Since writing our top five challenges for luxury event planners feature back in January, everything has changed! Just a couple of months ago, managing budgets was the biggest challenge facing the sector, with safety and security coming in at fifth.
But the coronavirus pandemic, which has spread quickly around the globe, is now by far the biggest challenge facing the industry, so we have updated the article from our inVOYAGE Annual Report to reflect that…
At the start of the new decade, no-one could have predicted the unprecedented situation that the luxury events industry now finds itself. Countries across the world are closing their borders and implementing severe travel restrictions, airlines are cancelling flights, and many governments are banning events and gatherings of any kind, with some even closing hotels.
This has resulted in the majority of events during the latter half of March, April, May and into June being postponed or cancelled. Richard Bridge, CEO of Top Banana, says: “There is no doubt that Coronavirus is having a huge impact on the events industry for clients, agencies and of course the supply chain. We are keeping abreast of the situation and advising our clients accordingly, most of our events that have been affected have been postponed not cancelled. Embracing technology is one of the key things that can help the industry to continue to communicate and engage with its audiences.”
Event professionals remain hopeful that business will pick up again once the crisis passes. GRAND HOTEL et de MILAN General Manager Andrea Piantanida believes that operations in China will slowly be resumed in May, given the country is around 70 days ahead of the rest of the world. “Our focus is on the local market only from July onwards. All countries should start to work on their local markets as at the end of the lockdown people will be ready to travel. I feel that European Market will start to move by September/October.”
Budget vs expectations
While luxury event budgets largely remained stable in 2019, clients continue to expect more bang for their buck year on year. So, it’s no surprise that budgets, and specifically balancing budget against rising expectations and costs, was named a top challenge by 28% of our survey respondents.
“Budgets aren’t increasing year on year, but costs are, so it becomes more of a challenge to deliver on objectives,” says BI Worldwide designer director, events Katrina Rannard. “Travel is so accessible now and with the growth of social media, everything’s got to be Instagrammable, which adds to the pressure to take it up another level. But the budgets are not increasing to take it up to that next level. We are lucky we have clients that we have worked with for many years so we can work closely with them to set expectations and achieve their objectives within budget.”
Unrealistic expectations as to what can be achieved within budget is also having a knock-on impact on supplier relations says Angélique Eriksen, founder & CEO at Egg Events, which has offices in Paris, Geneva, Brussels, Dubai and New York.
“It’s putting increasing pressure on our relationships with suppliers. We try to work in partnership with all of our clients and hotel groups, but sometimes what our clients ask us to negotiate is embarrassing and it’s not fair. Sometimes they ask a little too much especially in destinations like Thailand or Vietnam, where they imagine things being very cheap.”
Finding new and unique experiences and destinations
Creativity and finding new emerging destinations or unique experiences, was also named a top challenge by many event planners. “I don’t feel a budget challenge, I feel more of a content challenge – to always go the extra mile,” says Jan De Ridder, founder of Belgium-based agency The Boosting Group. “Luxury is so much more than just expensive hotels and foods. It’s about finding something totally unique, otherwise people could just book it themselves.”
Charlotte Gentry, founder & CEO at UK-based Pure Events agrees. “Clients are demanding increasing innovation for the destinations they are choosing to go to. That’s where you have to be incredibly different. There is an increasing push to be experiential and creative,” she comments. “I think for us in terms of a business that is our biggest challenge – continuing to inject creativity into what we do and marry up to the clients’ expectations of what they want from a creative perspective.”
Some agencies are finding that airlift is impacting their ability to pitch new and exciting destinations to clients, while others are struggling with unique activities for larger incentive groups. Heidi Baillie-David, team lead product development, senior buyer at Creative Group Inc (formerly Meridican Incentive), says: “Flights really impact where our clients will go. Canadian clients only tend to want direct flights, and automatically rule out destinations that require connecting flights, so we are quite limited on choice.”
Lack of creativity from DMCs
Closely linked to the above challenge – another issue for agencies is a lack of creativity from DMCs, especially as clients increasingly demand more local and authentic experiences.
Karin Wolniczak, managing director at German agency nice:-) Events says: “DMCs are just rolling out the same activities they have been doing for years. Our clients don’t want another walking tour, they want something new and unique. I’ve actually had several situations where I am the one who has come up with a new idea myself, and asked the DMC to help deliver it, then they go on and sell that idea to other clients afterwards.”
Brussels-based VO Communication’s client services director Denis de Wagheneire agrees: “I can totally relate to that. DMCs don’t think out of the box, even when we challenge them. I am actually working with a local event agency in Ibiza instead of a DMC as their approach is more creative. I don’t mind paying for a conceptual approach, I just want a programme that matches our client’s values.”
But Hugo Slimbrouck, director of strategic partnerships at Ovation Global DMC, argues that agencies are not playing open book with DMCs. “Agencies should be much more open. Most of the RFPs that come through are really basic and not very detailed. If we can clearly understand why the client wants to do the event, we can use our local knowledge to enhance their key message and what they want to achieve,” he says.
Climate change and sustainability
While sustainability is a top trend in the events industry and viewed by many event agencies as an opportunity to differentiate themselves, it was also named a key challenge for a variety of reasons.
With climate change constantly in the press, justifying long haul flights for events and incentives is getting harder for corporates, with several agencies concerned about the potential impact of flight-shaming. There’s also the impact climate change is arguably already having in some parts of the world, from increased cyclones and flooding in tropical destinations to the recent wildfires in Australia, that are making it more difficult to know where and when to travel.
While carbon offsetting is one way of reducing the negative impact that events and travel have on the environment, it also costs more and at a time when budgets are already tight, making the right decision for the planet isn’t always easy or viable. Peter Jackson, director at UK agency red e2, says: “The impact of offsetting on budgets, and therefore margins, is a huge challenge.”
Agencies say they are also struggling to find green certified hotels for clients in certain markets, particularly emerging destinations. VO Communications’ de Wagheneire explains: “It can be difficult to find sustainable partners – DMCs and hotels. In Northern Europe, especially Scandinavia, they are already quite far ahead with sustainability, but the further south you go, the harder it gets to find sustainable partners.”