Covid 19 Delta outbreak: Its dire: Events sector says some will not survive if lockdowns continue

The Government shed little light on when the ailing events sector will be back in business during its lockdown briefing this week. In the meantime, cancelled shows are resulting in millions of dollars in lost revenue. Jane Phare reports.

The multi-billion-dollar events, concerts and conventions industry will have to wait until next week to find out the plan for their survival. But those in the industry say they will not be able to wait much longer, describing their situation as “dire” not only for event organisers but a vast supply chain that relies on them. They include lighting technicians, security, caterers, stage builders, scores of businesses that support hundreds of conferences, trade shows, concerts and events each year.

While there was some relief in sight for retail, hospitality, library, pools, museums, zoos and schools at this week’s Government briefing about the country’s alert levels, there was no immediate answer for the events sector.

Instead Prime Minister Jacinda Ardern said plans for large-scale events would be outlined next week, giving the industry plenty of time to scale up. But with Auckland set to be moved slowly and cautiously through the initial three-phase plan before large-scale events will be considered, it’s unlikely many will be held this year.

Ardern hinted that vaccine certificates could be used as “a tool” in the near future to reduce the risk of the virus spreading particularly in crowded indoor settings.

“We will likely move to a framework that reflects a more vaccinated population.”

Plans to allow large-scale events to be held once the majority of the population is vaccinated can’t come soon enough for an industry that is on its knees. It has staggered on, saved only by a cluster of events some companies managed to squeeze in late last year and before the latest lockdown in August.

Promoter Alex Turnbull, owner and director of the three-day Rhythm and Alps music festival in Wanaka, has a string of concerts lined up and no idea if they’ll be able to go ahead. First off the block is Rhythm and Alps where he’s expecting a crowd of 25,000 on December 29. At the same time a similar number are expected at Rhythm and Vines in Gisborne, now run by different operators.

Turnbull has other rock concerts lined up in December, January and February in Matakana, Tauranga and Christchurch but doesn’t know what he needs to prepare for.

“We need some clarity around this, what level 1 might look like.”

He hears the Government is motivated to return to these summer events, he says. “But it doesn’t look like it today.”

Event professionals have been discussing how a vaccine passport might work.

“I know they’re working on that but there are some human rights issues involved with the legalities around that.”

The 18 to 28-year age group is Turnbull’s target market, a demographic that is among the lowest in terms of vaccination rates. Promoters are collaborating to put a campaign together to encourage vaccination.

Turnbull has already had to cancel Snowboxx, a week-long holiday package in Wanaka last month. If he’s forced to cancel Rhythm and Alps it will be a blow that could cause him to reconsider staging the event again.

“What it would mean is that people will get refunded and I will have to assess our future, what it might look like.”

“We’d love to run it again. It’s an iconic brand, it’s a rite of passage for these young people.”

Turnbull’s frustration is echoed elsewhere in the events industry. Raana Horan, owner of Coast Group, one of the biggest suppliers in the events industry, had to let 100 of his 300 staff go during last year’s lockdowns. Some of them had built up skills over years.

“We had a good business before Covid came along. Now, it’s just a funding game. I just keep borrowing more and more.”

Covid-19, he says, has cost him millions of dollars and he’s had to sell assets to stay afloat, something he’s never faced in nearly 30 years in the business.

“Our event sector company is just burning a hole in us. We want to keep our people and we’re funding our way through it because when the event sector starts we actually need all our people to do these events.”

“If we let too many go, we’ll lose our whole DNA to restart properly. We’ll have all the gear, we just won’t have the people who know how it all goes together and how it operates.”

Coast Group includes Carlton Party Hire, and companies that hire out marquees, carpets and furniture, build stages and install lighting and power, design shows and stands, and make signage. Horan is predicting a rush for available dates once the Government gives a clear direction about level 1.

But right now most of his equipment is in storage, part of a business that can’t operate. Horan, like others in the industry is frustrated at a lack of direction from the Government.

Events take months of planning to get up and running and without a firm indication of when the country will be back at level 1, struggling companies don’t know how long they need to hang on for.

“There’s no clear direction,” he says. “If there was a line in the sand that said ‘by this date we’re going to be at level 1’ then we can plan for that. How long can we afford to hold on to people?”

But Horan is not about to walk away.

“I’m not going anywhere. There are too many families and too many people relying on me.”

