Convention industry insiders disdainfully call them “outboarders” — those vendors who set up shop in a hotel suite near a trade show site to promote their products.
The industry sees the vendors as parasites who latch onto the host convention and reap the advantages of the often-considerable resources spent on organizing the show and drawing a crowd — without paying their share of the costs.
The vendors, on the other hand, argue that they are suffering in the weak economy and that the rock-bottom rates offered by some hotels help them stretch their marketing budgets.
Caught in the middle of this tug of war are the hotels, which are increasingly being asked to keep out the interlopers.
While unsanctioned exhibits are not new, they appear to be on the rise. They became an issue at the annual Consumer Electronics Show last month in Las Vegas, one of the largest trade shows in the United States. According to technology bloggers and others attending the show, hotel security people forced some vendors to vacate suites in which they were demonstrating products.
“Outboarding is wrong,” said Jason Oxman, the senior vice president of industry affairs for the Consumer Electronics Association, which produces the Consumer Electronics Show each January. “An outboarder takes advantage of the significant investment a trade show makes.”
But Mr. Oxman denied that the association had stepped up enforcement against the vendors, suggesting that the crackdown was instituted by the hotels themselves. “Our antennas are raised for people that try and circumvent the show process,” said Ron Reese, vice president of communications for Las Vegas Sands, the parent company of two official show hotels, the Palazzo Las Vegas and the Venetian Las Vegas. He said the association spent tens of millions each year promoting and producing the show, which draws 120,000 participants. Professional exhibit managers who play by the rules and pay to exhibit also resent vendors who come to town but do not exhibit on the trade show floor, he said.
Nor is the electronics association alone in its sentiments about the outside vendors. “This instance with the C.E.S. is going to raise some awareness,” said John Foster, a convention industry lawyer. Although the show took place only last month, Mr. Foster said he had already been approached by several organizers of smaller events eager to learn how they could thwart the outside exhibitors. “Whenever you get a big show that goes through an incident like this, that publicity generates a lot of interest in how to stop the problem,” he added.
The electronics association pointed to a long-standing policy prohibiting any type of consumer electronics-related events taking place in Las Vegas over the show dates. Mr. Oxman acknowledged, though, that this rule was almost impossible to enforce if vendors choose from among the many hotels in Las Vegas that do not have a contract with the association.
“Everybody does it,” said one hardware vendor who spoke on condition of anonymity to avoid speaking out publicly against the electronics association, which retaliates against vendors who run unsanctioned events by stripping them of the points a vendor can earn by exhibiting legitimately. More points translate to a better selection of show floor space for future shows. Those with no points to forfeit can be kicked out of the association.
The vendor said her company chose the Palazzo because it was inexpensive, and received a verbal assurance that its exhibit would be permitted.
What happened instead, she said, was that hotel security forced the company to dismantle its demonstrations and remove all product-marketing materials. The vendor referred to the eviction as the result of a “miscommunication.” Mr. Reese of the Sands said all guests were presented with criteria for their stay upon check-in; a prohibition on in-room exhibiting is among the rules.
Bob Buskirk, who attended the electronics show and owns a Web site, ThinkComputers, that reviews hardware and software products, said he had “never been kicked out of a hotel room or even heard of companies being kicked out.” But this January, he said, two of his meetings were disrupted when the vendors were ejected by hotel security. “From what I’ve heard anecdotally, the amount of unlicensed vendors was certainlly the most it’s been in recent memory,” said Mr. Reese of the Sands.
Mr. Buskirk, who has been attending the show for five years, said that the show’s exhibits seemed to take up much less space this year. A spokeswoman for the association confirmed that the show’s size dropped to 1.4 million attendees this year, from 1.7 million last year.
Steven Rudner, a hospitality industry lawyer who represents hotels, countered that stipulations like those from the electronics association restrict a hotel’s ability to do business. “To switch the burden of enforcing this on a hotel seems to be completely unreasonable,” Mr. Rudner said. Some groups, he said, go so far as to try and make the hotel responsible for screening all guests to insure that no competitors book suites or meeting space that could be used for private events.
Lawyers who represent trade show producers said this kind of strong language is necessary to protect the investments made by hosts and exhibitors, especially in an economy where hotels might be tempted to turn a blind eye to unsanctioned exhibits to book needed business. “They want to play both sides of it,” said Barbara Dunn, a partner at the convention industry law firm, Howe & Hutton Ltd. “There’s no question that the hotel industry is hurting.”
In some cases, she said, vendors who want to skirt a trade show’s policies will deliberately obscure their affiliation or their plans to run an exhibit in a suite, making enforcement even harder.
Some other trade shows have used less confrontational methods, which they say are just as effective. Megan Tanel, vice president of exhibitions and events for the Association of Equipment Manufacturers, said violations of exhibitor rules at her shows go to a committee made up of other industry members.
“It comes down to your peers, customers and competitors to decide your fate,” she said. This usually works, but when it does not, she says she tries to convince vendors it is in their best interests to be an official part of the show.