Editor’s Note
This article highlights a new economic study quantifying the MCH Group’s significant contribution to the regional economy, underscoring the tangible value of major trade fairs for host cities like Basel.
A new study aims to show how important the MCH Group is for value creation in Basel. According to a study presented on Wednesday by the economic research institute BAK Economics, the trade fair and marketing company generated a value added of 330 million Swiss francs in Switzerland in 2023. Of this, 201 million francs were generated in the canton of Basel-Stadt.
This translates into francs and centimes: Every franc generated by the MCH Group creates an additional four and a half francs for the industries in the Basel region and 9.4 francs nationwide in Switzerland.
According to the study, the local tourism industry – i.e., hotels and restaurants – benefits the most from the Basel trade fair, with a total of 105 million francs. According to Michael Grass from the BAK management, about one-third of the hotel industry depends on the trade fairs.
But what is the trade fair’s purpose with this value creation study? A look into the past shows that the importance of the trade fair for the Basel region has always been used as an argument when it came to state funding.
Nearly 20 years ago, in 2006, the Basel trade fair had already commissioned a study that quantified the macroeconomic importance of the trade fair company. Back then, the great importance for the region was also emphasized, which benefited the corporation in the political debate.
Because just one year later, the major project “Messezentrum Basel 2012” by architects Herzog & de Meuron was launched. This was intended to modernize the trade fair and congress infrastructure. The state participated in the major project with the blessing of the Grand Council, the Landrat, and the voters of the two cantons.
Thus, state funds flowed into the project, even though the trade fair was already a publicly listed company at the time. This was justified by the fact that without the new construction, holding the Baselworld watch and jewelry fair would no longer be possible, which would have serious consequences for the economy in the Basel region. The final construction costs ultimately amounted to around 430 million Swiss francs, about one-fifth more than originally planned. The project was also slightly scaled down.
From 2017 onwards, the company definitively fell into the red. Furthermore, starting in 2020, the COVID-19 pandemic worsened the situation and led to the demise of the Baselworld watch and jewelry fair.
In 2020, a capital increase followed, in which the canton of Basel-Stadt, as a shareholder, also participated with 24 million francs. The green light for this came from the Grand Council. There were discussions surrounding James Murdoch’s participation in the MCH Group. Since the public sector is involved in the trade fair, there were concerns that in the end, Basel would have to pay and Murdoch would profit.
The next financial injection followed just two years later. The Basel government announced in 2022 that it wanted to participate in the capital increase of the MCH Group. It requested parliament to approve expenditures of up to 34 million francs.
And again, politicians argued with the importance of the trade fair company.
With its trade fairs and congresses, it generates a lot of value added and contributes to Basel’s appeal, the government justified the financial injection at the time.
The BaZ asked MCH Group CEO Florian Faber what purpose he pursues with this study. The goal is a location assessment so that the company’s growth can be better measured in the future, Florian Faber explained upon inquiry.
As an example, Faber cited Art Basel, which is in Basel precisely because the city is an important cultural center. The value chain shows how important the partners are here, the CEO added. Faber did not provide any information on the costs of the study.
The latest figures from the MCH Group give hope that the trend is upward. While the company was still in the red in 2023, a trend reversal seems to be emerging: In the first half of the year, the MCH Group recorded a slight profit.
Still this year, the corporation wants to achieve break-even – meaning costs equal to revenues.
Those responsible are also optimistic for the coming year.