Lisa Hopkins, chief executive of Business Events Industry Aotearoa (BEIA), says with the borders shut the sector has lost about 78 per cent of its revenue. Pre-Covid the sector was worth around $1.5 billion a year. Between July 2020 and June 2021, the sector ran $337m worth of events during lockdown-free months.

“Realistically the sector can only operate in level 1.”

BEIA has a membership of more than 1200 across 300 organisations, including Air New Zealand, major hotel chains and convention centres, and suppliers like audiovisual companies, stylists, florists and caterers. All of them are struggling; for some it’s a battle for survival.

In a survey of nearly 1000 members of the New Zealand Events Association last month, 55 per cent said that Covid-19 had caused considerable financial impact on their business. Those willing to share financial details reported collective losses of $17.5m.

Hopkins and others in the industry want the Government to consider different classifications for different large-scale events. While the business and trade event sector acknowledges rock concerts and music festivals are equally as important, they don’t want to be lumped in with them.

They argue that a highly-controlled, pre-booked business event is Covid light years away from a mosh pit or free-for-all crowds at a music festival. Hopkins points out that two major events involving 2100 people at Spark Arena, where a barman tested positive for Covid-19, did not result in widespread outbreak clusters.

“That speaks a lot to how the organisers went about it. For example, the QR code was [printed] on the front of the menus. That level of detail meant the organisers could provide the Ministry of Health with contact tracing really quickly.”

Brent Spillane, managing director of XPO Exhibitions argues that the type of venue should also be taken into consideration in the classifications.

“If we’ve got 20,000 sq metres [of space], and vast, high ceilings and wide aisles and excellent airflow, that is a very different proposition from a business event in a community hall with very limited space.”

Hopkins says a survey of members shows there is strong support for vaccine passports if that’s what is required by the Government.

“They’re telling me ‘if this is what we need to do in order to keep going and being able to trade, and get our borders open, it’s what we need to do.’ There’s no push back.”

Lockdowns have to end, she says. “It can’t continue to be Fortress Auckland. Auckland is so important to our sector, so critical, and that’s why so many people have really been feeling the pain this time.”

September, October and November are the peak months for the business events industry and then a surge again in March.

“So that’s six months of no income.”

Vaccination is the key to freedom

Horan agrees that lockdowns should no longer be an option, saying vaccination is now the key to freedom. “Elimination is out. We can’t live our lives at home. People can’t afford it. We need to get our borders open and get everything going.”

Spillane says New Zealand is heading towards an environment where the vaccinated public will be welcomed and the unvaccinated will lead restricted lives, missing out on concerts or a vital business event.

“We’d really like some direction from the Government on that though, because I don’t think it’s the role of the events sector to be mandating criteria for entry.”

Where to get a vaccination in Auckland – without a booking

Spillane is nervously waiting to make a decision about cancelling the pre-Christmas NZ Gift Fair due to open on October 31 at the Auckland Showgrounds. And then there’s the Waikato Home & Garden Show, due to open on November 4. It’s likely he will need to cancel both after director general of health Ashley Bloomfield signalled this week that Aucklanders face another four to eight weeks of restrictions, and the Delta variant caused parts of the Waikato to go up to alert level 3.

Since Covid-19 arrived last year Spillane has been forced to cancel or postpone 18 events, including the Baby Show four times. The last cancellation cost his company $500,000. In all he’s lost “millions”.

“We’re in a dire position here, we won’t have revenue for a long time, we cannot operate in level 2.”

Spillane warns that there could be some operators and businesses that don’t survive and that talent across the industry will be lost as a result. He says it is critical for the $5 billion business and trade-show sector to be back in full swing by early next year.

XPO’s events alone bring 75,000 domestic visitors into Auckland each year, visitors who spend millions, stay in hotels, shop and eat out at restaurants.

“They charge the economic success of thousands of New Zealand’s SMEs.”

It is the 14 shows that XPO has managed to run between lockdowns since last November that have kept the company afloat. But Spillane is optimistic about the future once vaccination rates are up.

“I’m looking overseas at the moment at the reopening of trade shows and exhibitions globally and they are booming with incredible attendance across the UK, US andGermany,” he says.

“What’s giving us hope is that our forward bookings for 2022 and beyond are stronger than ever. So there’s certainly no lack of appetite from the industry to commit to us.”

He and Hopkins say they are encouraged by recent discussions with Government ministers, saying the engagement has “amplified” in recent weeks.

Hopkins says above all the industry wants the chance to get back to doing business.

“They know they can do it safely. They know they can do it well. We just need to be given the opportunity to do so.”

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