Rent vs Own.  A White Paper by Catalyst Exhibits

Generally speaking, the benefits and liabilities of exhibit ownership versus exhibit rental are, at best, unclearly perceived and, at worst, completely misunderstood.  Sadly, in our experience this generalization applies equally to consumers and purveyors of exhibit services.  Justifications for exhibit rental or purchase are infrequently based upon thorough understanding of the situational realities involved.  The purpose of this document is not to endorse one approach or another, but to elucidate the situational realities of rental versus purchase in as concise a manner as possible.

This paper, one of many Catalyst Exhibits papers, is simultaneously a broad exploration of "rental versus ownership realities" and a narrow exploration of the costs of either approach.  In other words, our purpose here is expository rather than argumentative.   The following discussion may, at times, brush up against persuasive issues like efficiency, optimization of a program, flexibility and tradeshow IMPACT... but it will go no further.  This particular paper is not an argument for or against anything.  It is merely about the realities of rental costs versus ownership costs.

Also within these pages you will find a cursory overview of the tax/accounting ramifications of Rental versus Purchase (Capital Expenditures versus Operating Expenses/Marketing Expenses).  It should be noted however that this document is not an in-depth exploration of the subject.

You will also find some spreadsheets here, toward the back, but before we get there some foundational issues must be addressed.

An important distinction to make at the onset of any discussion on rental costs versus ownership costs is the difference between an Exhibit and an Exhibit Program.  These are terms that can mean radically different things.  And then again, they can be synonymous.  It depends upon the exhibitor.

For example, there are many solid exhibitors whose programs consist of just one show per year.  These players are invariably from certain industries wherein the "key" (or perhaps only) exhibit opportunity exists but once annually, biennially or triennially.  Exhibit professionals in these industries quite correctly interpret Exhibits and Exhibit Programs as congruent and essentially equivalent things.  Other industries (e.g. Pharmaceuticals) serve many market segments simultaneously (e.g. Oncologists, Cardiologists, etc.) and deploy Exhibit Programs comprised of a large number of annual tradeshows to reach their market audiences.  In these cases, Exhibits and Exhibit Programs are completely different ideas.  Exhibit professionals in either group require smart, effective and valuable solutions to their exhibit challenges.   In our view, both groups are equally legitimate exhibitors.

As mentioned above, later in this document we will "run some numbers" to compare rental costs with purchase costs.  Such a thing is no easy task to execute with any accuracy or meaning.  There are many variables in play. We will - out of necessity - make some assumptions and establish some parameters. 

But more than this, we will "run the numbers" for three basic "kinds" of exhibitors:

• Exhibitors who participate in ONE show per year.
• Exhibitors who participate in THREE shows per year.
• Exhibitors who participate in TWENTY shows per year.¹

These are three different kinds of exhibit programs.

Each benefits differently from rental and or purchase options.

The financial issues are manifold and even complex.  Available options (both rental and purchase) to consumers are varied in quality and functionality.  Strategies are numerous, some showing greater efficacy than others.  Moreover, there are "strategy combinations" in play.  For example, when we "run the numbers" we will compare THREE approaches:

• Straight Purchase
• Custom Rental Booth
• Hybrid Rental AND Purchase (Rent Big, Buy Small.)

Again, one approach is not superior to the other two.²  They are just different, because business segments are different.

We maintain our own opinions of course and it would be impossible to remain uncolored by them.  Though every effort has been made to avoid "conclusionary" observations, there are some obstacles to overcome in order to even begin a balanced discussion.  You see, there are two pervasive "myths" in the minds and on the tongues of the industry today:

• The Myth of Cost
• The Myth of Quality

This paper begins with these kinds of qualitative discussions:

• We will briefly address the myths of cost and quality. 
• Then, for the purposes of framing the discussion, we will overview some "categories" of exhibits.

We conclude in quantitative terms:

After spending a bit of energy discussing the Product Life Cycle (PLC) and how it could or should impact an effective exhibit initiative, we will sharpen our metaphorical pencils and "run the numbers" through various scenarios to demonstrate these concepts.

What you won't see is an overall conclusion.  We'll leave that to you.  Our purpose here is not to persuade you one way or another, but merely to inform.  We believe in our business.  We know that an informed prospect or customer is the best kind.

Our hope is that this document will be somehow useful to exhibit professionals.  We try not to prattle on too long, but the fact is that this paper is a little thick.  We know that exhibit professionals are busy people. Please accept our apologies in advance.

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