Sarah Yeats (pictured left), MD at Sledge has overseen projects in countries including the US, UK, China and France of late, and shares some insights on addressing the causes behind declining budgets and rising attendee expectations. The rising cost of living has dominated global news headlines this year, and it’s impacting the event industry in myriad ways. However, just as no two countries are the same, the challenges – and even opportunities to embrace change – vary by location.
A look at the current state of play
There was a level of recovery felt across the majority of sectors in 2022, with company profits, headcounts, and marketing budgets mostly increasing. As a result, events were back with a bang. This year, on the other hand, we’ve been faced with rising inflation levels – in August 2023, the UK’s annual consumer price inflation was 6.7% and Germany’s 6.4%, while the Eurozone average was recorded at 5.2%, and in the US it was 2.5%. This has gone on to affect even the largest of brands. According to Statista, layoffs in the tech sector, for example, saw 167,400 employees lose their jobs in the first quarter of this year. However, tech brands are not alone. Companies across various industries are demonstrating caution, restructuring, and exploring ways to cut costs amid talks of a potential recession. For the global event industry this means clients’ budgets have mostly been reduced and, yet at the same time, they expect the same superior quality – all while we tackle rising production and operational costs.
Uniting as an industry in the UK
Conversations around increasing rate cards are never easy, particularly with a historical client, and following the pandemic, where many of us will have put a hold on revising these. As agencies, we’re faced with somewhat of a conundrum here. We need to make a profit to keep our own lights on, so passing event production and operational increases on in one way or the other is required. At the same time, we don’t want to lose out on work or damage partnerships, particularly when clients themselves don’t have the budget to manage these changes. Right now, it’s important for agencies to be bold and highlight how they add value. In my view, this also represents an opportunity for us to band together, and explore establishing UK industry-wide rates and standards, so that the work is evenly spread, and clients receive the highest level of service, wherever they go.
A distinctive mindset in China
China is an incredibly unique country, in that it’s ‘on’ 24 hours a day. You can make anything happen at speed – and there’s an expectation that you embrace the mindset that budgets and timelines are not a hindrance. A piece of furniture, set even, can be built overnight, and given that labour costs are much lower than in other parts of the world, price isn’t an issue. Generally, the production of bespoke items is approximately 30% cheaper in China when compared to the UK. This approach can be associated with its own set of challenges, however, from human and labour rights, to the environment, in terms of creating products from non-recyclable materials, or items that won’t be used again. We’ve also found there’s a client expectation that event production costs in China should be the same everywhere else, whereas in most instances, these are much higher. Factors impacting this include non-local material production, and differences in wage costs. 
The US’s unionised approach
Over 16 million US workers were represented by a union in 2022, and the event industry is very much union-led there. This makes event professionals one of the biggest budget contributors, as their wages – which can be double of those in the UK – roles, responsibilities, and hours are all heavily regulated. The role of a floor manager, for example, is considered to be very different to that of a stage manager, and the former isn’t permitted to go anywhere near the stage. The lead crew member will announce when it’s time to break for lunch, and as soon as contracted hours have been completed for the day, their rates increase. While this level of employee protection is important, in many ways, it means event budget increases are unavoidable.
Seasonality in mainland Europe
Europe has been known to shut down throughout August as many head offline for the month. At the same time, uncertainties around budgets means many of us have been working to shorter lead times and less defined timelines in the UK. Locking a site visit in or contacting a supplier on the ground in Europe was a no-go, though, which meant we were on the back foot heading into September. Some Europeans would argue that being all offline at the same time means you can switch off properly, ready to return revitalised in September.
Delivering despite budgetary changes
A positive that I’ve witnessed emerge from the rising cost of living is that clients’ cautiousness is prompting them to think more strategically than ever before. In my experience, clients throughout the globe are aiming to reduce their event budgets by 20%, and many now have smaller teams to deliver, so they’re reassessing the way they do things. This presents an opportunity for us event professionals to come onboard earlier on in the piece, provide insight that clients didn’t know they needed, and act as their true strategic partner from start to finish. By helping them understand what their audiences seek in experiences today, and providing alternative creative concepts and overarching solutions that are in line with their budgets, we have the ability to strengthen relationships, and ensure they continue to achieve their goals, even these during challenging and uncertain times.
