CORPORATE sector spending cuts brought about by the recession will hit the National Exhibition Centre hard in 2009-10.
That was the warning given by the NEC’s chief operating officer, John Hornby, who said scaled-down events would replace large exhibitions as business organisations sought to reduce their costs.
“Our concern is not about events not happening, it is just they will be smaller,” he said. “The exhibitions business was established in the mid-70s and has been through a number of economic downturns, but this is the worst.”
Mr Hornby’s warning came after the NEC Group reported operating profits of £36.5 million for the year to March 31, 2009.
“The exhibition business delivered an acceptable result as incredibly tough conditions started to bite,” he said.
“However, we are planning for 2009-10 to be a very challenging financial year. General economic and competitive conditions will hit the business very hard, and we have seen a material slowdown in corporate conference business at The ICC.
“The corporates are not spending as much money on conferences.”
However, he added that the arenas and Ticket Factory continued to trade very strongly, achieving record profits, “and we very excited about the re-opening of The LG Arena in October of this year with a spectacular launch season”.
Mr Hornby said the NEC management was also pleased that the process of awarding a licence for a large casino in Solihull had been started by the borough council.
“We will be working hard with our partner Genting UK to secure the licence that will enable our leisure and entertainment complex to progress.”
The NEC Group recently completed a programme of 82 redundancies to reduce costs.
“It is always difficult to lose good people but this programme is a necessary part of the steps we have to take to address trading conditions responsibly,” said Mr Hornby.