Peter Palmer: Event Hostess Index: A Sign of Economic Health?

The annual Specialty Equipment Market Association Show in Las Vegas, better known as SEMA, was held recently and it did not disappoint. Each year, it brings together thousands of automotive performance part manufacturers, alongside companies who make shiny wheels, burbling exhaust systems, restoration parts, and everything between.

I have attended Automechanika Frankfurt, PRI, the Los Angeles Auto Show, and many others, but there is no other event that brings together the industry like SEMA.

Period.

SEMA exhibitors are split into 36 product categories, grouped together across five halls, and four principal outdoor areas. Three of the outdoor areas are large enough to host tracks where visitors sit shotgun for drifting demonstrations and off-road truck rides. The show sprawls across the entire Las Vegas Convention Center and spills over into the adjacent Westgate Resort.

SEMA is not just big, it is massive.

Access is limited to industry professionals, and more than 130,000 attend, which makes SEMA an excellent barometer for the health of the automotive performance industry.

We could look at total attendance, exhibitor count, and square footage trends to gain a reasonably accurate understanding of the health of the industry. For example, 2014 attendance was reported between 125,000 and 145,000. Although exhibitor participation is more challenging to unwrap. Is it the total number of companies exhibiting, the number of booths, or the manufacturer count? Depending on your answer, the results ranged from 2,400 to 10,000 this year.

Nonetheless, after a decade of attendance, I have developed a keen, albeit non-scientific, method of measuring the health of the $36 billion automotive performance aftermarket, with SEMA as my laboratory.

The Event Hostesses Index (EHI) is my alternative measurement for the health of SEMA and other similar automotive industry shows. My first year (2005) was during a peak era for SEMA. Light vehicle sales, an underlying driver of the aftermarket, reached a high that year that will only be eclipsed this year. In 2005, SEMA reflected a nationwide euphoria for the consumption of all things automotive. It was a playground and everything competed for my attention – the new Ram Mega Cab, Pontiac Solstice, and countless other unique vehicles and go-fast parts.

And then there were the Event Hostesses.

Thousands of them.

It’s no surprise these women are hired. They can bring tremendous attention to a booth and generate long lines, particularly where they are willing to pose and chat with attendees. Do these Event Hostesses encourage buyers to stop and make plans to purchase a product?

Perhaps.

Some exhibitors are uncertain of their effectiveness and when they feel less confident in their businesses, they decrease their employment of Hostesses. This was clear between 2008 and 2013, when the exhibitor count dipped slightly but the Hostess count plummeted. There is now a trend toward more Lead Generators, which are trained ambassadors of exhibitor products. These women look like the traditional Crowd Gatherers we think of as Hostesses, but cost substantially more. Do either of these Hostess types make economic sense for exhibitors? I am not here to answer that question, but at $350 a day for a Crowd Gatherer and $1,000 for a Lead Generator, they need to deliver a measurable return.

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Similar vendors are grouped together at the show, and because of the vast differences between product types, the Hostess trends differ between halls. The South Hall, Lower Level for example, did not see anywhere near the severity of the Hostess decrease between 2008 and 2013 experienced elsewhere.

This is where wheel manufacturers are found.

If you have noticed vehicles with massive 24″ wheels ,riding on hyper-thin tires in your town, then you can image the bling and Hostess heavy booths the wheel manufacturers put together.

These Hostesses appear to be guaranteed employment, regardless of the state of the economy.

In the North Hall, home to the Audio and Electronics section, another trend is playing out. The North Hall was once a stable bastion of Hostesses, but as the 12 volt aftermarket has shifted away from replacement stereos, car alarms, and 15″ speakers, so too have gone the Hostesses. The products in the South Hall have been gradually replaced by telematics, smart phone integration, and 360 degree cameras. And the Hostesses have been replaced by business development professionals wearing golf shirts and khakis, rather than tube tops and daisy dukes.

In 2013 and 2014 the Hostesses began a significant comeback. I spoke with a pair of agencies in Las Vegas who were happy to place Hostesses for the show. Both reported that after a dip in demand between 2008 and 2011, they have been placing more Hostesses each year, particularly Lead Generators.

The EHI has now shown growth for six consecutive years. The exuberance of 2005 to 2007 has not returned, but regardless of the inevitable, post-show SEMA press release welcoming another record year, 2015 was very busy. And in the end, SEMA data, such as an eight percent growth in industry sales in 2014, is a sound indicator of health.

But for me, the more entertaining and easily observable indicator of industry health is the Event Hostess Index, which continued to demonstrate upward expansion in 2015.

*Seth Parks is an auto industry veteran, entrepreneur, and Seattle Seahawks fan.
Follow him on Twitter: @mseth_parks