The Road Ahead: What’s In Store for the Event Industry In 2021 & Beyond – Part Two In-Person Events

Key Takeaways:

• Milestones like the return of leisure and business travel and full-capacity restaurant dining rooms will precede in-person events.
• Get ready for more scrutiny from the C-suite on the ROI of in-person events.
• Be prepared for unpredictable attendance, with more no-shows as people hesitate about returning.
• Mind your money with battles over escrow deposits to suppliers and more room to negotiate venue commissions.

To forecast the landscape for in-person events in 2021 is to indulge in paradox, perfectly encapsulated in the events of the last several days. As I write this, Johnson & Johnson requested emergency approval for its COVID vaccine, adding more heft to our steadily growing supply. Vaccine distribution is being ramped up aggressively, and case counts are steadily declining. The winter of our discontent, it would seem, is near an end, right? Not so fast.

Also recently, ON24’s stock price soared 45 percent after its IPO, valuing the virtual event platform at $3 billion, which is investors’ way of saying that virtual events aren’t going anywhere, anytime soon. And concern over the more contagious new variants of the virus is rising.

So where does that leave us? An uncertain path forward, to be sure. But there’s no point in agonizing over the virus and anything else we can’t control. What we can control, however, is how we choose to react to it. Below are some fact-driven insights that may help us manage expectations and find a way forward.

1. Embrace the Present, Plan for the Future, Stop Mourning the Past. This mentality was beautifully articulated in an article by Joy S. Davis, CAE, managing director of member products for the American Association of Pharmaceutical Scientists:

“Mourning our dead dreams of what might have been and wrapping them in the shroud of ‘normal’ is not going to get us anywhere. They were just dreams, you know. You have no idea what really would have happened in 2020 if there hadn’t been a pandemic.”

We need to operate in the world as it is, not as we would want it to be. Accept the changed landscape and lean into it, using it as a tailwind. Or prepare to be left behind. 

2. The Return of In-Person Events: Leading Indicators to Watch for. Most people are eager to know when in-person events will return, not just a few here and there, but with the vigor and regularity we’re used to. I personally don’t see that happening until Q4 of 2021 at the earliest, but the actual timing is less important than understanding what factors are likely to herald their return. Here, then, are some of the key factors we should be looking for, and they all have to do with people’s behavior as it relates to risk.

a. NOT Industry Surveys. These are useless. Most planners answering them have no idea, while most of the venues and other sell-side suppliers are way too optimistic, with little to base it on. Our industry is notoriously late to the party when it comes to forecasting economic activity. Just pull up any industry survey in the months before a major recession; it’s all rainbows and unicorns.

That’s in large part because it reflects economic data based on when events occur, not when they were booked. So if a convention hotel says they had a great June, that means they had a lot of events occur in June, all of which were likely booked months or years prior. If they were asked about new bookings in June compared to prior years, they’d likely give a much more accurate snapshot. On the other hand, if a survey asks people what’s going on now, reflecting behaviors like the ones below, then that is more useful.

b. Going Back to the Office. When we start seeing large portions of employees returning to their offices, that’s a good sign. 

Yes, some form of remote work and scheduling flexibility is here to stay, but companies encouraging staff to return to the office is a sign that the organization feels the risk has abated significantly and the employees feel more comfortable commuting and being out of their bubbles.

c. Restaurant Dining, Indoors, at Normal Capacity. When most people feel relaxed enough to eat at a restaurant surrounded by strangers, that’s an even better indicator of their comfort level. Unlike going back to an office, which may be required or preferred by one’s employer, eating out is usually a personal decision.

d. Leisure Travel. Leisure travel will return first, and when air and hotel numbers start going up in decent numbers, that’s a strong indicator. Here, again, this is a voluntary choice, marking a high comfort level with being around strangers.

e. Business Travel. This will take the longest to return in decent numbers, but bear in mind that travel required for work is not all uniform. Flying to present to a client in their office doesn’t mean someone is willing to mingle with hundreds of people at a conference or reception.

f. Mask Wearing. We might very well have a contingent of the population that will keep wearing masks long after the danger of COVID has receded. But when it’s no longer required in stores and other public places, or broadly accepted as standard protocol, that may be the ultimate indicator that all remaining barriers to in-person events have been removed.

g. Shifting Individual Risk Calculus. All of the above indicators reflect a change in our personal and organizational assessment of risk. Individually, we’ve spent the past year being shocked, scared and confused. We’ve been trained to be wary of each other, particularly of strangers and large crowds, to only trust those closest to us, and rightfully so. It will take some time for that trust of broader society to come back. 

