Special Events
Pressure to Discount Still Plagues Some in Party Rental

Pressure to Discount Still Plagues Some in Party Rental

While an improving economy helps some operators bring rates back up, others are stuck in the discount doldrums.

A year ago, Special Events reported that the sour economy and skittish customers led nearly two in three party rental operators to to discount their rates.

Today, the recession has been over "officially" for two years, and many event professionals are beginning to see better business. So—can party rental operators begin bringing their rates back up? The results are mixed.

STIMULUS PACKAGE WORKED

Taylor Creative, with offices in New York, Palm Beach, Fla., and Las Vegas, offered its own "economic stimulus package" from 2009-10, notes vice president of marketing and special events Elle Can. The deal gave clients 10 percent on the rental subtotal "to help meet our clients' budget needs and stimulate sales during the recession," she explains.

But with business firming up, "The discount has been discontinued completely," Can says. Making the return to normal pricing was easier because "the discount was our effort to help clients during a difficult recession, and as such was always positioned as a temporary measure."

Can foresees good business in her market in the second half of 2011.

"For us," Can says, "the big pressures will be continuing to develop new inventory to meet the increased demand and continue to lead the rental market with exclusive items."

RATES STAY SOFT

In contrast, rates have stayed soft at EventRents, says Jim Lisi, president and CEO of the Ventura, Calif.-based company.

It's not that he has to keep discounting; instead, "Overall prices are lower," Lisi explains. "Our competition has lowered, as have we. The winter off-season was our worst in 14 years, and we had only a single month with a year-to-year sales increase in the first half."

For the second half of 2011, "I just don't see the market going anywhere but sideways," Lisi says. "Festivals costs have risen too much here, and they are pulling back because they now don't have the vendor revenue to support the higher cost structure. Universities and schools are under pressure due to state budget cuts, while the income of nonprofits has plunged as some private money is being diverted to the schools now."

But Lisi sees some bright spots ahead. "Because we are in an affluent area, it's my hope that the high end of the market gets tired of holding back, and begins spending again," he says. "I also am looking to the corporate market for some indicators of growth. They have good profitability now; will they spend on events again?"

SELLING THE PRICE-SHOPPER

One hangover left from the recession won't go away anytime soon, many operators say, and that is the price-shopping client.

"Due to the economy, people have learned that they can negotiate for anything--and they are," says Mike Berk, president of M&M The Special Events Co., with operations in Carol Stream, Ill., and Dallas.

"Once people have learned to ask for discounts and or negotiate pricing, it isn’t something that will go away," Berk says. "It has made everyone learn to work smarter."

See the full story in the September-October issue of Special Events.

Graphic by iStockphoto.com/c Talaj

RELATED STORIES FROM SPECIAL EVENTS

Will the Discounting Deluge Sink Party Rental?

Party Rental Deals Pop: A Sign for the Industrty?

Party Rental Forecast 2011

Discounts in Event Rental are a Double-edged Sword

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish