Paul Walters, Lecturer, Staffordshire Business School
The event sector which includes hospitality and tourism, has seen a significant decline in commercial activity, since March 2020 and as we come to the close for the year 2020. Many small to medium size business saw a complete loss of business, this included the festival industry which had somewhere in the region of 7 million visitors attending festivals in the UK each year. It is reported, the UK prior to the COVID restrictions had somewhere in the region of 400 plus festivals throughout the UK each year. Even the largest event provider on the planet ‘Live Nation’ experienced financial difficulty and received $500 million from a Saudi investment fund. Live Nation furloughed 20% of its staff to save $600 million and Live Nation artists were informed by the company to take a pay cut. This was a similar situation and mirrored in most cases across the Event Sector.
Companies within the sector that had Interruption Insurance, attempted to make a claim because of the Government shut down. The sector will fully understand what is meant by ‘interruption Insurance’. As some insurance companies decided to decline claims on ‘Interruption Insurance. Insurance companies argued that many claims did not specify or have insurance for the specific type of interruption. However, there was some light at the end of the tunnel, a High Court ruling on the 15th September 2020 which represented 370,000 policy holders who are some way clearer to an answer and pay out under their interruption insurance claim. So, what do we learn from this, it is not just necessary to have interruption insurance but also specify the type of interruption be that Government shut down, a pandemic and what type of virus, be that SARS, Zika or any other known type.
Some event companies within the sector made an early attempt to re-engage with their consumers through a different medium. Those that made the immediate change rather than cancel maintained a presence in the commercial marketplace and some saw a significant increase in revenue.
If you haven’t heard of Tomorrowland outdoor music festival, let me refocus your attention. This is a festival that takes place in Belgium and has a 15 year history. In 2019 Tomorrowland had 250,000 attendees at the festival site. When the pandemic hit the global economy, Tomorrowland didn’t cancel or postpone, they created over a period of three months an online virtual festival. Two million people registered for a ticket and 400,000 people received an invite. Some commentators say the industry in the main wasn’t quick to respond to the change to the environment, thus providing a short-term alternative solution for their customers.
In the North East of England, we saw the first licensed outdoor music event that ran for a period of 6 weeks. With a maximum capacity of attendees each day of 2500, contained in their own Covid secure zones, a maximum of six per zone. The event was sponsored by Virgin money as title sponsor. For the event to have a return on investment, a schedule of live performances over six weeks was the only solution.
So, the question on everyone’s lips, will the event industry recover and what will it look like in 2021 going forwards.
There is no guarantee for this virus to completely dissipate from society even with a vaccine and we as a nation may experience another rise in transmission during 2021 and possible government shutdowns. The events industry must be flexible and ready to respond to the change in the environment to maintain some financial stability and continued growth. Alternative methods for delivering events should be considered and factored into the planning process with a viable contingency if immediate change is required.
Get your Hunter Wellington Boots on and book a ticket for Parklife outdoor music festival September 2021.