The past three years have inundated the world with enough nerve-racking challenges to last a lifetime. The pandemic hit all industries hard, but the event rental industry was especially impacted because most special events were canceled or postponed. On the bright side, as we are nearing the final quarter of 2022 and looking ahead, the American Rental Association (ARA) can confidently report that the event rental industry is showing all signs of a full return to pre-pandemic revenue levels with an optimistic outlook for the future. And even though there are still challenges to overcome, several exciting trends have emerged for the event industry scene.
Without a doubt, the lifting of many pandemic gathering restrictions spurred the strong comeback of the event rental industry. Rental companies are experiencing an increased amount of event inquiries compared to the past two years, with revenue levels on par with or exceeding pre-pandemic 2019. While there remains an underlying concern of future COVID variant-related shutdowns and ongoing supply chain challenges, many companies are reporting record revenue in 2022.
Statistics prove that things are looking up. ARA’s 2022 Q2 Economic Impact Survey showed a high percentage of event rental companies reporting their fourth quarter in a row of improving conditions. This includes improving economic conditions compared to the prior year and consistent year-over-year revenue growth.
Additionally, in Q2 of 2022, 90% of ARA members reported the same or improving economic conditions compared to the previous quarter. Only 10% of members reported a worsening of conditions. In Q3 of 2022, optimism remained high with 79% of ARA members expecting increased revenue compared to the same quarter in the prior year.
Of course, the current optimism is tempered by rising business costs. More than 50% of ARA members have taken proactive steps to counter those costs by focusing on operational efficiencies, proactive pricing reviews, and adding necessary service fees and charges.
Before the pandemic, the event rental industry took many of the services they provided for granted and did not charge—or undercharged—for them. Examples include not charging “week of” fees for last-minute or emergency orders, undercharging for delivery and installation labor, and not increasing rental product pricing at the same pace as the rest of the economy.
If the pandemic showed us anything about the special event rental industry, it’s how essential it is. The public’s desire to gather and celebrate once-in-a-lifetime events does not stop. But rising business costs highlighted the paramount need to charge appropriately for products and services provided.
Overcoming current concerns
It’s no surprise that labor shortages and supply chain issues are two main factors influencing event rentals.
Increased staffing levels pre-pandemic allowed event rental companies greater flexibility to address last-minute or unexpected challenges. That same luxury does not exist today with many operators struggling to return to 2019 employee levels. This has highlighted the importance and focus on effective communication between rental companies and event planners, so no detail gets overlooked potentially creating an unforeseen need for additional labor that might not be available. Of course, event planners are seeking out reliable rental companies with a proven record of accomplishment of delivering on their promises, and for good reason—their reputation depends on it.
Likewise, rental companies have gotten more selective with the orders they take, focusing on higher-profit jobs they know they can handle with less risk for costly labor issues. Rental companies are striving to make realistic promises and then exceed them. Best of all, event planners and rental companies are working and growing together via a close, trusted, mutually beneficial partnership.
While supply chain issues are improving, there are still long wait times for new equipment and many events-related products to be available. Almost 75% of ARA members are reporting moderate to extreme negative impact of supply chain issues and availability of new equipment. However, rental companies are improvising through custom-built products from local vendors, updating existing inventory to extend the products’ rental life, and subrental agreements to increase capacity when needed.
Overall, despite recent challenges, the event rental industry is strong and healthy, and the ARA predicts a positive forecast for future growth. Event planners can count on rental companies as their trusted partner for all their rental needs, with each partner benefiting from the relationship and contributing to each other’s success.
Stay tuned for the rest of our State of the Industry 2022!
To view part 4, click here.