But as more people are vaccinated and cases continue to drop, we’ll start perceiving less risk with being out in public, and by extension, at events.

h. Shifting Organizational Risk Calculus. For the companies, associations, individuals and other event hosts, the risk evaluation involves not just guest safety, but the danger of liability, not to mention bad PR. Particularly if the host doesn’t rely on the event for income, those concerns will weigh heavily until the health risks have significantly abated. It’s just not worth it otherwise.

3. Optimism Bias and ‘Stupid Proof.’ There have been, and will continue to be, a number of event organizers and venues crowing about how they produced safe in-person events. This is to be taken with a grain of salt. For one thing, how do they know? Just because no one got sick at your event—that you know about—doesn’t mean it didn’t happen. Since one-third of people with the virus are asymptomatic, they may spread it unknowingly to others at the event, who in turn won’t be diagnosed until much later. Further, just because some groups decide to move forward with an in-person event doesn’t mean it is safe or appropriate or worth the risk for everyone else. Outlier examples don’t prove or disprove a hypothesis.(In 2015 U.S. Senator James Inhofe of Oklahoma famously brought a snowball to the floor of Congress as “evidence” that global warming was a hoax.)

4. Unpredictability of Attendance.

If we embrace the fact that the virus will bring uncertainty to the in-person events landscape, then at least we can, and should, plan for it.

And uncertainty will certainly mean that people are likely to wait longer before registering, and often at the last minute, compared to before. In addition, event hosts should be prepared for a higher spate of no-shows than they’ve seen in the past. All of this will make managing venue guarantees more challenging. Let’s accept this and work with it.

5. Clients Will Have a Laser Focus on In-Person ROI. CEOs and other executive decision-makers have now seen how much can actually be accomplished in virtual and will be far more scrutinizing of in-person event spending. They’re getting much better data, reaching a broader audience, getting high-level speakers more easily and cheaply, and are realizing the impact of having so many people out of the office for several days traveling to and from events.

Planner perspectives are one thing; senior business leaders’ perspectives are often very different, and theirs are the ones that count. 

I’ve spoken to many CEOs of companies that held large in-person events as key drivers of their business, and when I ask them if they will resume in-person events once COVID peters out, their answers are usually “We’ll see,” not “OMG definitely!” 

One of the more telling examples is an article last fall by Jessica Lessin, founder and CEO of The Information, a leading tech industry media company, who wrote a widely shared article on LinkedIn titled, “Virtual Events and Why I Am Never Going Back.” I encourage you to read this if you want to see how a business owner is looking at the situation.

6. Just Because You Can, Doesn’t Mean You Should. Planners need to look at what the attendee experience will be with COVID-safe protocols in place and determine if the event still meets their objectives. If the room setup has seating socially distanced, does it diminish the impact of the presentation? If everyone is wearing masks, does that undermine efforts to facilitate networking and connection. Will the inevitable mask etiquette confrontations put a damper on an otherwise celebratory event? Not everyone is rigid about wearing masks, but the people who worry about it worry about it a lot! If you’re someone, or know someone, who gets anxious or goes ballistic when a shopper at the supermarket wears their mask like a chin strap, imagine the impact of those people at your event. Incidents like that have the same kind of impact as having security forcefully remove a belligerent guest: it’s a scene, for at least a little while.

7. Industry Consolidation. With demand for in-person event venues and vendors at historically low levels, expect supply to contract. Venues will close. Hotels will be converted to apartments. Many agencies and service providers, already operating at skeletal staffing levels, will either shutter or merge. If owners are smart, they already have been exploring this. Two struggling caterers, for example, who might have enough combined business to support one entity, but not two, can survive by joining forces and consolidating redundant roles.

With event demand low, demand for event labor also has dropped. Most of the very large agencies and event service providers I spoke to all said the same number when asked about furloughs and layoffs: 80 percent. Let that sink in for a moment: 80 percent! Even if we see major recovery this year, not all those jobs are coming back. And many that do will be on a part-time or contract basis as companies will seek to be more financially nimble. Which brings us to the unfortunate (or fortunate, depending on how things play out for them) reality that many people will leave the industry entirely. People who sold agency services or equipment rentals are now selling real estate and life insurance. This is part of the expansion/contraction cycle any industry goes through, only we haven’t seen it in a very long time.

8. Escrow Battles. Clients will be more reluctant to give large deposits far in advance due to the uncertainty dominating the landscape. Venues and suppliers, on the other hand, need cash to keep their businesses going. Expect to see clients insisting on putting deposits in escrow, with haggling back and forth over what conditions trigger the release of funds. 

9. ‘Reverse Hybrids.’  Traditional hybrid meetings started with an in-person event, with a broadcast element added for a remote audience. 

With the unpredictability of in-person events, the new hybrid format will be reversed: Start with the virtual event as the anchor, and add on in-person offshoots when and where it makes sense. This requires a mindset shift that is long overdue.

