The Big Event: Will the event rentals industry sink or swim?
By Tara JacobsFeatures Business Intelligence Party and event canada Canadian Rental Service events rental Tara Jacobs
A look at how the event industry is being forced to navigate their business through COVID’s choppy waters.
“All storms eventually run out of rain. Until they do, how are we expected to survive this flood?” – This quote was taken from Michael Wood, co-founder and managing partner of Ottawa Special Events. After lobbying for support, Wood was invited to testify in June before the Finance Committee on a virtual House of Commons sitting. A voice representing small business owners, particularly those in the event rental space.
In speaking with industry peers, the gaps he identified in both federal and provincial support came as no surprise. As many jurisdictions are now functioning in a phase that represents as close to “normal” as one can expect during a pandemic, the Canadian events industry feels that government has failed to deliver any type of meaningful support.
To date, the events, conference and tradeshow business has either been grouped in with incomparable industries, or not mentioned at all when it comes to government support. Yet those who work in event rentals know this industry is experiencing a unique set of detrimental consequences as a result of COVID-19.
There are no events. There is no revenue coming in. Yet, overhead costs and rent continue to come due for event rental operators. According to Heidi Welker, chair of Meetings Mean Business Canada, the events industry contributes $33 billion in direct spending, $19 billion in GDP and directly employs over 229,000 people in Canada. That’s no small change. So, how did this industry fall through the political cracks?
Unlike other small business owners who can pivot to reopen their storefront or go back to providing reduced services, events are either happening…or they’re not. With many provinces limiting indoor gatherings to 50 people or less, it’s easy to say they’re not. It feels a bit unfair to include event rental owners, when their return to “normal” is based on people’s subjective confidence in their perceived safety at large, indoor gatherings.
Event rental owners are already having to dig deep, some into savings, to keep their business afloat. To better understand what financial support is available, I dove in to the federal government’s website, to see how easy it would be to find information. I quickly found an option to customize my ‘story’ so the information provided best suited my business. My first roadblock was choosing an industry. Events, conferences and tradeshows were glaringly missing. The closest fit was “arts, athletics, entertainment and recreation.” After identifying my region and staff size, I clicked to see my results. I was redirected to a webpage that included a link to the Canada Emergency Response Benefit and to the Canada Emergency Commercial Rent Assistance program. That’s it.
You’ve likely already had to lay off staff, having seen business come to an abrupt stop in March. CERB did provide immediate relief to help cover personal expenses, but that program has a 24-week shelf-life. What happens to the employees who reach the end of CERB and there’s still no events to work at? What does the business owner do, when they can’t apply for unemployment insurance? How do these business owners continue to provide for their families?
The CECRA program is interesting in theory. However, because participation is not mandatory, it has failed to offer any real help to tenants. With many event rental owners renting (not owning) warehouse space, many are wondering how they’re going to pay tens of thousands of dollars in monthly rent, when there is zero revenue coming in.
To that, the government may suggest financial support of $40,000, with $10,000 of that forgivable. As Wood’s testimony questions, “what timeframe did you intend for the $40,000 to cover? One month? Six months?” While very small operators might be able to make this stretch, larger rental companies could see their rent and overhead eat through this in one or two months. Then, you’re back where you started, in greater debt, and still no revenue to pay this, or any future expenses.
Michael Wood’s testimony has started the conversation, but the industry must continue to lobby for support, calling on the government of Canada and provinces for urgent attention to the event space.
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