The events industry is recovering, but entrepreneurs face challenges

0
71

The events industry is recovering from the pandemic, but challenges lie ahead for entrepreneurs working in the industry.

For anyone with even a modicum of entrepreneurial spirit, the events industry has an unmistakable appeal. For starters, there is a low barrier to entry. If you book some DJs and a venue at 18 to help your friends celebrate their finals, you’ve put a toe in the events industry. And who knows, you might one day organize festivals or a global business conference.

But the events industry has suffered greatly from the pandemic. Here in the UK, around 126,000 jobs were lost in the sector in 2020. It is not surprising that event companies saw their revenues drop and according to figures from the Trade Association Meetings (MIA) a third of companies reported lost revenue between £1,000,000 and £500,000.

If that was bad news for established companies, it was potentially a disaster for startups working in the sector, but if there were casualties, there were survivors too.

Togather is a good example of this. The company, formerly trading as Fest It, has just rebranded and secured an additional $8.5 million in VC funding. When I spoke to founders Hugo Campbell and Digby Vollrath, I was eager to talk to them about the opportunities and challenges they see in a post-pandemic world.

Vollrath and Campbell have been friends since childhood. As Vollrath recalls. “My mother said she would give me a pound if I introduced myself to the boy who had moved in next door.”

Vollrath became a music blogger for the Guardian Newspaper, before moving into events. He worked in the US organizing music programs Britweek in Los Angeles and then joined Festicket as a Business Development Manager.

Campbell, meanwhile, began his professional life as a reporter and eventually as an editor at the Independent online newspaper.

Contents

A lack of innovation

The thinking behind Togather was a perceived lack of innovation in the event industry. “What I saw was a lot of innovation around ticket sales,” says Vollrath. “Very little innovation in event creation.”

Vollrath and Campbell in particular saw event organizers struggling to find suppliers. “Organizers had the problem of bringing multiple companies together to supply the events,” says Campbell.

As he explains, 99% of suppliers are independent – be they florists, photographers or caterers – and as such they are not necessarily on the radar screens of those organizing events. The obvious solution – and the one Vollrath and Campbell worked with – was the creation of a marketplace platform to provide the links. It started small when Campbell approached street traders in London directly and asked them to join the platform. Last year, the platform facilitated 120,000 events, large and small, with Nike and Amazon as notable clients. Growth was organic, largely driven by word of mouth.

Survive the pandemic

The impact of the pandemic was great. “We had £1 million worth of orders. “That went to £1 million in cancellations,” says Vollrath.

So how did the company survive? Well, Vollrath puts it simply. “We had good investors and we remained optimistic.”

It was a case of everyone involved keeping their collective nerves in check. The truth is that in 2020 no one knew when the vaccines would arrive or if the first wave of the virus would be followed by a second, third, fourth and fifth. But Fest It/ToGather had completed its funding round. “So we started developing our platform,” says Campbell.

Maybe it wasn’t so hard to stay optimistic. Even during the lockdowns, once life returned to something close to normal, the expectation was that the human desire to come together would soon return. More than that. There would have been a bounce caused by pent up demand. We all rushed to festivals, sporting events, and maybe even corporate events.

To some extent this has proved to be the case. “The events industry grew 11% year-over-year before the pandemic. Now it is 14%,” says Vollrath.

Industry challenges

But there are challenges. For starters, the market is multi-speed. “The fastest growth was in consumer experiences and life events, such as weddings. Festivals also returned. The business side of things has returned more slowly. Perhaps not surprising. Large companies were probably cautious when it came to endangering the health of customers and clients.

But there has been another challenge. Here in the UK, at least two factors have reduced the available workforce. These include the pandemic itself, but also Brexit, which has hit the hospitality sector in general hard in terms of available labor.

Isn’t there a danger that the rising demand from organizers will get stuck on the reef of a tight labor market? Vollrath and Campbell say they had to be proactive. “There are definitely shortages,” says Campbell. “We work with recruitment agencies to help our suppliers find the staff they need.”

Inflation is another factor that affects the market. Fewer employees means higher wages, which in turn results in higher costs. “We have had to help suppliers set their prices and also with staffing,” added Campbell.

So where to now? The $8.3 will be used to scale up the operation with the goal of becoming a go-to platform for enterprise companies. AI has now been deployed to match the right suppliers to the right events. Growth has resumed and this year the company expects to be involved in 200,000 events. They also plan to take the model outside of the UK.

You could probably argue that Togather was lucky, having secured funding before all the lockdowns. Other innovators may not have been so fortunate. Now growth has returned and Togather is among the companies experiencing an upswing. But challenges remain for a sector that nevertheless attracts many entrepreneurs. Dealing with the impact of inflation, rising wages and labor shortages remains a real and current issue for those in the industry.