Official Statement Vol.1 Nov. 16, 2015

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- Regarding Venue Issue of 2020 - Japan Exhibition Association (JEXA) Official Statement Vol.1 Nov.

1 - Regarding Venue Issue of Japan Exhibition Association (JEXA) Official Statement Vol.1 Nov. 16, 2015 JEXA hopes for a successful 2020 Tokyo Olympic and Paralympic Games and will make every effort to help make those hopes a reality. Nevertheless, we request that the Olympic Media Center be built at Tokyo Rinkai Disaster Prevention Park or other appropriate location so that all exhibitions can be held in Tokyo Big Sight as planned. Japan Exhibition Association Chair Tad Ishizumi Vice Chairs Kazunori Arai, Yasushi Kajiwara Shigeo Koshino, Takahiro Matsui Directors, auditors and member companies (excluding exhibition venues) 1. Tokyo Metropolitan Government announces plan On October 22, 2015, the Tokyo Metropolitan Government (TMG) unveiled its Current Plan to exhibition organizers, formally announcing that restrictions would be placed on the use of Tokyo Big Sight to allow for the facility to be used for the 2020 Tokyo Olympic and Paralympic Games (hereafter, Tokyo Olympics ). According to that plan, for the 20 months between April 2019 and November 2020, most of the exhibition halls at Tokyo Big Sight will be taken out of service for use for exhibitions in order for them to be converted for use as the international media center for the Tokyo Olympics. Consequently, East Halls 1-6 and the newly-built East Hall will be unavailable for use, while the entire West Hall will be unavailable from April to October ( See note 1 on page 4.) If this plan is executed, most of the exhibitions scheduled to be held at Tokyo Big Sight will have to be cancelled. ( See note 2) Following the TMG s announcement, exhibitors and other exhibition-related companies have voiced their concerns, noting that the media center plan will be a huge social problem because many companies will face bankruptcy. It will be a bigger problem than the National Stadium, say some. 2. TMG plan may cause serious social issues ( See note 3) 1 Exhibiting companies expected to lose JPY 4 trillion (US$ 35 billion) in revenue Some 90,000 companies exhibit at around 300 exhibitions every year at Tokyo Big Sight, generating total revenue of JPY 3 trillion a year (according to official numbers reported by Tokyo Big Sight). Extending this estimate to 20 months, total sales would reach approximately JPY 5 trillion from 500 exhibitions. If those exhibitions are cancelled, or if their scale is drastically reduced, at minimum exhibitors would be expected to lose out on JPY 4 trillion worth of revenue a devastating blow to the Japanese economy. 1

2 Included in the above estimates are around 20,000 international exhibitors. We can therefore reasonably expect criticism from international companies claiming they are not able to enter the Japanese market a sensitive topic that could become an international issue. 2 Many small and medium-sized enterprises may face financial ruin Most exhibitors are small and medium-sized enterprises (SMEs). Despite have excellent products, many SMEs do not have strong sales channels; for these companies, exhibitions are exceptionally valuable because such events allow them to meet tens of thousands of potential buyers in a single location. Cancelling or drastically reducing the size of these exhibitions will sharply reduce the revenues of SMEs, leaving many in financial difficulties. 3 TMG's plan may lead to indemnification of exhibiting companies Exhibitions are typically held once a year, year after year, at the same location. This is common practice worldwide, and for companies that exhibit in exhibitions it is an important event in their annual corporate calendars. TMG's plan to cancel or drastically reduce the size of exhibitions at Tokyo Big Sight without offering alternative venues could deprive these companies of their ability to sell their products and services, causing them to suffer a severe reduction in revenues. 4 Potential loss of JPY 400 billion (US$ 3.5 billion) in direct economic effects Every year, the roughly 300 exhibitions that are held at Tokyo Big Sight generate an estimated JPY 300 billion worth of business (as reported by Tokyo Big Sight) for 1,000 companies supplying products and services to the exhibition industry (booth design and construction, lighting, manpower, lodging, etc.). Thus the exhibitions held over a period of 20 months would generate an estimated JPY 500 billion in business for these companies. Cancelling or drastically reducing the size of these exhibitions would at minimum lead to a loss of JPY 400 billion (US$ 3.5 billion) in direct economic effects and threaten the viability of many supplier companies. 3. Two options for the media center The following table compares two plans for the media center in terms of cost and potential problems: Plan A Convert Tokyo Big Sight into a media center and cancel exhibitions for 20 months Plan B Construct a media center in the Disaster Prevention Park or other appropriate location 2

