Although special event professionals aren't predicting the double-digit growth rates for the industry that they have in the past, an informal survey in November by Special Events Magazine reveals that they still expect a respectable 7 percent growth in revenue in 2002, despite the one-two punch of recession and the Sept. 11 attacks.
While the Sept. 11 attacks were a lightning rod of blame for economic woes, most event professionals felt the squeeze of a souring economy earlier in the year. In a reader survey last summer, 46 percent of respondents told Special Events Magazine that the economic slowdown adversely affected their business in 2001.
The Sept. 11 attacks brought another business stall. In the November survey, respondents said that the aftermath led to a 23 percent dip on average in events slated through the end of 2001. Holiday parties specifically took an 11 percent hit, respondents said.
Behind the averages, though, individual experiences vary widely. For example, planners heavily reliant on events for New York-based corporations saw business slated through year-end 2001 drop as much as 90 percent. On the other hand, Los Angeles venue the California Science Center enjoyed a 30 percent boost in business after Sept. 11. “We offer staffing as part of our package to rent the Science Center — which includes a good deal of security staff,” explains the center's Christina Sion. “People want security at events, but they hate to pay extra for it. Our prices are inclusive, and it is working in our favor right now.”
Many economic analysts are predicting a relatively short, mild recession, possibly ending this summer. But the wild card in the forecast is the emotional climate of the public.
“People are fearful of travel, which greatly affects our business,” says event planner Mary Tribble of Tribble Creative Group, Charlotte, N.C. “Counts are down at fund-raisers, sponsorship commitments are down, and attendance at conventions is down.”
The upshot of this volatile mix is described with one word: tight. And budgets will be in the belt-tightening bull's-eye.
“We will be much more judicious in our spending,” says Karen Hansen, manager of special events with the Chicago office of professional services firm Andersen. Her department will “streamline our processes and establish relationships with a preferred list of suppliers and venues to ensure we get the best value for our dollar.”
Tighter budgets from event producers leave little wiggle room for event suppliers. Jim McManus, executive director of sales for Teterboro, N.J.-based party rental giant Party Rental Ltd., points to a climate of “tight budgets and increased competition on prices.”
Also tight — the lead time for producing events. “There is more resistance to commit to budget and attendance guarantees further out from programs,” notes Nicole Marsh of event production company The Arrangers in Denver.
Adding a final headache: newly tightened security, which could lead to “tighter scrutiny of attendees and suppliers,” says Martin Van Keken, head of event production firm MVKA, Vancouver, British Columbia.
LEAN AND KEEN
In the face of the challenges that 2002 will bring, event professionals are vowing to tighten up their own operations.
“We will be a leaner company,” promises Tom Gifford, vice president of operations for Burbank, Calif.-based rental company Abbey Event Services. “I will reduce overhead where possible and ask my employees to reevaluate their roles. I'm looking for a leveraged means to become a better resource for my clients and potential clients.”
If there is one class of employee that won't have to worry about layoffs, it will be the superb salesperson. Event professionals across the board vow to boost their sales and marketing efforts in 2002.
“We have actually deployed our sales force to be in the market more — if we wait for the phone to ring, we will not stay in business,” says Patrick Brennan, director of food and beverage for the Detroit Marriott at Renaissance Center. “We continue to challenge our staff to build even stronger relationships to win the business.” John Bibbo Jr., head of Cleveland-based rental company Event Source, will be sending his sales force “to untapped markets, turning the city upside down.”
To keep business, event professionals predict that they will have to exceed client expectations.
“We are beefing up customer service and looking at ways to create more affordable options for clients,” says Daniel Nardicio, director of marketing for New York-based decor company Pink Inc. “Our new products are even lighter, more uplifting and easier to install in order to reduce labor costs.” In what could be the watchwords for 2002, he says the new products offer “more functionality, less flash.”
In 2002's competitive marketplace, the trick will be to hold on to hard-won business without slashing prices. “I am concerned that out of a mistaken sense of expediency, people will expect their vendors to charge less than the vendors' real cost,” Gifford says. “Obviously no one will be helped by this. We all really need to understand our cost basis and charge accordingly.”
A KINDER, GENTLER BUSINESS?
Although competition will be tough this year, several event professionals are viewing the other guy as an ally.
“We will be partnering in cities where the events are, rather than doing a lot of shipping,” notes designer Sean DeFreitas, head of Dania, Fla.-based Designs by Sean.
Others are calling upon their event colleagues to meet the challenges of 2002 by doing some introspection and finding the best within themselves.
“Each event professional needs to hold their individual ethics level in place,” says Dave Peters, head of Orlando, Fla.-based Absolute Amusements Rental Co. “They need to market the concept and value of event planning and management, keeping a vision of the long term while creating opportunities in the short term. ‘United We Stand’ is more than a cheap T-shirt.”
RESOURCES: Abbey Event Services, 818/569-3838; Absolute Amusements Rental Co., 407/856-3866; Andersen, 312/507-7531; California Science Center, 213/744-7493; Designs by Sean, 954/927-9232; Detroit Marriott at Renaissance Center, 313/568-8000; Event Source, 216/901-0000; MVKA, 604/708-0085; Party Rental Ltd., 888/774-4766; Pink Inc., 212/253-6666; The Arrangers, 303/623-1492; Tribble Creative Group, 704/376-1943
BATTLING BACK FROM 9/11
How did Sept. 11 and its aftermath affect the special events you had slotted for the remainder of 2001?
23% decrease in scheduled events
How did Sept. 11 and its aftermath affect any holiday parties you had scheduled?
11% decrease in scheduled holiday parties
What do you predict will happen in your business in 2002?
7% increase in business
Source: Special Events Magazine informal survey, November 2001