The Road Ahead: What’s In Store for the Events Industry In 2021 & Beyond – Part One
Intro
In late March of 2020, I wrote an article giving my take on how the events industry would look in the coming 12-18 months. While some readers felt it overly pessimistic, most agreed it reflected the hard and painful realities we needed to face, which have by-and-large, turned out to be true.
At the time there was a vocal, but shrinking, chorus of wildly optimistic industry cheerleaders who continued to insist things were fine, despite the growing drumbeat of doom coming our way – in some ways, reminiscent of Kevin Bacon’s character in “Animal House” urging the crowd to “Remain calm! All is well!” as the homecoming parade descends into chaos.
A less frothy, but still sanguine, contingent predicted things would return to normal in the summer, and when that looked unrealistic, pointed to a surge in the fall, perhaps driven by “revenge attendance.”
Unfortunately, the only thing that surged this fall was the number of COVID cases, more than doubling the previous high in June.
Plenty of companies and individuals have suddenly discovered that their value proposition wasn’t all that, well, valuable. The roaring economy and a strong sellers’ market, which provided a nice safety net for mediocrity, is now gone.
I bring this up not to discount those who wore rose-colored glasses in the face of a tsunami. To be sure, some were shamelessly pushing profit over safety, but many are by nature optimistic and simply sought to dispel what they viewed as panic. Instead, I point this out because we must maintain a sober and realistic assessment of where we are and where we are headed, driven by an ever-changing set of ‘facts on the ground.”
The events industry landscape has undergone a seismic shift in 2020, and not all of it is bad. Ten years of disruption have been compressed into nine months.
Many events we previously thought were successful have been found to be in desperate need of innovation. And plenty of companies and individuals have suddenly discovered that their value proposition wasn’t all that, well, valuable. The roaring economy and a strong sellers’ market, which provided a nice safety net for mediocrity, is now gone.
In the end, the shakeout wrought by the first major industry contraction in over a decade will yield unexpected benefits: a new ecosystem of smarter, better-skilled and more nimble professionals laser-focused on producing events with strong ROI, and a dynamic and engaging user experience across virtual, hybrid and in-person platforms.
This article, and the ones that will follow, will provide insights on many inflection points likely to occur in 2021 and beyond.
The Vaccine Cometh
Any prognostications or insights on the state of the event industry for 2021 has to start with an updated assessment of COVID. On this front, there’s good news and bad news relative to where we were last spring.
The (Really!) Good News
The fact that we’ve had not one, but two, bona fide vaccines ready for approval by late November is nothing short of astonishing — shattering all previous records. Furthermore, their clinical trials have proven incredibly effective. As of this writing, Pfizer and Moderna are reporting 95% efficacy. That’s a big deal, because the FDA only required a 50% effective rate for approval, so we very well could have been facing vaccines with significantly lower numbers. Akiko Iwasaki, an immunologist at Yale University, summed it up well when she said, “This is what an A+ report card looks like for a vaccine.”
The Wet Blanket – Managing Expectations
That’s the good news. But it’s not the whole picture. For almost a year, we’ve been conditioned to look at the vaccine’s arrival as the coming of the Messiah, here to save the world. And indeed it will, eventually. Every poll of attendee sentiment for going to a major event has an option of “When a vaccine arrives.” What no one in the events industry has talked about is when and how. And here’s where we risk expectations running ahead of reality.
Only when COVID cases start to fall dramatically will the vaccine’s effects be significantly felt.
Why? Because distributing the vaccine will take time, with estimates that the full U.S. population won’t be vaccinated until the summer.
But – and this is the key — it’s only when COVID cases start to fall dramatically that the vaccine’s effects will be significantly felt, in terms of people returning to activities previously shunned, like eating out in restaurants, traveling, going to stores and gathering in small groups. And only once that starts happening in decent numbers will full confidence return to attend large events.
Potential Wrinkles
For the vaccine’s impact to be significant, a critical mass of people need to take it. This could be delayed by the following:
- Both Pfizer and Moderna vaccines require two doses spaced several weeks apart, so getting everyone to follow up and get their second doses will not be universal.
- Plenty of people will refuse to get vaccinated. In November, a Pew Research Center poll showed 39% of Americans said they “definitely or probably won’t” take the vaccine. However, that number is likely to decrease as more information comes out. [Sadly, this cuts across party lines, with 69% of Democrats saying they’d get vaccinated, compared to 50% of Republicans, most likely due to where they get their news from.] While some vaccine hesitation is straight-up wackadoo lunacy, like the conspiracy theory Bill Gates will use the vaccine to implant microchips into people, some degree of skepticism is expected, given the CDC and WHO flip-flopping their positions on masks and how the disease is spread during the early months of the virus.
- Expect to see some mild hysteria around coincidental deaths wrongly linked to the vaccine. When such a massive number of people are vaccinated, a chunk of them will die in close proximity to taking the vaccine, but due to unrelated causes. These will, and should be, debunked. But they will present further delays in vaccine adoption among a certain portion of the population.
- If it’s been a challenge getting people to wear masks properly, just wait until those people are vaccinated, when they have even less incentive to wear them. Seeing more people unmasked is likely to spur a new wave of caution among the un-vaccinated and a potential new spike in cases as mask-wearing becomes less common.
Returning to Normal By . . . 2023?
That’s the million-dollar question everyone wants answered: when will things get back to normal? And when people say “normal,” what they usually mean is pre-pandemic.
It’s important to note that getting rid of COVID is not the same as restoring our industry to pre-pandemic economic activity levels. Remember, 2019 wasn’t just a year with no virus; it was also a booming economy, capping a record ten straight years of economic expansion. And that’s not coming back any time soon. Make no mistake; we will be in a recovery. But it will be a slow and steady one, particularly for business travel and the in-person side of the events industry.
Getting rid of COVID will not restore us to pre-pandemic levels of economic activity. Remember, 2019 wasn’t just a year with no virus; it was also a booming economy, capping a record ten straight years of economic expansion. And that’s not coming back any time soon.
How long? The consensus seems to be 2023. Marriott CEO Arne Sorenson has said business won’t return to 2019 levels for three years. Goldman Sachs projected airline traffic won’t reach pre-pandemic numbers until 2023, and that’s ALL travel. Business travel usually recovers much slower than leisure travel, and event business travel returns even later. According to McKinsey & Company’s in-depth article, For Corporate Travel, A Long Recovery Ahead, “Business travel for major industry events will most likely be the last to return.”
I hate to keep sounding like the prince of darkness – I’m actually an optimist by nature – but this seems to be our reality. Things will get better, and more importantly, we’ll all feel better about our prospects because we’ll be heading back up.
But it’s important to have reasonable expectations in planning and forecasting. And besides the vaccine and economic recovery, any such planning must consider the tectonic shifts our industry is seeing in virtual, hybrid, and in-person events.
