Impact of the Coronavirus Pandemic in the Event Sector

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Impact of the Coronavirus Pandemic in the Event Sector

A global Outlook of the Covid-19 Pandemic

Since the outbreak of the coronavirus late last year in Wuhan China, the global economy has been affected, disrupting varying sectors. As per the latest statistics, according to John Hopkins University, total Covid-19 cases now stand at 3,117,204 with 217,193 deaths, and 928,970 recoveries globally (John Hopkins University, 2020).  Some of the primary most affected industries were the airline and the tourism and hospitality industry. As the pandemic continued to spread to different countries, the airline industry saw a drop in passenger bookings. Many states have shifted their focus to cargo transport of essential products necessary for control of infections among their territories. With a direct relationship with the airline sector, the tourism and hospitality segment has seen low bookings for hotels, resulting in laying off millions of workers globally. As the number of cases continues to rise, the situation does not get any better as business worldwide has closed down with fear of infections and fear of death to millions of people. However, governments are working tirelessly to come up with a vaccine that would see the global economy get back to their feet. Moreover, countries are creating economic stimulus programs to assist recovery of crucial sectors of the economy that have been profoundly affected by the pandemic, such as the airline, manufacturing, and the small and medium segment that employs millions of people globally.   As countries move to ease measures on lockdown, the global economy will see a slow recovery in 2020. 

Coronavirus Effects on the Event Industry

            One key sector that has been affected by the Covid-19 crisis is the event industry that constitutes planning of festivals, conventions, seminars, exhibitions, fairs, sports, among others. Event planners are counting millions of losses as an event planner in the earlier part of the year has been canceled with no returns for fixed and logistical costs incurred earlier before the outbreak. Besides, sponsors for events have withdrawn their sponsorship packages to avoid further losses in their accounts. As governments instill measures of social distancing, the culture and entertainment industry, which forms part of the event sector, has seen a huge decline in numbers as people cannot go out on the weekends. The event industry is composed of small entrepreneur companies, freelancers who have lost their daily income due to government lockdown and stay at home orders. Besides, the event industry is much related to the transport and hospitality sectors; hence a drop in the number of travels globally also impacts the postponement and cancellation of events. As a result of the coronavirus crisis, the event industry has, therefore, lost millions of incomes due to the drop in several travels, postponement, and cancellation of events. 

Cancellation and Postponement of Major Global Events

In understanding the economic effects on the coronavirus crisis, the world has seen major global events cancellation, including the 2020 Tokyo Olympics and the Dubai 2020 Expo. As a major global sporting event that brings nations together to showcase their athlete talents, the 2020 Olympics cancellation has had a big impact on Japan's economy. The Japanese government has been under pressure to cancel the international event with fears of infections to millions of people who travel to watch the high-profile sports event. With the government has invested heavily in the construction of the 2020 Olympic stadium and investment in hotels, there is a slow down in tourism revenue since the coronavirus outbreak (Etienne, 2020). According to Japanese times, with a slow drop in the tourism sector, it is estimated that the Japanese economy gross domestic product will contract at 0.7 percent and even more at 1.5% if the event were canceled. The effect would see the country losing 240 million Japanese Yens as part of its planning and projected revenues in 2020 (Etienne, 2020). Another major global event that has suffered from the Covid-19 crisis is the Dubai expo that has been postponed to 2021. The event that brings together a total of 192 nations in the United Arab Emirates was expected over 25 million visits to the Arab nation (Aarti, 2020). As part of mitigation measures to reduce the spread of the pandemic, the Ministry of Health in the UAE, so it worthily to postpone the event until a later date when it is safer for event participants. Other major events that have been canceled including the regular sporting events such as the Major League Soccer in the United States, the English Premier League, the Champions League, Formula 1, the 2020 Wimbledon, the National Basketball Association among others (Kate, 2020). As a result of these cancellations and postponement, business and governments have lost million of income due to loss of jobs, booking fees, and tax collections.

