Michelle Rodger: Humbug spirit is bad tidings for staff and firms

Published on Saturday 21 November 2009 14:16

IS IT too early to mention the "C" word? I hope not, it's just that as the Christmas lights get switched on across the country, I've noticed an alarming trend in businesses either cancelling or not even planning a staff or customer festive party this year.

The BBC led the way, but others are following suit and the Scrooge effect could mean the events industry taking a hit of between 350 million and 500m. With the Christmas party market worth around 1 billion a year, according to events company Concerto Group, the impact will be significant.

The wider implications are equally important. Even if you remove the Christmas party market from the equation, the recession has clearly had a major effect on the events sector; the changes over the last 12 months have seen a drop in business of up to 30 per cent.

But larger-scale live shows remain one of the biggest growth areas of marketing and the most effective in capturing and reaching out to the target audience. According to Eventia, research in recent years shows that events generate well in excess of 20bn for the economy, sustaining up to a million people in employment.

But even this area hasn't escaped the recession unscathed; Izania Downie, CEO of Eventia, highlights an increasingly complex and unfocused pitch process, tougher price negotiations and an expectation for agencies to deliver the same level of quality at a lower budget which is then pushed down the supply chain to the hotels, venues and other suppliers at the same time. The result, says Downie, is that many of her members have found the year tough, with business down by 30 per cent in some cases.

So what to do? How do events companies, small and large, survive the current economic challenges? And how can they convince firms that not spending on events can demoralise staff and create a negative public image?

Linsey Cox, award-winning owner of LpC Events, says just last week a charity event in Edinburgh was cancelled. Obviously this had an impact on the charity but also had a knock-on effect on the hard-working employees and valuable volunteers who are passionate about the charity.

Cox said the events sector needs to innovate in order to survive. In particular, to identify additional and creative ways to showcase clients' products and services from event concept to delivery. "Building strong relationships with key suppliers and better communication will be essential".

Events need to have an identifiable ROI (return on investment) to be justified, they need to be designed to meet real business targets and have a tangible positive effect on all those involved.

Entrepreneur and former army officer Richard Kellett believes it's time for a shake-up of some of the "tired" event products on offer and says there is a great opportunity for forward-thinking event companies who can offer truly innovative solutions while maintaining quality and value for money.

Kellett, founder of Radical Events, has deconstructed everything about his company's portfolio and says he has put it back together with "heart, soul and flair to create something which has a wholesome and revolutionary feel to it". Developed from military roots, Kellett's events can be tough, intense and emotional and push participants far out of their comfort zone, but it's this radical approach to events that he believes will be the way forward.

Kellett predicts a number of casualties among events organisations over the next year, but anticipates an increase in fundraising challenge events for charities that are looking to generate revenue to compensate for the loss of corporate giving.

EventScotland also anticipates new opportunities next year, and corporate affairs manager Leon Thompson believes the "bounce effect" from the year-long Homecoming initiative will boost the sector.

Thompson says there was a tremendous response to Homecoming and there is now a real appetite for events and festivals across the country. "We have a great track record in putting on events which are highly regarded throughout the world, and we need to ensure we can keep achieving that high level of event in Scotland."

Holding an event gives companies and brands the opportunity to engage directly with employees and consumers so they experience the best of your branding capability at first hand. An event can be motivational, says LpC's Cox. It can repay clients and staff for loyalty, can nurture and cement good business relationships and provide opportunities to make new contacts. Just as importantly, it can also be a lot of fun.

A final thought: the government allows you to claim the cost of your staff Christmas party against your tax bill, with an allowance of up to 150 per person. Surely it's better to use the money to motivate your team than to let the taxman have it?