Governments around the globe are focused on easing coronavirus restrictions, in a bid to restart the meetings and conventions sector.
The MICE business is a vital provider of revenue, not just for hotels and conference centres, but for whole towns and cities. As such, the sector is pressuring official bodies to ease restrictions, as soon as the covid-19 transmission threat looks to be subsiding.
At stake is not just the revival of shuttered event spaces. The longer lockdowns continue, so grow fears that virtual events will gather acceptance, and become a new habit. Should the enforced use of Zoom and other virtual event platforms become widely accepted, there are those in the meetings and events space who have expressed fears for the revival of face-to-face meetings.
Social distancing has been differentially applied across the globe. The two-metre rule is at the longer end of a mix of social distancing decisions made by different governments. While the UK, US, Spain, Italy and Switzerland authorities opted for the longer measure, governments in Germany, Poland, the Netherlands and Belgium opted for a 1.5m distance. And Austria, Norway, Sweden and Finland have operated on the basis that a one metre distance has been appropriate scientific advice – and is the minimum recommended by the World Health Organisation.
While social distancing rules remain in place, industry groups are warning that many venues will simply not be able to function profitably, nor even break even. In the UK, the Meetings Industry Association recently shared findings from a poll of members, with government representatives on the Visitor Economy Working Group at the Department for Digital, Culture, Media & Sport.
Assuming continuation of a policy of requiring two metres of social distancing, 72% of MIA members polled forecast a reduction of 60% or more in revenues. It found 38% would break even, if the restriction was reduced to one metre, while 35% reckoned they would only break even once restrictions were dropped completely. One respondent noted that a 160-capacity room was reduced to 48 capacity, with the two metre distancing in place.
Already in mid-June, some UK hotels have been staging events, even with a two-metre distancing restriction. Amaris Hospitality reported on social media that its Bristol Mercure Grand had hosted three conferences in the third week of the month. The report would suggest there is underlying demand for events, even if delegates need to be spread two metres apart in conference room spaces.
In New Zealand, which has been at the forefront of containing coronavirus, the meetings and events industry was fully opened-up on 10 June, with events of any scale permitted.
“Getting to this level has taken less time than we originally envisaged back in March, and we are now the envy of the world,” said Lisa Hopkins, chief executive of Conferences & Events New Zealand.
“Our message is it is safe to hold a conference, seminar, workshop, incentive travel event and gala dinner under already-developed and enhanced track, tracing, health and hygiene standards. We will also be working with the broader events sector to develop a voluntary code, to support New Zealand’s efforts in the key area of public health.”
The country started easing restrictions in the second week of May, allowing gatherings of up to 100 people. At that point, events needed to be ticketed, to allow for contact tracing, and seated, with a one metre social distancing policy. Ahead of the easing, the sector had lobbied government, stressing key differences between a business event and a mass gathering of the general public.
“Business events are the highest-yielding component of the visitor economy,” said Hopkins. “At the start of 2020, New Zealand was on the cusp of enormous business tourism growth with the opening of new conference venues, four and five-star hotels, national infrastructure, expanded airlines routes and new attractions. Instead, for many, there has been no business or revenue.” The group has had to reschedule its own promotional event in Auckland from June to December. New Zealand’s business events industry is reckoned to be worth AUD500m a year.
HA Perspective [by Chris Bown]: Now the UK government has reduced its social distancing rule, many in the meetings and conference sector will be feeling just a little more hopeful. The example of New Zealand shows how the sector can be opened-up progressively, while still responding to wider concerns.
With the opportunity to preregister attendees, events businesses can argue they would be in a better position to undertake contact tracing, should that be necessary. And, while it is another expense, venues could also take a look at using other technologies such as thermal imaging cameras, now being deployed in a number of workplaces to provide an early warning over individuals with an elevated temperature, as they enter premises.
Additional comment [by Andrew Sangster]: The Meetings Industry Association reckons that there are 700,000 jobs connected to the meetings market in the UK. The Business Visits & Events Partnership estimates the UK events industry is worth GBP70bn.
Both organisations were feeling let down by the UK Government when it failed to specify when events will be allowed to take place this week during its announcement about the reopening of much of the rest of the economy. The BVEP described it as “shameful”.
In full disclosure, I do have a dog in this fight. Two-thirds of the turnover of my business comes from events and a slightly smaller proportion of profits. It has taken radical adaptation to stay afloat.
This year it has been about hanging on to business already booked. Next year, generating new business is going to be spectacularly tough.
While it is unlikely there will be many events in 2020 in Europe or the Americas, the subdued re-opening in Asia Pacific is the route forward. Smaller, more focused meetings and heavily restricted trade shows will be the “new normal”.
Events are vital to generate leads and facilitate deal flow in the real estate community. But, perhaps for several years, the mega events with thousands of people in attendance will not be possible.
This is going to devastate the owners of big event properties, both hotels and exhibition centres. And many of the companies that fill those buildings will go out of business. This will make the recovery slower and more difficult.
But there will be a recovery. My own view is that it will take several years rather than months before business returns to previous highs. At Hotel Analyst we are evolving various hybrid concepts – both online and physical. We won’t be making much money but we will be creating a more robust and meaningful offer for our customers.