The remarkable drop in oil prices since last June has been a mixed blessing for the event industry. For some event pros, low oil prices have meant more money for clients to spend on events. But for pros who serve energy clients, the result has been just the opposite.
HEADQUARTERS HEADACHES Deborah Elias, head of Houston-based Elias Events in Houston, sees the problem of falling oil prices from a front-row seat. A corporate event specialist and multiple Gala Award winner, Elias notes the toll that falling oil prices are taking on Houston, the epicenter of U.S. oil company headquarters.
Houston-based "Schlumberger has laid off 9,000 employees," Elias says, "as have BP Products and Apache Corp.," also based in Houston. Only yesterday, Houston-based Halliburton announced 6,400 job cuts.
Until the price of oil rises, Elias sees a continuing problem for clients in her region. "Houston is an oil city," she says, "and we thrive when the price of oil is higher."
On the plus side, Elias notes, "The cost of living in Houston is still low, and so the real estate market is still doing well—thank God."
To keep her business strong, Elias says she is focusing on her social and wedding clients "believe it or not. They are a recession-proof business."
SLOWING THE STAMPEDE A similar problem is plaguing the legendary Calgary Stampede, the mammoth, 10-day annual rodeo and festival that draws one million visitors every July to Calgary, Alberta. The stampede's signature event is the chuck wagon race, a wild and wooly competition that hands out a $100,000 prize to the winner.
But in energy-rich Calgary, the drop in oil prices is hurting the advertising budgets of companies that traditionally pay to place their logos on the wagon tarps, according to an article in the Globe and Mail. "Oil affects everything as it is key to Alberta's economy," Kurt Bensmiller, winner of last year's 10-day Rangeland Derby, told the Globe and Mail.
LOWER PRICES, BIGGER BUDGETS While event budgets in Houston are getting hit by falling oil prices, event planners in nearby Dallas seem to be reaping benefits.
"Oddly enough, while shaking the gas and petroleum producing industry, the falling gas and oil prices do not seem to be having a negative effect—yet--on the Dallas-Fort Worth business climate," says Jim Monroe, CSEP, CMP, head of Dallas-based James C. Monroe and Associates. "In fact, they seem to be adding to the perception of an improving general economy."
Monroe and his team are playing it cool, avoiding any big moves to capitalize on lower oil prices. "We are not overextending ourselves," he says. "We are enjoying the continuing business growth and watching cautiously in case there is an economic downturn."
Tanya Posavatz, president and CFO of Austin, Texas-based Clink, agrees. "Our portfolio of clients isn’t heavy in the oil and gas industry, so the fall in prices hasn’t affected us negatively," she explains. "If anything, I think that many of our clients have a little more cash to spend on events because of the fall in prices--though that’s just a hunch."
THE 'OIL-PATCH' BRIDE Weddding planner Robyn Martin, head of The Wedding Belle in Edmond, Okla., is in a part of the U.S. that is "immersed in the oil and gas industry," she says. "My client is, typically, high-end/high-profile and many of my clients are 'oil patch' brides. However, my business is up more than 50 percent this year over last year and, last year was not a bad year! So, I don’t think that the falling oil and gas prices are affecting me as a wedding planner."
Martin notes that despite economic ups and downs, "couples still get married." "They may not spend as much or are more cautious about how they spend,"she adds. "I am seeing a trend of smaller guest count as a way to keep budgets in line. I don’t think weddings are necessarily 'recession-proof,' but I don’t think they suffer like other industry sectors."
Damon Holditch, CSEP, CERP, has Marquee Rents outlets in Austin and San Antonio. At the moment, "We have not seen any decline—yet," he says. "Our main business is weddings and nonprofits. The weddings will happen, and the nonprofits are very good at fundraising." He adds that his team "is still calling on our oil-field clients."
PRICES GOING BACK UP? Whether the industry loves or hates the current low oil prices, it's a situation that is likely to change soon. According to a report released yesterday by the International Energy Agency, the global oil glut is abating and a price rebound "seems inevitable," the Wall Street Journal reports.
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