3 Exhibitors will lose potential sales approx. JPY 4 trillion 90,000 companies at risk of collapse Deprive companies of the right to sell, leading to potential legal issues Loss of direct economic effect approx. JPY 400 billion 1,000 companies in danger of collapse Costs for alteration and restoration of the venue Tens of billions of JPY (estimate) Exhibitors may decide to switch to exhibitions held overseas and might not return to Japan after the Tokyo Olympics. Cause economic decline Exhibitors can keep potential sales approx. JPY 4 trillion 90,000 companies no longer at risk Direct economic effect maintained approx. JPY 400 billion Construction cost (up to 100,000 SQM) JPY 20 to 50 billion (estimate) The facility built can be converted into an exhibition venue after the Olympics, solving the problem of space shortage at Tokyo Big Sight Stimulate an acceleration in economic development 4. JEXA strongly urges Plan B be adopted for the Media Center With Plan B, not only are we able to ensure the success of the Tokyo Olympics with a new media center, but we are also able to continue to hold 500 exhibitions as usual at Tokyo Big Sight. Exhibitors will still be guaranteed the opportunity to generate revenues of JPY 4 trillion from exhibitions, and we can prevent the collapse of 1,000 exhibition-related companies. Moreover, the facility can be converted into an exhibition venue after the Tokyo Olympics, resolving the current space shortage at Tokyo Big Sight. Even if we spend JPY 20 to 50 billion on the construction of a new media center, we can expect to generate income of JPY 4.4 trillion, or 100 times the cost of construction. Clearly this is the better solution. Some have noted that under existing disaster prevention laws it would be impossible to construct a new media center in the Disaster Prevention Park. Revisiting the laws in question and applying them flexibly would resolve this issue. It is worth noting that the media center could be transformed for use as a roofed shelter in the event of an emergency. That said, we are willing to consider alternative sites appropriate for the media center. Under Plan A, the cost of constructing a new facility (JPY billion) would be saved but at the loss to the Japanese economy of potential business opportunities worth JPY 4.4 trillion. Furthermore, estimates are that conversion of Tokyo Big Sight into the media center and then restoring it to an exhibition facility will cost several tens of billions of yen. Plan A is the wrong choice. 3

Consideration of the long-term damage to the Japanese exhibition industry that will be caused by 20 months of cancelled exhibitions must also be added to the above estimates.

4 Consideration of the long-term damage to the Japanese exhibition industry that will be caused by 20 months of cancelled exhibitions must also be added to the above estimates. Many exhibitors and visitors will not return to Japan and the economy will suffer as a result. The host countries of the three most recent Olympic Games (Beijing, London and Rio de Janeiro) all constructed purpose-built media centers and not a single exhibition had to be cancelled. Such a stance can be considered to be the standard approach worldwide. For all of the above reasons above, Japan should immediately abandon Plan A and adopt Plan B. [Construction location and size] In the petition submitted by JEXA to Governor Masuzoe of Tokyo on September 11, 2015, we propose building a new facility of 50,000 square meters, but the size was revised to 100,000 square meters upon the advice of experts who said it should be as big as possible. North West Kokusai Tenjijo Seimon Mae Station Kokusai Tenjijo Station Washington Hotel Disaster Prevention Base Cancer Institute Hospital Disaster Prevention Park (132,000m 2 ) Facility for the press center (100,000m 2 ) East Tokyo Big Sight West Exhibition Hall East Exhibition Hall South - End of Statement *(Note 1) As of Dec. 16, 2015, we have revised our estimates for the amount of space and length of time that it will not be possible to use Tokyo Big Sight. These more conservative estimates do not fundamentally alter our position that Plan A is not workable. These new, conservative estimates based on TMG s announcement are that an average 79% of Tokyo Big Sight s total space will not be available for the 20 months from April 2019 to November 2020, and that this average rises to 95% for the eight months from April to November

5 *(Note 2) Our claim that almost all exhibitions scheduled to be held at Tokyo Big Sight are likely to be cancelled derives from the following: (A) Even if we manage to conduct exhibitions during the Plan A calendar, the events will be an average 21% of their normal scale across the 20 months and a mere 5% of their current scale during the April-November 2020 period. Under such circumstances it can be expected that most exhibitors and visitors would seek alternative opportunities during this period. The holding of exhibitions will be extremely challenging. (B) Because existing exhibition venues across Japan are almost always fully booked, the country lacks the space to hold the kind of large-scale exhibitions that are normally held at Tokyo Big Sight. Frankly speaking, there is no alternative to Tokyo Big Sight. *(Note 3) As of Dec. 28, 2015, we have revised our estimates for revenue loss and economic effect. These more conservative estimates do not fundamentally alter our position that Plan A is not workable. 5

PRO/CON: Should the Olympics stay in one place?

PRO/CON: Should the Olympics stay in one place? By Tribune News Service, adapted by Newsela staff on 08.18.16 Word Count 1,293 In this July 2015 photo, the Olympic Park for the 2016 Olympics is under construction