What do turtles, molasses in January, and the economic recovery have in common? They all move slowly.
The event rental industry has shaken off some of the uncertainty about the economic outlook that has dogged the industry for the past few years. A total of 80 percent of respondents say they will handle as many or more events in 2013 than they did last year. Only 2 percent expect to handle fewer events this year.
The findings come from a study conducted annually by Penton Media, parent company of Special Events magazine.
It's significant to note that Special Events collected rental's responses from Oct. 20 through Nov. 13 last year — in time for the U.S. presidential race to be resolved on Nov. 6. And while that question at least is settled for the industry, the still-muddled outlook for the economy worldwide has the industry moving forward — but in fits and starts. At press time, the dreaded “fiscal cliff” debate is still leaving business hanging over whether taxes in the U.S. will go up.
INVESTING IN INVENTORY
But the survey brings some good news. In a welcome sign of confidence, a whopping 89 percent of rental operators are investing in new inventory — a figure not seen since the boom days of 2008.
CORT Event Furnishings is on an inventory roll, according to director of marketing and product development Kevin Dana, based in South San Francisco, Calif.
“For 2013, we've added an extension to our ‘Endless’ seating to allow clients to utilize the popular modular seating for banquets, conferences and dining, and we've added a communal bar table to address the changing ways clients use furnishings for networking,” Dana says. He adds, “We've expanded our indoor/outdoor collections to address the growing demand for furnishings that can be used anywhere.”
And in another positive sign, 13 percent of respondents say they are adding new locations — a double-digit figure not seen since good old 2007 and a far cry from the miserable 3 percent of 2010.
Also looking up: hiring. The percentage of companies saying they plan to add staff is up for the third year straight, to 38 percent.
For Mike Berk, head of M&M the Special Events Co., hiring great staff gives him the competitive edge.
“We have been adding additional sales and customer service people to improve on our already outstanding service,” says the owner of oper-ations in Chicago and Dallas. “We are working on killing our customers with service, which we've been hearing has been lacking in many of our competitors.”
CAUGHT IN THE MIDDLE
But offsetting the good news is the bad. And the No. 1 challenge this year, rental operators say, is the pain of being whipsawed between rising costs and pressure by clients to hold down prices. After fading away for the two prior years, this challenge zoomed up to first place in this year's survey.
As evidence of this, only 13 percent of respondents think they can raise prices, a figure that dropped sharply from the 30 percent who planned to do so last year.
And while “streamlining operations” sounds like an ideal way to cut costs, only 36 percent say they are doing so this year, down from 46 percent last year. And that's likely because they've already streamlined as much as they can.
“We have built a fantastic team and run a very tight and lean business, so I feel very prepared to weather any storm as we have for the last five decades,” says Dan Hooks, CERP, president of Party Reflections, with operations in Charlotte and Raleigh/Durham, N.C.
Hooks voices the concern many in the business community feel over how far government might go to collect taxes to offset deficits, hindering business' ability to create needed jobs.
“I have to admit that this business environment feels different and unsupported by the government,” Hooks says. “It is almost as though every news report blames the country's situation on some business or CEO for making too much money or being too successful. Who changed the American Dream and forgot to tell me?”
Government's partisan bickering is holding the recovery back, Berk maintains.
“The [U.S.] Congress needs to find a ‘reasonable’ solution to the budget and tax issues facing us,” he says. “If this can be accomplished, it is likely that we will see a continued slow improvement in the business climate that we've seen for the last 12 to 18 months.”
NEW YEAR, NEW BUSINESS
How will the number of special events you handle this year compare with last year?
We will handle more this year
We will handle approximately the same number
We will handle fewer this year
Unsure/no answer 2013
The entire study is available for a nominal fee; send an email here