The Pandemic’s Impact on Event Venues

Most businesses have felt the economic disaster of the Covid-19 pandemic. Yet, few will be hit as hard as the event industry. Events were the first to close and will be the last to open. Social gathering is the fabric of the event industry and until we are able to meet in-person, there will not really be an event industry.  What will the event industry look like when we reopen and when can we reopen?

These are the burning questions event planners and producers are asking. Will we have to wait until a vaccine is discovered? Can we congregate safely until then? I wish there were answers. Event producers are in this unique position of having a relatively long lead-time to bring their product to market, for example, our team is already working on plans for our six festivals for the Summer of 2021. Yet, it is difficult to execute those plans when there is uncertainty about them coming to fruition. More so, allocating money to make these plans creates pause knowing that all might be for naught if we still cannot socially gather by then.

Inherently, some events will successfully return given their nature. That is, events such as large outdoor events that have a wide demographic appeal, certain outdoor festivals, State Fairs, County Fairs and legacy outdoor music festivals. It’s hard to imagine a world without Coachella, or Bonaroo. Other large events like the Texas or Minnesota State Fair too, are better insulated to the long-term effects of Covid 19.

To make matters worse, the venues that host many of our events are in even more dire straits. Consider the smaller, privately owned clubs and event spaces in America. Rent, mortgages, utilities, insurance and maintenance expenses all continue to accrue, despite zero revenue. The National Independent Venue Association (NIVA) reports that 90% of their members will go out of business if the shutdown lasts 6 months or longer. Unlike publicly-owned venues, they do not have access to tax dollars to support them while they are dark. When they are allowed to re-open, they will be in a far worse position and will have to attempt to catch-up.

Privately-held venues are economically fragile to begin with and often live hand-to-mouth. Yet, they are at the core of the event ecosystem. Their success directly impacts not just their existence, but event producers, audio-visual contractors, neighborhood food & beverage establishments, independent contractors and gig-economy workers. There is a lot of interdependence in the event community. Businesses rely on each other to function and in some cases only exist to service another community member.

Large publicly-owned venues are not in much better shape. Consider the public arena/convention center, these venues are not typically self-sustaining financially and require some form of subsidy, usually receiving some portion of a local sales tax. In many instances they receive a portion of what is known as “tourism taxes.” These tax dollars are derived from hotel/motel lodging taxes, car rental fees and food and beverage taxes. Like other venues, they have mostly shuttered during the pandemic. Furloughing staff, cancelling or postponing events and essentially are dark. Yet, like other venues, bond payments (the money used to build them) utility bills, insurance and maintenance still must be paid. As tourism has sharply declined, so too have the tax revenues they generate which keep our public venues operating. In turn, municipalities are reprioritizing how tax dollars are spent. Allocating their revenues to essential services as they suffer significant revenue loss as well.

So, like the privately-owned venues, large public venues are feeling the pain from the pandemic, which in turn effects event producers and the businesses that support them. The big difference is that publicly-owned venues will not be allowed to fail. Given their size and the fact they are publicly owned, these venues will continue to exist in some form.

There is a complex interdependence between all of the players in the event industry. We can’t exist without each other. We depend on each other’s success to be successful. It’s difficult to fathom losing some of our colleagues and friends, but as the lockdown continues, more and more businesses in the event community are nearing the point of no return.  Currently, there is proposed legislation in Congress, in the form of the SAVE OUR STAGE Act and the RESTART Act. Please consider supporting this legislation to keep private venues in business.