window” for the manufacturer/supplier. Too much information can have a negative effect.

Trade associations

The role of the various amusement industry trade associations does not appear to have changed much over many years.

Now, with our industry seemingly struggling, particularly outside of the Asian countries, it may be time for these institutions to adapt their member services to help their members meet these new challenges.

A combination of membership makes it difficult, sometimes, to know who precisely a particular association is supposed to be supporting. Some are operator-led with an added associate membership of suppliers; others are supplier-led only. Yet others are for operators only and others for suppliers only.

Surely we are one industry? Operators, manufacturers, suppliers, does it really matter? Would it not be best for each association to have joint membership and learn to work together more closely on issues that face and affect everyone?

The previously mentioned joint meeting at the IAAPA over copying is a good first step along this road and could form the benchmark for future joint activities.

Virtual reality or facing reality?

There are times when it is right to put on a brave face and pretend that all is well – there are times too when a substitute for the real thing is also OK.

But, at the end of the day this harsh commercial world demands that we face reality - and the reality is that changes have to be made in the way we do business. No business stands still, and the amusement industry is not immune from any of the problems that affect other types of business.

One of the areas in the UK that one manufacturers trade association is looking closely at is the development of the farm attractions market.

Greater educational opportunities for potential and existing attractions operators are needed to enable them to maximise benefits for their businesses and profitability.

The resources and experience are out there and there are more than enough people willing to learn. The amusement industry per se has more than enough resolve the make the changes that are necessary to keep it viable, profitable and fun. After all, that’s what the business is all about. Isn’t it?

Gerry Robinson represents Trade Shows International (TSI) Ltd.

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