AFTER MARKING TIME for the last few years, the event rental industry thinks it's time for a rebound in business.
Hall's Rental Service in Chicago is “cautiously optimistic,” according to president Jack Luft. “The social end is still strong, and corporate spending is gradually increasing.”
Larry Ott, sales manager for Newtown, Pa.-based Newtown Party Center, describes the current market as an “awakening from too-long a sleep.”
But every segment of the special event industry is getting a wake-up call: Even though business looks bigger, budgets don't. According to the Special Events Magazine annual industry forecast [January 2004], tight budgets remain the No. 1 stumbling block for the industry, according to 60 percent of in-house event planners and nearly 80 percent of independents.
And event rental is no exception. The challenge is getting “bang for the customers' buck,” notes Mike Berk, president of M&M The Special Events Co., Carol Stream, Ill. Event rental companies must be able to “accommodate shrinking budgets and still provide pizzazz.”
Even as business recovers, competition remains tough. Paul Turney, managing director of Spaceworks in Surrey, England, warns against a “shrinking marketplace that has caused substantial price wars with rental rates of popular items.”
To stay in competition, event rental companies have to stay lean and mean. Lance York, one of the owners of New York-based TriServe Party Rentals, forecasts overall growth of 10 percent to 15 percent in the event rental industry in the next two years, but notes that profitable companies will be those that keep an eye on costs through such measures as lean staffing levels and smart purchasing. “Although our cost of overhead has increased, through tight cost control, our profitability remains excellent,” he says.
CAN'T SAY ‘CAN'T’
To win customers in 2004, event rental companies must make “yes” the only answer the customer hears. “We definitely feel ourselves being more flexible and rolling with the times,” notes Joe Valente, head of Arlington, Va.-based DC Rental. “Our business strategies and the development of new markets, often many miles away, have kept us going strong.”
As corporate business dried up in recent years, many in the event industry turned to social events to survive, and some in event rental believe that this strategy still holds good. “It's best to serve corporate and the general public to ensure revenues,” notes Marjolaine Hamel, head of Lou-Tec En Fête, Terrebonne, Quebec.
Ironically, even though consolidation is a hot topic in event rental, several operators stress that finding a distinctive niche is crucial to survival. “The future right now tends to point towards a continued demand for specialty items that are unique and different and create individuality for each event,” notes Barry Reynolds, general manager of Denver-based Butler Rents. “Companies that offer the greatest choice of options have a definite edge.”
The new mantra seems to be that if the customer wants it, stock it. “The one-stop shop is a must,” notes Tom Wright, president of Rent-Rite West, based in Denver. “We are providing this in everything from linen rentals to mega-truss tents.”
SERVE TO SURVIVE
Indeed, the customer of 2004 will want more than just the latest linen and classiest chargers. Winning companies will provide “service, service, service,” says Terry Turner, owner of All Occasions Party Rentals in Knoxville, Tenn. “One thing remains constant, and that is our customers always expect excellent service and quality rental products. Equipment maintenance, quality control and communication are keys to deliver what the customer expects. Those companies that provide these will survive. The others … ?”
Last month, Chicago Party Rental/Braun Event & Tent began operations out of its new 101,000-square-foot facility just outside of Chicago, offering clients 9,000 square feet of office/showroom space and 92,000 square feet of warehouse area. The company had been working out of two buildings, but “last-minute orders and changes to existing orders became very cumbersome and costly for us,” notes marketing director Valerie Braun. “The consolidation of the two buildings provides us the capability of serving our clients more efficiently and affords us additional flexibility in meeting our clients' needs.”
“Create added value for your customers; otherwise, you are a commodity,” warns Chuck Miller, head of Torrance, Calif.-based Aztec Tents & Events. “Corporate is spending lots of money, but you must understand what they want — not what we want them to have. Be prepared to make investments in equipment that meets your customers' desires. Spend time and money hiring and keeping quality employees — success will follow.”
GO TO THE SOURCE
With fully 83 percent of event rental companies planning to add new inventory as a competitive strategy this year, the question arises: Where are they finding the exciting new stuff to offer customers?
The No. 1 resource for new products is trade shows, followed closely by trade magazines such as Special Events. Indeed, many respondents list “trade shows and trade magazines” in the same breath.
“You get to see a wide variety of new items, and you get creative ideas of what you can do with your existing stock,” notes one respondent. Besides giving buyers the chance to see the product up close, trade shows also enable event rental companies to network. “Talking with other renters across the country” is invaluable, one rental company tells us.
No. 3 on the list of product sources is the reason event rental companies are in business in the first place — the client. “We talk with our customers to see what they would like to see offered in their rental setups,” says one respondent. Another says, “We listen to our clients and try to find out what they want. Then we research it though magazines such as Special Events or browse the Internet. We also track interest through our phones and hits to our Web site.” Another says, “We work with clients to find out what they want. Then we bring it in and sell the heck out of it.”
Coming in fourth on the list of product sources is the manufacturer, whom many event rental companies regard as a partner. “We work closely with our manufacturers and distributors,” notes one rental company.
Event rental companies list the Internet as their No. 5 option for product sourcing. “The Internet is my first resource for anything and everything that I need,” says one respondent.
But not all rental companies will share their sourcing strat-egies. “This is our best-kept secret,” one says.
All Occasions Party Rentals, 865/690-5668; Aztec Tents & Events, 310/328-5060; Butler Rents, 303/388-5971; Chicago Party Rental/Braun Event & Tent, 708/485-8010; DC Rental, 703/671-7300; Hall's Rental Service, 847/929-2222; Lou-Tec En Fête, 866/456-8832; M&M The Special Events Co., 630/871-9999; Newtown Party Center, 215/860-0819; Rent-Rite West, 303/399-9947; Spaceworks, +44 1883 744557; TriServe Party Rentals, 212/288-7384