 How the Balance has Shifted in the Events Industry

As a result of the Covid-19 pandemic, there has been a paradigm shift in the event industry. To reduce the financial crisis in the industry, event planners are becoming more innovative to ensure that their audience is up to date with the daily events from their homes. One important aspect of the event industry is communication, as it keeps consumers informed of any changes happening around an event. The latter is essential for customer retention and loyalty in attendance of future events. As cancellations and postponements become the new norm in the industry, event planners have to keep a balance on the health and safety of their staff, sponsors, and attendees to avoid infections. On the other hand, small and big companies must maintain a balance on their financial obligations to minimize losses and caused by the pandemic disruption. In efforts to minimize disruption of their work, event planners can consider some of the following measures to ensure that their business keeps running. Since the event industry cannot guarantee the health and safety of its employees, the best option is to cancel the events and avoid any further logistics costs. For example, the Mobile World Congress and ITB travel events have been canceled as a result of the pandemic (Congrex Team, 2020). However, the event planner must ensure to maintain high standards and connections with sponsors, suppliers, and ensure that refunds, insurance claims, and contract fulfillments are met. Second, several organizers such as the Tokyo Olympics have moved their events next summer and fall as they wait to see progress on pandemic controls. The postponement requires anonymous approval by the sponsors, managers, and suppliers to the event (Congrex Team, 2020). Hence as part of mitigating financial loss, event planners must consistently provide adequate information to event stakeholders to avoid inconvenience to all parties.

The third option that event planners have resulted in including relocation to relocation to more secure locations that have fewer infection rates. However, due to the time and logistics involved in planning, there are limited options on travel arrangements, accommodations, and booking of the venue. The fourth and fifth option includes organizing virtual and hybrid events as governments encourage people to stay home to avoid the spread of the deadly virus. In the past few months since the beginning of the year, major events that require a small number of people have been converted into virtual meetings and conferences. In these challenging times, people can meet virtually through technological innovations such as the use of WebEx and zoom. Through this model, attendees avoid the risk of infection, cut travel costs, and also provide a stream of income to event planners. The hybrid model includes a mixture of live and virtual components. In this model, host planners can be on a physical location through ensuring social distancing, and the large audience attends remotely from the comfort of their homes. Hybrid events are beneficial as they are attracting sponsors who still need a share of the total income (Congrex Team, 2020). Therefore, though the event industry has faced disruption in several dynamics, people have adapted to modern means of virtual meetings, which keeps innovative event planning companies in the business. 

Recovery Plans after the Covid-19 Pandemic

With changing economic times, the collaboration of the event industry with the government and private sector will be crucial to recovery after the coronavirus outbreak. According to a survey conducted by the C&IT magazine, the collaboration of associations, agencies, corporates, hotels, and suppliers after the pandemic will be vital in finding out a recovery plan in bringing back events to normality. Since many businesses have suffered drawdowns in their financial positions, governments have created economic stimulus packages to assist companies to keep running during the pandemic period. With many event planners avoiding paying insurance premiums due to predictability position of the industry, the pandemic has taught a big lesson to the industry, and it is more likely that enterprises in this sector will be more encouraged to cover their businesses in case of a future pandemic (Andrew, 2020). Also, the epidemic has been a big lesson to event planners that virtual and hybrid events can be held virtually without physical attendance. As a cutting cost strategy to event sponsors, event organizers also become more innovative and effective from offering virtual meetings. Hence, future infrastructure should focus on building cloud technologies that facilitate people meeting virtually, building more connections in the business environment (Andrew, 2020). Governments have a significant role to play in the event industry. The cancellation of major global events such as the 2020 Tokyo Olympics that consume enormous resources means that the Japanese government will be forced to suffer losses and also offer cheap loans and grants for the tourism sector to survive after the pandemic. There should be grants and loans for workers and freelancers in the event industry who have been rendered jobless following the pandemic. The private sector, through financial institutions and private equity investors, will also play a part in the recovery of small or large event organizers since they will require adequate funding to cover fixed and marketing expenses after the pandemic (Andrew, 2020). Overall, the global economy is on the brink of a recession, and it will take cohesive business relationships and partnerships to bring life in the event industry, which forms a significant segment of developing social connections globally.