We are all aware that the consumer aspect of hospitality has been hit immeasurably hard during the Coronavirus pandemic. Yet what about the B-2-B sector, left fighting for survival?
With clear cut provisions finally given to the arts in Rishi Sunak’s Budget 2021, many B-2-B facilitators and providers for meetings and conferences have been left out in the cold yet again. In an industry completely destroyed by Covid-19, directors are desperately looking for ways to survive and help their staff.
Business Matters spoke to Simon Richards, Treasurer of HBAA and Managing Partner of Convenus who said:
‘The Meetings, Events, and Accommodation sector urgently needs extra, specific financial support but once more the Chancellor has chosen to ignore the sector in today’s Budget.
‘There was £700m for arts and sporting institutions; £5bn in grants for shops, hospitality and leisure businesses – Business-to-Consumer sectors. Yet there was no mention of support for meetings, events and accommodation agencies or venues anywhere – the Business-to-Business sectors which have faced all the same issues of having to survive without any income until lockdown eases – and will do so for some months longer as the lead time for events is much longer. Meetings and events businesses ought to be included in the £5bn Retail, Hospitality and Leisure Grants. We will be seeking clarification on this – and explanation if they are not.
‘Agencies require widespread access to the grants already available, but our research found that 20% of our agency members had not been able to access any grants and less than half have received support from existing schemes.
‘The extension of the furlough scheme and another self-employed support scheme to September, the continuing Business Rates Relief and VAT reduction; these will all be welcomed by our industry. These measures have been important to many agencies with 74 per cent of them recently telling us that they wanted an extension to the furlough scheme and 48 per cent requesting 100% rates relief. However, many cannot benefit from the rates relief as they don’t have business premises, either through the nature of their work or because they have invested in technology.
‘Many resilient businesses and talented individuals in this sector are struggling to survive until after 21 June when they can start creating and running major live meetings and events once more. We have said for a year that this will be one of the last sectors to reopen fully and we have ben looking for specific support that acknowledges that factor.
‘We also wanted support for the recovery not just for survival. Event insurance is key to giving event organisers confidence to book. We also require help to reduce and prevent further unemployment but there was no mention of it, although we welcome the increase in incentives to take on apprentices as our industry needs new talent for the future.
‘We also were hoping for urgent support for the mental health of the workforce as well; personal circumstances aside, furloughing and redundancies have taken their toll and many face more months without work or running businesses with no immediate income. Our recent survey found that less than half of agencies and just over half of venues have trained Mental Health First Aiders at a time when they are needed. Financial support for Mental Health at work is more vital than ever.
‘We hope for better news once the details in the Chancellor’s Red Book are published. On the face of it, the neglect and lack of specific support for our industry is deeply disappointing.
‘What more does our industry have to do to be recognised and appreciated at the highest levels of government?’
A review of the B2B live events sector released last year by Arrowpoint Advisory, the dedicated lower mid-market team of Rothschild & Co in the UK, and Plural Strategy, the leading strategy consultancy to the events, media and information industries, revealed that listed event operators are, on average, trading at a 40% discount to valuations at the start of January 2020 as a direct result of COVID-19.
Listed event operators fall into two categories: companies for whom live events comprises the majority of revenue, and diversified media groups for whom live events are a smaller part of their business. Diversified media groups have traded in line with the market, declining 23% on average, whilst event focussed groups have seen valuations reduced by an average of 53%.
Jonny Baynes, Partner at Plural Strategy, commented: ‘Even as the regulatory environment improves, corporate travel restrictions and social distancing requirements at the venues will impact participant numbers. In response we are seeing exhibition and conference organisers taking decisions on a case by case basis as to whether to hold an event, and also being inventive and flexible as to what format the event should take. We expect a hybrid model to play an increasingly prominent role, where a virtual event takes place alongside its live twin, in order to meet the needs of those unable to attend due to travel or other restrictions.’
The crisis has brought the value of digital products into sharp focus for many B2B event operators as both a revenue stream insulated from physical disruption and a strategically valuable means to maintain audience relationships.
Baynes continued: ‘The crisis will likely accelerate change in elements of the events business model as organisers seek to increase their digital capabilities, broaden their interaction with customers and prioritise the growth of non-face to face revenue streams. As a result, one product of the crisis may be more resilient business models that play a significant role in driving the next phase of industry growth.’
Cherry Martin