After two lackluster years, the special event profession is poised for a rebound in 2003 — if the economy can overcome some big ifs.
READY FOR THE REBOUND
Most event professionals believe that the doldrums of the past two years are — for the most part — the trough of a normal business cycle, and that the climate is ripe for an upswing in special events. “When the economy does finally turn around, there will be an explosion of business activity,” says Jack Luft, president of Niles, Ill.-based party rental firm Hall's Rental Service. “And we must be ready to handle it whenever it comes.” Luft foresees a slow first quarter, with growing strength afterward.
The wild card — one that is driving the event industry wild — is continued uncertainty. “Even in cases where clients know they are doing events, they are waiting until the last possible moment before signing a contract,” explains Paul Creighton, CSEP, vice president of Orlando, Fla.-based entertainment producer T. Skorman Productions. Clients are cautious because they must “cover themselves in case their stock goes into the tank, their CEO winds up on the wrong side of a Wall Street Journal article, or we end up in a war with Iraq.”
The result: an industry stuck in neutral. “We are in the midst of the planning/budgeting process now, and there are lots of things our business wants to accomplish,” explains Kathleen Moore, vice president/global event manager of New York-based financial services firm JP Morgan Treasury Services. “But we are being asked to keep our budgets flat or below last year.”
Even so, the majority of event professionals see unique opportunities in the New Year.
In the face of tight budgets, clients that formerly relied on a few core vendors and didn't put events out to bid are now doing so. “Businesses and even brides and grooms are looking around, and that upsets the apple cart a bit,” says Laurence Whiting, president of catering firm Now We're Cooking in San Francisco.
Many event pros are looking beyond their traditional business niche. For example, San Diego-based event production firm Quantum Productions had focused on a corporate client base, but last year added a division that handles only weddings and other social events. “We expect this division to be doing quite well during our next big season,” says Quantum president Pam Navarre. “It is an obvious market for us and one we have finally taken time to actively pursue.”
Atlanta-based event producer Legendary Events has been finding new business its own backyard. With the cutback in corporate travel, “More companies are entertaining at home,” says Tony Conway, CMP, a company owner. As a result, Legendary Events is seeing “much more business staying in our own city.”
As they wait for the rebound, event pros are responding to the tight market with a combination of discipline and flexibility.
To stretch budgets, “Our staff is great at re-creating and reusing much of our inventory,” explains Cheryl Fish, vice president of MGM Mirage Events in Las Vegas. “Our staff understands the need to work efficiently. We work smart and watch the overtime.”
Hall's Rental Service has called upon its own vendors to accommodate last-minute orders instead of long-range delivery dates. “This gives us the flexibility to deal with the uncertain economy,” Luft says.
Event production firm Vok Dams Gruppe, based in Wuppertal, Germany, has created an in-house purchasing department “with the task of helping our client find and negotiate cost-efficient vendors,” explains managing director Colja Dams.
Even in the face of tight money, many event professionals are making strategic investments in their operations in anticipation of better days.
“New equipment, always new equipment,” says Tom Gifford, operations vice president for Abbey Event Services, Rancho Dominguez, Calif. “I am looking for better products at lower cost.”
“We have hired a full-time marketing company to ensure that we are no longer the best-kept secret in the special event industry,” Creighton says. This approach has already paid off for Whiting. “I took a risk last year in hiring another salesperson who does nothing but cold calling; it definitely brought in business that I would not have had,” he says.
The pressure to cut prices without cutting out profits demands “as much flexibility as possible without giving away the store,” Whiting notes. He may, for example, hold the line on his price for filet mignon, “but throw in truffles and an extra hors d'oeuvre. We give clients the feeling that they are getting a little more bang for the buck, but still holding the line on profitability.”
“I am looking for vendors who are interested in understanding my business and adapting themselves to meet my needs,” Gifford says. “It is amazing how much cooperation and mutual benefit can be realized by deliberately sitting down and understanding one another's situation and process.”
Fish warns, however, that too much flexibility can be risky: “It will be important to have legal contracts signed off by clients where deposits are non-refundable and cancellation dates are clearly spelled out.”
Now more than ever, event professionals must make it clear that special events are more than fun; they are functional.
“We are less interested in entertaining clients and more interested in educating them about what we can do for them,” Moore explains. “As an event planner, my responsibility is to provide an atmosphere in which we can do business. That doesn't mean we can't have fun. We just hosted several events at a trade show in New Orleans that featured fabulous music and food, and our clients showed up in droves and didn't want to leave!”
“2003 will be the year where all communication efforts need to have a reason,” Dams says. “The special event measures have to come from this reason and — at the end of the day — have to deliver proven results.”