Events industry has lost $100m with threat of many businesses disappearing

Tuesday, 7 April 2020

XPO puts on trade shows that can attract more than 30,000 people, such as the Baby Show,.

Events companies are worried they won't have solvent businesses by the time restrictions on mass gatherings ease up.

Last month the Government placed a ban on mass gatherings for the foreseeable future under its coronavirus Covid-19 alert system, which killed the events trade overnight.

Making matters worse gatherings of over 500 people will still not be allowed at the lowest of the four alert levels, so the sector faced not just weeks, but months of uncertainty, one operator said.

Total Sport managing director Aaron Carter said he could see a time after the lockdown lifted when there would be a high demand for its outdoor sporting events, but he wasn't sure if the company would be in business when that happened.

* Food producers and suppliers are switching to home delivery to survive

Brent Spillane is managing director of event company XPO, which has had to lay off 14 people as a result of the lockdown.

* Construction sector calls for its own coronavirus alert levels to keep sector afloat**

He had not yet laid off staff, who he said he could pay until the end of June thanks to the government wage subsidy, but the staff of 12 were all on reduced working hours.

Total Sport normally hosted 20 events a year that attracted up to 1100 people each but the company was trading down 98 per cent year on year in March.

'We went into fight or flight survival mode starting about March 16 when we cancelled the biggest event of the year … I've been calling anyone I can where I've seen an opportunity to get some financial respite,' Carter said.

He had negotiated rent reductions, reduced insurance premiums and had halted all unnecessary outgoings to stay afloat.

Prime Minister Jacinda Ardern and director-general of health Ashley Bloomfield provide an update about New Zealand coronavirus cases on Tuesday, April 7, 2020.

XPO, a company that organises trade shows that attract between 5000 and 35,000 people had recently bought a consumer events company, which had doubled the size of the business, but also the overheads.

'It's been an extraordinary time for us now having to unpick this and pivot and resize our business overnight. This week we've had to lay off 14 staff, a significant amount of our workforce, ' managing director Brent Spillane said.

The workload that would enable staff to return was not there for the short, medium and potentially long-term, he said.

With 25 remaining staff working four day weeks, Spillane said he was working through strategies with venues on how events could be run under the different alert levels, but there was only so much fuel in the tank, he said.

The industry had cancelled or postponed nearly 9000 events, with the potential for another 5000 to follow in the next six months, a recent survey by the New Zealand Events Association showed.

Total Sport, which puts on outdoor sporting events, employs 14 staff that are all now working reduced hours, says managing director Aaron Carter.

The level 4 lockdown had resulted in unemployment and brankruptcy for some firms, and lost profits of about $100 million across the sector.

The numbers would only worsen if the lockdown period was extended, association general manager Segolene de Fontenay said.

National Fieldays Society chief executive Peter Nation says its Mystery Creek Events Centre has zero income and faces postponing its events for the first time in 51 years.

The financial support package provided by the Government was a start but would not be sufficient to save the industry, which contributed roughly half a billion dollars to the economy a year.

The industry was asking for a 12-week extension to the wage subsidy scheme and immediate financial relief for overheads, including rent freezes on commercial properties and tax relief, de Fontenay said.

'We have grave concerns that, without this, many event-related businesses will disappear over the coming weeks and months,' she said.

National Fieldays Society chief executive Peter Nation said that after gatherings of over 500 were banned, its Mystery Creek Events Centre went to zero income and faced postponing its events for the first time in 51 years.

The society, which hosts agricultural events every June, contributed more than $500m in sales revenue to firms and generated more than 2000 jobs every year.

'Fieldays is about as representative of the events eco-system as you can get. It takes nearly every available marquee in New Zealand across its 1500-plus exhibitors, which are supported by event designers, audiovisual suppliers, lighting and power companies … none of which can be held in the future without those within the broader events ecosystem surviving,' he said.