FLAWS are beginning to be highlighted in the subsidy scheme announced by the Hong Kong government to help city’s struggling trade-show industry.
Organisers and suppliers across Hong Kong’s business events community are in the midst of a severe cash crunch after suffering from the effects from a double whammy of ongoing street protests that erupted last year followed by Covid-19.
Certain measures in the regional government’s package to support the ailing MICE industry have been sharply criticised by the leader of the city’s largest business event body during a webinar held by UFI, the global exhibition organisers’ association.
Stuart Bailey, chairman of HKECIA (Hong Kong Exhibition and Convention Industry Association), said though local organisers were grateful for the government being proactive by offering support, he pointed out four main reasons why most business event organisers would feel let down by the scheme:
Venue subsidies – At a time of severe cashflow problems, organisers must first pay the venue then claim the fee with a view to being reimbursed six to eight weeks later.
Small-business grants – Local SMEs can apply for a grant of about US$300 towards an exhibition booth, but this only applies shows operated by Hong Kong Trade Development Council, a body set up by the government to promote trade.
Salary subsidies – This offers employers up to 50 per cent of a person’s wage, but it’s capped at US$1,500 – “a relatively small amount given what average salaries are here in Hong Kong within our industry”, said Bailey who added that this was “small beer” compared to what was being made available by the Singapore government.
No help with rent – With Hongkongers paying some of the highest rents in the world, Bailey said nothing has been done to ease the pressure on small businesses in terms of commercial rent. A subsidy scheme was needed “in order to help people pay the rent and keep the lights on”.
“Though subsidy for venue hire is gratefully accepted, and we are keen to see how we can use this money to the best advantage… it’s slightly disappointing in the way it’s being administered.
“Organisers are not able to get the venue paid for free by the government,” Bailey told Tuesday’s webinar, which examined how governments in Asia were supporting the exhibition industry’s recovery, was viewed by nearly 200 people worldwide and featured a panel of exhibition leaders from China, Singapore and Thailand.
A spokesman for the Hong Kong government’s Commerce and Economic Development Bureau said $1,020 million was set aside in the first round of an anti-Epidemic Fund to set up the Convention and Exhibition Industry Subsidy Scheme to support the industry.
“HKTDC will not enjoy any venue rental subsidy under the scheme. In other words, exhibitors and participants of exhibitions and international conventions will benefit from participation fee reduction either through HKTDC or private organisers.
“On the more general issue of cash flow, to address this problem of enterprises, including those in the C&E industry, the Government will provide time-limited financial support to employers via the Employment Support Scheme under the second round of AEF to retain their employees who will otherwise be made redundant,” the bureau spokesman said.
For the full government response, follow here
Bailey said exhibition businesses were still grateful for the Hong Kong government’s help amid the Covid-19 crisis, but cash flow was the primary problem for companies.
“We could really use that money so we could pump it into other areas such as visitor promotion or making sure our suppliers are getting paid. Yes, it’s great, but we wish it could be done slightly better,” he said.
The help for SMEs to exhibit was welcomed, but local industry operators believe it should not be limited to shows run by the HKTDC.
“Again, we believe it’s a good initiative but it’s an initiative that should be able to be enjoyed by small companies wanting to join any exhibition.”
Bailey added that sales leads needed to be developed, kick-started and put in the pipeline through trade exhibitions regardless of whether or not the shows were run by HKTDC.
“The main government support to SMEs for HKTDC shows should be made available for every show.”
Trade-show suppliers such as audiovisual technicians and stand builders were being severely hit, Bailey said. “Historically they have pivoted to retail and have done pop-ups etcetera – but retail has also been decimated. We need to make sure our suppliers are there when we get back.”
Region-wide there was growing optimism regarding “travel bubbles” between territories that had more control over coronavirus outbreaks with Singapore partnering with Southeast Asian nations and Hong Kong being part of a North Asia travel zone consisting of Greater China, Japan and South Korea.
Guidelines issued by China’s top political body, the State Council, on gatherings for business event were another strong indication.
Michael Duck, executive vice president at Informa Markets in Asia, said he knew of business events that were expected to go ahead in China earlier than expected. “This would be good news for the rest of the industry going forward,” he said.
In Shanghai, SNIEC general manager Michael Kruppe said a semi-conductor show at the venue was going ahead and management were liaising with public security and health officials for smaller-scale shows next month.