8 Uncomfortable Truths About The Events Industry Recovery

Last week, I had a conversation with an old colleague of mine, who like so many, has lost his job as a result of the impact of COVID-19. The impact to the events industry has been devastating. And while there are many who are predicting a return to physical events by mid-2021, and we all hope against hope that we'll get back to some semblance of normal, the fact of the matter is, we won't.

I'm not saying events will never come back, however, it will take far longer to get back to physical events at scale, and these events will be forever changed as a result. Here's why.

1. Nothing has changed. There is no cure, no vaccine in sight, and when there is a vaccine available, it will most likely work more like the influenza vaccine and require annual administration. We're now in phase three for eight vaccines according to the New York Times. Phase three typically takes 1-4 years, and while we may be fast tracking these, it will still take time. MIT states that typically only 14% of drugs in phase 3 are ultimately approved by the FDA. Covid-19, and its future mutations is here to stay, and evidence suggests we do not develop full immunity and can be reinfected.
2. Once a vaccine is available, it will take time to administer, possibly a year or more. This is due to factors like: the logistics of manufacturing enough doses to cover the population (latest news indicates we'll need at least two doses each based on current trials), the ability of the healthcare industry to inoculate 330 million people (and that's just here in the US), and the anti-vax movement. The Washington Post reports 30% don't believe the government can force vaccinations, and 9% are anti-vax. Herd immunity requires 70-90%+ population immunity, depending on the disease.
3. The economic recovery is slower than expected. By some accounts, we are at 78% of where we were back in March. The B2C and service sectors were immediately impacted by the shutdown. B2B companies are just recently seeing the negative impacts. We have an unemployment rate that's over 10%, and while that's better than the nearly 15% we saw just a few months ago, there are some jobs that just won't be coming back, and the last 5-10% will be the most difficult. The government is pulling back on stimulus. And while we're hoping for a v-shaped recovery, it's looking more and more like the Verizon checkmark logo. Consumers are quickly becoming cash-strapped and spending is shrinking. B2B companies are seeing their pipelines diminish, and are starting to make some difficult decisions.
4. The travel industry and infrastructure will take time to recover. Airlines took a 93% hit, hotels, 40%, and rental cars 73%. Business travel, which accounts for the lion's share of profit for most travel enterprises will come back slowly, in phases according to McKinsey. Furloughs, layoffs, and mothballing or sales of equipment, will further diminish capacity and re-ramp time. People will change careers where possible to make ends meet. Less so for pilots, but airport personnel, flight attendants, baggage handlers, TSA employees, rental car employees, hospitality employees all need to seek gainful employment, and with a 2-3 year recovery, will be forced to do something else.
5. The event industry will take time to come back. Well over 90% of events were canceled or postponed initially. Hundreds of thousands of event industry employees have experienced pay cuts, been furloughed, or let go. For some the pivot to virtual events has been helpful, but these digital tactics require a different skill set in many cases, and simply taking a live event, and trying to replicate it virtually, is a band-aid solution. While some have seen success here, the truth is, the pipeline that is closing as a result of virtual events in many cases was started months before Covid-19 came into play and things were closer to normal. The supply chain for event A/V equipment and fabrication materials is diminished, production companies are operating at a small fraction of their pre-pandemic operation, agencies are closing, and talent is fleeing to other careers where they can find more stable jobs.
6. Digital innovation is accelerating. Many agree that virtual events simply cannot take the place of physical events in their current form. There are several key differences between the two, the most important of which is attendee-to-attendee interaction. As an industry, we've not solved for this. That said, I've noted many top-tier technology companies investing in just this kind of innovative disruption. With hundreds of major event hosts, sponsors and exhibitors now committed to 100% digital approaches through 2021, you can bet this will further force innovation. I recently read an article about a company who has their team meetings in the Red Dead Redemption game. Back in April, Fortnite hosted a Travis Scott concert in game. While traditional virtual event platforms have fallen flat with their formulaic approaches to networking, I think the video game space is the place to watch. The future is here, we're just looking in the wrong place. Lifelong friendships are sparked in game through player-to-player collaboration. The same can hold true for B2B relationships if we can make it work. Couple this with advances in AI-assisted matchmaking, and we're onto something.
7. Human behavior has changed. Survey after survey have indicated that people are open to going back to physical events. That said, these same surveys also indicate that people will be far more selective of the events the attend. There are some who will remain squeamish about large, public engagements moving forward. Events will no longer be casual, but purposeful, and attendees will seek out content and experiences they cannot get anywhere else, more than ever. Events must truly be something special to attract a critical mass of attendees. We've also exposed an entire generation of would-be event attendees to virtual events. And while these platforms have been around for a long time, even luddites have become expert users of the technology, and have become comfortable with it. For many, consuming content virtually, and even getting the education they need, or access to experts has been facilitated effectively through digital platforms. Not to mention, they can attend these events wearing their business pajamas. At the very least, events must be hybrid in the future to attract a full audience and remain relevant. The de-urbanization of business has begun. No one will want to commute after spending a year or more at home. We're also seeing a sociological shift in the value we place on being at home, with our families, or with close friends. We're exploring our local communities on bicycles and kayaks, and there is a resurgence in localization, with people supporting their local businesses, friends, neighbors and local communities. We value where we live more, and want to stay.
8. It will be more difficult for physical event producers to make money. With people being more selective of the events they attend, a higher investment will need to be made on event experiences and hybridization. For many companies who've yet been able to quantify the financial value or ROI of events, this becomes a no-brainer. With social distancing and safety protocols in place, venue capacity will be diminished. With companies finding success in digital tactics or smaller local events, there will be lower investments in large, centralized events. With the downsizing of the travel and hospitality industry, it will be harder to get to where you want to go. With the economic impact of the pandemic, companies and people alike will be investing less in travel and events, not more. If producers cannot make the necessary revenue to host effective events, they'll stop hosting them.

So what are we to do? Is it over? Is it really over? No, but I believe the event industry is forever changed. Look for more, better digital sales and marketing approaches. Innovation will grow exponentially in this space. More brands will take control of their pipeline and experiences, and create "third-party" -ish experiences to attract new prospects - often working directly with partners. For physical events, be prepared for a ramp up that does not really begin until 2022 – and then, look for a focus on smaller, local events that raise the bar on experience and value for the most important attendees. As we come back to larger events (recognizing that the largest of mega events may never come back), experiences will need to be produced at a much higher level, and hybridized, eclipsing attendee value in ways we've never seen before. Events of all kinds will be more expensive, and less profitable. But in the end, events will be better, higher quality, more meaningful and purposeful. They will accomplish fundamentally different objectives that they have in the past. As for the 2.5 million event professionals and companies they support are concerned, some of us will hang on, some will evolve and adapt to a more digital existence, and some will move on to pursue our passions and other vocations. Whatever path we choose, we will be forever changed, but change is often a good thing.