5 Challenges the Event Industry has to solve during the Corona Crisis
The corona crisis is hitting the event industry hard — once again through rising infection rates and according restrictions and measurement. No one can say for sure for how long the pandemic will continue to go on. Therefore, it is the right moment to think, plan and shape the future of the industry. Which challenges are we currently facing?
The economic situation in the event industry
A study by the Rifel institute that was published this June aimed to reveal the significance of the event sector for the entire German economy. It states that about 1.5 million jobs depend directly on this sector alone. The event industry generates about 130 billion euros which gives it the sixth rank in Germany and this number does not even account for suppliers and additional services. It is clear that the crisis in this sector alone creates massive damage to the economy — not only in Germany as the situation is similar in most countries that struggle with the pandemic.
Experts estimate that about 90% of all events in culture, music and sports were cancelled. The few events that did take place could only do so by reducing the audience drastically, introducing hygiene concepts and moving outdoors. Currently, with falling temperatures, such alternatives become less viable. Closures, lawsuits against closing times and the advent of alternative offers (selling vouchers, livestreams etc.) account for how enterprises struggle to cope with the corona crisis.
This even applies to places where the number of infections is low and where events can still be organized more or less in usual order. Because even in these places the reduced contingent hardly sell out. A big problem is that restrictions and conditions under which events are allowed to take place vary widely between different regions and they can change quickly. The already existing uncertainty is reinforced through this and becomes an additional problem for event organizers. This increases the economic damage even further.
Feeling of insecurity and planning uncertainty
It is unclear for how long the pandemic will last. Many entrepreneurs in the event industry hope and ask for help by their respective governments. Most have already used up their savings and taking (more) loans often makes no sense — as the margins in the sector are typically low. Thus, paying back credits would be hard or even impossible for many players in the industry.
Events can take place in some areas but the audience feels insecure. This results in the fact that many events do not even fill the already reduced quota. One reason for this is the inadequate possibility to communicate events, security measurements and hygiene standards.
In short order only governments will be able to help struggling enterprises in the event industry. Still, the crisis is the perfect opportunity for event companies to become independent of ticketing vendors and improve their own situations. We are dealing with the following challenges.
The current challenges in the event industry
1) Not enough traction for small event organizers
The digitization has confined itself to make tickets digitally available. To offer this service to small and local organizers is not profitable for ticketing vendors. But it is exactly small enterprises that do not reach the critical size to make use of a website, ticket shops and adjacent services. Thus, they are excluded from the digitazation and its advantages. But digital means are the ideal way to deal with the challenges of the current pandemic as they are contactless, fast and always available.
2) Imbalance between customer service and informational needs
The corona crisis has created an informational need which customer services cannot adequately deal with. Information does not only vary regionally but also at any other venue concerning hygiene standards, navigation, security measurements etc. Partly, the imposed conditions even change day by day. The centralized structure creates a fatal imbalance between informational need and the information service that can be carried out.
3) Small quotas of tickets and no shows
Small quotas mean that — for customers — tickets become scarce articles. They are more desired than before. Therefore, customers tend to reserve tickets. But from the perspective of the organizer small quotas mean that it becomes even more important to sell at least the entire quota.
Unfortunately, this state of affairs has resulted in unfortunate outcomes for event enterprises during the summer. Customers reserved tickets without knowing whether they will be able to attend or not. No shows are fatal for organizers in the corona crisis — especially when payment is only due at arrival. Most organizers do not have the possibility to resell tickets in short order — even when reserved tickets are cancelled in advance.
4) Black market for tickets
The third problem is connected to the problem of black markets. Much desired tickets are often targeted by third parties that buy tickets only for commercial reasons — to resell them for much higher prices. The extortion caused by this often undermines the organizers’ interest to keep prices affordable for all social groups.
5) Too small margins
The small margins in the event industry leave only few options to drive change in the event sector. Solutions, therefore, cannot be capital-intensive and have to show effect as quick as possible. Digital means are predestined for this, but in practice this is hard to implement.
Conclusion
The corona crisis is causing massive damage in the event industry. Although events could take place in a limited scope the feeling of insecurity was still prevalent. The challenges created by this revealed the current insufficiencies of ticketing vendors. The crisis is the best opportunity to reshape ticketing and to improve the situation for customers and organizers alike.
