What’s all the fuss about??
Our World | On 07, Sep 2009
A day does not go by without being asked about the future. The questions range from the positive, “do you think we are about to recover?” to the negative “how many more will close?”. I am asked by hotels, airlines, venues, DMC’s, staff, colleagues, friends and clients. I realise that they are asking me these questions in part because of my considerable financial and economic reputation, but also because they are searching for comfort and consistency. And I am doing the same. It’s the old 8 out 10 cats’ syndrome. If you ask 10 people if the recession is over and 8 say yes, then it is. However if 5 say yes and 5 say no then you keep asking until you get clarity. Of course right now you get predictions of disaster, impending doom and no recovery before 2020 through to improved retail numbers and stock market stability in Q4 2009 with 2010 looking good.
Personally I don’t see any immediate good news on the horizon for the events industry. I do sincerely hope that low interest rates and debt insurance schemes helps us truly reach a full recovery mode as soon as possible. Who wouldn’t?
However, even if all of these economic measures deliver and we see growth in 2010, I believe events will still be under the cosh. It might be a simplistic view, but look at a typical corporate client. Let’s assume that they spent £2m in 2007 on training, conventions, conferences, meetings and incentives. In some sectors that client might still be investing at the same level, but for many others in the banking, IT, retail, automotive, media, insurance and business services sectors they are spending significantly less. Most estimates range from between £0 to maybe £500k. So when recovery comes, how long will it take before they get back to spending £2m again? My best guess would be at least 5 years. Let’s look at incentive travel as an example: you might have taken 200 people to Vietnam in 2008, but chances are this year and possibly next year as well you aren’t going anywhere.
It doesn’t take an economics graduate to work out that if travel returns in 2011, it won’t be the likes of 200 delegates going on a 5 night long haul event. It is more likely to be 75 delegates being sent on a 2 night European programme. So if that is 2011 you perhaps can’t expect a return to the levels achieved in 2008 until 2014 at the earliest, and I would expect re-invest levels in all forms of events to follow a similar pattern.
So where does this leave us all? Well it’s not all bad news, on the basis things will improve, however slowly, if you have already restructured and are surviving, then any improvement however small is still an improvement. We’re very good at adapting to changing conditions, coming up with alternative solutions and surviving, that’s what we do.
Events have suffered from wars in Yugoslavia and the Middle East, bombs in virtually every country and city including in London, Madrid, Istanbul, Majorca and New York and political unrest and demonstrations in South America, Central America, Africa, Middle East and Asia and given the number of countries in the Eurovision Song Contest we need to add Europe to that list. To this list we can add SARS, bird flu, swine flu and any other HN that comes along, plus the odd earthquake, typhoon, hurricane and devastating tsunami. All, against a background of rising fuel prices, global warming, CSR and sustainability issues. So now it’s the turn of deepest and most significant recession since the 1930’s which pretty much pre-dates our industry.
Not sure what all the fuss is about. Put the kettle on and we’ll have a nice cup of tea.