“From one day to the next, we have nothing left to do,” says Sebastian Goers, head of stock market manufacturer Lüco in Norderstedt, a little bewildered. Because many exchanges were canceled or postponed for fear of Corona, all orders for Lüco broke down in just three days for the next two months. “The Corona crisis has hit us with full force,” says the fourth-generation entrepreneur. He had to enroll short-term work for his 30 employees.
Especially the postponement of the Hamburg Internorga gastrobeurs hit Lüco hard. The company had orders for more than 100 stands, in addition to several special areas. “Everything was ready in our hall and needs to be loaded the next day,” says Goers. “So we have to charge exhibitors at least 80 percent of our fees.” After all, his company had carved out the stalls, booked mechanics, trucks, hotels and rental furniture.
But not every exhibitor understands this. Visitors are currently negotiating who pays what. The service provider has to cover its costs, but at the same time does not want to bury a customer. “This is certainly annoying for exhibiting companies, but for small stock market builders it is often about survival.”
Within a few weeks, the fear of the highly contagious coronavirus has almost completely crippled German stock market trading. The hardware fair in Cologne, the Light + Building in Frankfurt or the Hannover Messe were moved. The ITB in Berlin and the Leipzig Books Fair had to be completely cancelled. Meanwhile, the federal government’s recommendation nationwide is in effect to temporarily forgo major events. Several federal states have already banned events with more than 1,000 participants. The stock market industry is unsettled.
In addition to exhibition organisers and exhibitors, the crisis is hitting the various stock exchange service providers particularly hard. Several stock market builders, technicians, mechanics, caterers and furniture distributors fear for their existence. Many are small business owners and have only a thin financial cushion.
Cancellations and postponements due to the new coronavirus only caused damage of 890 million euros to the stock market construction industry by Monday. That calculated trade association Famab. Including outages for affiliated service providers such as catering companies, event agencies, technology service providers or furniture suppliers, the damage amounts to approximately 2.13 billion euros. “Unfortunately, a relaxation is not to be expected due to the current uncertainty”, fears Famab CEO Jörn Huber.
If the authorities prohibit the holding of a fair, the exhibitor can rely on force majeure. He also does not have to pay his service providers, or at least not in full. “The stock market builders and service providers are often the last in the chain and usually stay at their expense,” says lawyer Martin Glöckner, lawyer for the Trade Association for Trade Fairs and Exhibitions (Fama).
Michael Schuberth, owner of Schuberth International Messebau in Berlin, is one of the victims. He had built four stalls for the short-term cancelled itB travel fair. Also the stand for the tour operator China Tours, which was the first company to file for bankruptcy because of Corona. “Unfortunately, we won’t see any money,” fears the boss of a three-man operation. Schuberth relies on financial support from politics.
Hoping for autumn
The Federal Ministry of Economic Affairs hotline calls for more than 100 calls a day, mainly from small businesses in the exhibition and events industry. “We already supply liquidity to companies,” it says. The existing framework for this is sufficient, but can also be extended.
Even for hotels and restaurants, important business breaks down without trade fairs. “The cancellation of the book fair is a disaster,” said Holm Retsch, director of Dehoga of the Leipzig Regional Association. Nearly 300,000 visitors to the fair would cancel. The book fair is the main source of sale in March, and most guests usually stay for an entire week.
About 80 percent of leipzig hotels have to charge cancellation fees after the cancellation of the book fair. Even if many guests are hoping for goodwill. “If they don’t, they’re going bankrupt,” Retsch said. “Because hoteliers and restaurateurs have to keep paying their staff, rent or rent.”
The stock market industry generates more than 28 billion euros annually for the German economy as a whole. This was calculated by the Ifo Institute. The cancellations and deferral of exchanges, which were known until Monday, could mean economic losses of 10 percent, the stock exchange agency Auma predicts. Auma chairman Philip Harting warns: “More than 24,000 jobs are being cut and the Treasury is losing more than €470 million in tax revenue.”
Messebauer Goers hopes he can bridge the losing streak thanks to shortwork, guarantees and interest-free loans. Above all, he hopes that none of his carpenters will move to the construction industry in the meantime. Because in the summer and autumn, when many fairs are drawn up, it becomes all the busier for him. Then it will be difficult to find mechanics, for example. Goers stresses: “The stock market industry is doing well in principle. Before Corona, we had bulging order books.”
More: Live streams are hard to replace. A comment from Katrin Terpitz.