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2 November 2018

“A region’s potential depends on the effective management of its existing facilities”

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The market for convention and exhibition activities and the organization of business events in Russia is actively evolving, but lags behind the global market in terms of the availability of infrastructure. Proxy Centre Director Sergey Lazutkin told BG correspondent Anastasia Tsybina about the struggle among cities to host major events, industry trends, and issues that are important to customers and the audience.

BUSINESS GUIDE: Which Russian regions are most developed in terms of organizing and hosting business events?
SERGEY LAZUTKIN: Moscow and St. Petersburg remain the leading cities on this market, of course, because they have all the infrastructure to host major events, whether we’re talking about the economy, politics, or sports. These cities are the most prepared: there are no problems with exhibition space, transport infrastructure, or hotels. For example, the ExpoForum Exhibition Centre in St. Petersburg is a modern facility that meets all the requirements for preparing events.
Looking at other regions, it’s worth mentioning cities where major international events have been held in recent years. In 2012, the APEC summit was held in Vladivostok, and all the relevant infrastructure was prepared and put together for the upcoming event. Modern buildings were built at Far Eastern Federal University on Russky Island, which are now in high demand during the annual Eastern Economic Forum and other projects. I would be remiss not to mention Sochi, where not only sports facilities were built for the Olympics, but other infrastructure facilities as well. The main media centre building of the Olympic Games is used as a convention centre that hosts various events, including the Russian Investment Forum, which is held annually in February. Another example is Ufa, where the SCO and BRICS summits were held in 2015 and 2016. It now has a modern congress centre, hotels, and a renovated airport. In 2020, the next SCO and BRICS summits will be held in Chelyabinsk, which will subsequently become another city on the Russian map that has created the conditions for hosting various conventions and business events.
All the cities where the World Cup matches were held are no exception, either, since the World Cup is not only about building stadiums and hotels, but also building related facilities for various organizational structures that can be used to support convention activities.

BG: What’s the potential for using the Lenexpo venue with the emergence of ExpoForum, and which sites would be better to place at this location now?
SL: Following the construction of the ExpoForum, the prospects for using Lenexpo for convention and exhibition activities are very unclear. So I think that this micro-district can expect major transformations in the coming years.

BG: Which cities, besides Chelyabinsk, do you see having the potential to organize major business events?
SL: Infrastructure is not built for hypothetical projects. As a rule, first an idea is hatched and a decision is made to hold an event on a national scale, and then a whole set of requirements, ideas, and plans that need to be implemented are generated for it. And that is a sound approach. For example, Yekaterinburg is vying to host the major international exhibition Expo 2025. If this city is selected by the organizer, its infrastructure will change fundamentally. That means a modern exhibition centre and related facilities will appear there based on the expected number of guests, participants, and the need for their accommodation and transportation.
On the other hand, the potential to become a convention centre not only involves building new facilities, but also effectively managing existing facilities by the regional authorities. In this regard, we can cite the example of Astrakhan, where a rather large event takes place – the TechnoCaspian-2017 International Caspian Technology Forum, even though no major facilities have been built for convention activities.

BG: What do you think a region’s development is related to in this sense – the active position of its authorities or the extent of economic development?
SL: The initiative taken by the local authorities is one of those key messages that influences the choice of a venue for a major international event. Federal structures are not likely to force the regions to hold any kind of event without their readiness and initiative. In Chelyabinsk, for instance, everything started with a request by the governor to the president, stating that they were ready to host the upcoming SCO and BRICS.
Not a single regional leader would turn down an international event because such projects entail investment, upgraded infrastructure, amenities, and the opportunity to make a name for the region on a global scale. When the cities that were to host the World Cup matches were selected, the largest centres were the first ones to make the list, of course. But one of the goals was to find a city that is little known internationally. Of all the options that were considered, Saransk was chosen because the leadership of the Republic of Mordovia actively battled for the right to host matches even though this city had none of the required infrastructure at all. Now, after a new airport, hotels, and other facilities have been built, it has gained enormous potential for the development of tourism, and interest in this region has increased significantly.

BG: What topics and sectors of the economy are most relevant today and in demand among event customers and audiences?
SL: There are no topics that have not been addressed during major business forums. There are issues in all areas of the economy that require public discussion and debate. Events are held each year in all industries, and the larger the industry, the more events are held on this topic. Much attention has recently been devoted to environmental issues. There is Ecotech, which is rapidly developing and could potentially become one of the most significant events on the environment that is held on a regular basis around the world. We were involved in organizing it and saw how many diverse delegates it brought together and the interest it generated.

BG: How do convention activities in Russia look against the backdrop of global practices and how important is our market in global trends?
SL: It’s based on the readiness of infrastructure and the demand among potential participants. And this area of activity is highly developed around the world. When we come to any major city in Europe, we at the very least see hotels that are fully prepared for local events: halls with equipment, appliances, and furniture. I’m not even talking about the largest exhibition venues, which Europe has an enormous amount of.
In recent years, Russia has been rapidly building up its infrastructure to host events at a fitting level. While we are still far behind Europe in terms of scale, this lead is shrinking.

BG: Do crises seriously affect this market?
SL: During a crisis, any potential customer sequesters its budgets and slashes expenses on convention and exhibition activities above all else: instead of three events a year, it holds one or reduces the budget of each individual event. This is a bad thing for us as providers because we always want to implement a project in a high quality manner and on a large scale. But at the moment, this market is growing despite the external conditions.