That mindset previously treated the remote audience as if they were in a spillover room at a venue when the main theater was full. “Let’s just stick a camera in the back of the room and stream the sessions,” was the approach, with little thought about the remote viewer’s experience. In most cases the lighting, audio, and projection, not to mention user engagement, were not optimized for the remote audience. Designing a truly effective hybrid event requires paying as much attention to the UX of the remote audience as planners do for the in-person one.

The best way to accomplish this is to assign someone the role of “Remote Audience Advocate” to represent the interest of the virtual viewers during the design process. This could include having exclusive content for the virtual audience when the in-person crowd is on a session break, such as interviews with presenters. Or having someone curate the chat feature during the presentation, something that’s more distracting when done in-person, and sharing that insight with the speaker, so she can use it to weave the two audiences together.  Now that we’ve all seen for ourselves the importance of a well-designed virtual event, everyone should be drinking this Kool-Aid. 

Further, the new hybrid event doesn’t have to have both audiences viewing the same content. The remote audience can have dedicated content from a speaker in a studio, rather than from the same stage as the on-site audience.

10. ‘Hygiene Theater’ Provides a False Sense of Security. Wiping down surfaces and ubiquitous hand-sanitizing stations will be properly recognized as a nice-to-have, rather than a need-to-have, feature in the prevention of COVID at venues. It certainly can’t hurt, but those steps have marginal impact, since COVID has been shown to spread predominantly by aerosol, not surfaces. 

Also, since one-third of virus carriers are asymptomatic, temperature checks will miss at least that portion of people screened. But the optics are nice. Marriott CEO Arne Sorenson acknowledged as much, saying “A temperature check is a very dubious tool for ID’ing those who have the virus; (it) is hygiene theater, if you will. It’s communicating to folks … that you’re now entering a place in which we’ve got protocols to protect you.”

11. The Rise of Ventilation Science. Since the virus is airborne, venue ventilation is extremely important. 

Event planners will need to become familiar with a property’s HVAC (heating, ventilation, and air conditioning) system and its specifications, like humidity levels, MERV filter types, how much outside air is introduced, and, most importantly, how quickly all the air in an event space is changed. 

The good news is that people will realize that airplane cabins are a lot safer than they might have previously thought. Airplanes change the air 12 to 15 times per hour, which is somewhere between the levels of a hospital emergency room (12) and an operating room (20).

12. Comms Are King. Communicating with attendees has always been critical. Now, in addition to being responsible for disseminating logistical information, planners need to have a health communications plan in place on how to notify participants of any COVID outbreaks during and after the event. They also need to know what specifically to say, threading the needle between being transparent and not causing panic.

13. Higher Commissions for Third Parties. Three years ago Marriott rocked the venue sourcing industry by announcing commission cuts from 10 percent to 7 percent, with Hilton, IHG, and others following suit. This was a calculated business decision that anyone who was really paying attention should have seen coming a mile away. Commissions are simply another sales and marketing expense for venues, and the only main one that is a percentage of revenue, meaning there’s no cap to it, so it stands out like a sore thumb on a profit and loss statement.

I’ve long argued that 10 percent as a fixed percentage doesn’t make sense. Instead, commissions should scale up or down based on how badly the venue needs the business. In a booming economy with surging demand on the planner side, venues didn’t need to pay 10 percent. My, how things have changed now, as demand has completely cratered, while the supply of hotel rooms and meeting space has not really changed. Third-party venue sourcing agents can, and should, seek higher commissions for in-person events right now. It’s not about exacting revenge for the earlier cuts; it’s just business.

On a side note, a big part of the frustration on the part of third-party agents is a misunderstanding of the client/vendor relationship in their transactions. Venue sourcers refer to the organization hosting the event as their “client” because that’s ostensibly who they’re providing site selection services for. But there’s a common saying in business that “if you’re not paying for it, you’re not the client; you’re the product (being sold to someone else).” So in reality, their “client” is the venue paying them. And the service those venues are paying for is not managing a site selection process; it’s bringing them a given piece of business. Under that context, it’s perfectly reasonable for hotels to want to raise or lower how much they’re willing to pay for that business. So third parties have two choices:

• Continue the current business model, but recognize that the venues are your clients, not the companies planning the meetings.
• To really make the meeting hosts your clients, say to them, “Our fee to manage the site selection process is X. Whatever I can get from the venue in the form of commission, I will apply toward X, but you’ll need to pay any difference.” The reason most third parties aren’t willing to have that conversation is because it requires them to put a hard number value to their services, which they’re afraid may be hard to justify.

If you missed Part One of The Road Ahead, read it now. Or see a full list of 25 rapid-fire predictions for the year by watching the on-demand recording of The State of The Events Industry 2021 webinar.