Impact of Covid-19 on the events sector

Ourea Events founder Shane Ohly was recently interviewed by ITV Border news about businesses that have been severely impacted by the COVID-19 pandemic but have received minimal support from the government. In this update we will share excerpts from that interview and explore the challenges faced by the event sector in more detail. 

We would like to start this new story by emphasising that we recognise the serious public health emergency caused by the global coronavirus pandemic. As a business we support the various restrictions required to protect essential services like the NHS. The safety of our event team, participants and our host communities is always our first priority, and we will continue to follow the latest good practice guidance and will only re-start our events when is safe to do so.

Introduction

Event organisers have been largely excluded from the various support packages provided by the government and this is especially acute in England. Yet events of all types are the core of a £70 billion industry sector which employs 700,000 people across the UK, and in terms of visitor spend represents over 50% of all tourism spend. This is a sizable contribution to the UK economy. 

Most event organisers are micro businesses and sole traders. The big headline event organisers like the Glastonbury Festival are unusual for their size, but we all have one thing in common: we have all been effectively closed for a year and counting.

Like all event organisers, Ourea Events has a whole ecosystem of freelancers and a supply chain of local businesses that support each event. The economic impacts of our events are measured in millions of pounds in the local rural economy across the UK, including the Lake District where we are based.

Skyline Scotland® 2019 - bringing significant income to rural economies in Scotland ©No Limits Photography

Skyline Scotland® 2019 - bringing significant income to rural economies in Scotland ©No Limits Photography

WHY EVENTS HAVE BEEN SO BADLY IMPACTED 

The majority of events happen between May and September each year, and the income generated during this period pays the bills over the winter months. There were virtually no events in 2020, and therefore the last time many event organisers earned any significant income was September 2019. 

This is also true for Ourea Events with our last significant events taking place during this period. We were able to organise the last edition of Marmot Dark Mountains™ in January 2020, but this event represented just 1.5% of annual turnover, i.e., in 2020 our turnover reduced by 98.5%. We have been unable to organise any further events - effectively closed - since Marmot Dark Mountains™ in January 2020.

WHY THERE ARE SPECIAL CONSIDERATIONS FOR EVENT BUSINESS

Well-organised events require long lead times, and in our case the logistically complex events we organise rely on a well-developed 12-month production schedule. We are not like a shop or restaurant that can open and close relatively quickly and furlough employees to minimise costs whilst closed. We cannot easily defer the dates for an outdoor mountain running event from the summer to November… clearly, that is not feasible! So, if this critical May-September period in 2021 is missed it will equate to two and a half years without any income for many event organisers. 

The very nature of events is to set up operations on a temporary basis, in a temporary location, thereby making the current schemes relating to rateable value premises and numbers of employees irrelevant to much of the event industry. As an example, Ourea Events has a small rural office with a low rateable value and whilst we employee 9 permanent members of staff (a combination of part-time and full-time), we might surge our personnel to 150+ at a large event mixing volunteers, freelancers and contractors to help deliver an event. 

The Dragon's Back Race® 2019 - our events are complex and require event teams of 150+ ©No Limits Photography

The Dragon's Back Race® 2019 - our events are complex and require event teams of 150+ ©No Limits Photography

GRANT SUPPORT 

Due to the low rateable value of our property and the exclusion of event businesses from the majority of government grants, Ourea Events has therefore had very limited access to the government’s support schemes. The government in England has been lamentable in recognising the importance of the event sector. In comparison, the devolved governments in Scotland and Wales have at least acknowledged the importance of the event sector, the severe financial pressure event businesses are under, and subsequently created specific funding packages to support them. 

In contrast, as an example in England the government has stated that lap dancing venues are specifically eligible for 'Local Restriction Support Grants', yet event businesses have been excluded because we do not provide our services directly from our premises. 

During this current early-2021 lockdown, the government’s latest 'Business Support Package' includes a 'Closed Businesses Lockdown Payment' and 'LRSG (Closed) Addendum' that adds insult to injury by providing further support of up to £13,500 for sexual entertainment venues, while again excluding event businesses from applying.

The government will say that event businesses are eligible for the discretionary 'Additional Restrictions Grant' and we did receive a modest discretionary ARG grant from South Lakeland District Council last year, which I am grateful for, but it sadly only covered one day’s operating costs. 

CAN’T YOU JUST FURLOUGH YOUR STAFF?

Whilst there is a UK government furlough scheme to pay part of our staff salaries, this is of limited use to many event businesses organising complex and/or large events because of the long lead times as noted above. For example, if we had simply furloughed our staff throughout 2020, it would not now be possible to consider putting on our 2021 events at all. 

Every time we cancel or postpone an event, we create a large amount of customer services, administrative, and finance work and need to re-start our consultations with the event stakeholders and landowners to negotiate about the new event dates.

Unlike a pub or hospitality business, that can close the doors and furlough their staff - notwithstanding some waste and spoilage - when we cancel an event and reschedule, we create a mountain of new work for ourselves, and we simply cannot furlough staff during these periods. 

The Cape Wrath Ultra® 2018 - an 8 day journey through remote Scotland requires extensive planning work and preparation ©Steve Ashworth

The Cape Wrath Ultra® 2018 - an 8 day journey through remote Scotland requires extensive planning work and preparation ©Steve Ashworth

FAILURE AT A GOVERNMENT LEVEL

At the highest levels of Government, particularly in England, there seems to have been a failure to appreciate the importance of the event industry within the national economy. Our experience of Rishi Sunak promising to “support viable jobs” is very disappointing. 

Likewise, in Scotland, Sport Scotland has issued guidance that events with more than 200 participants, spectators and staff will continue to be banned as we move back to tier restrictions. This guidance is widely believed to be regulation by local authorities and landowners and is directly impacting perfectly viable events being planned for later in 2021 and 2022.

An organisation like Sport Scotland, could take a much more positive and supportive leadership position, by acknowledging that we will get back to participating in sporting events as restrictions allow, and encourage local authorities and landowners to engage with forward thinking event organisers that are planning for the future when restrictions will be relaxed or cancelled. 

OUTLOOK

The 'Business Visits & Events Partnership' recently shared some research indicating that 76% of all event businesses only have cash left until the end of February. It is critical that there is government action to provide specific measures for the event industry.

Like many businesses, Ourea Events has run at a significant loss during 2020, which has been funded from our cash reserves. Whilst we would like to assure our customers that we are at present well-equipped to continue delivering our much-loved events, it is clear that the events industry cannot continue indefinitely like this.

Thank you for reading. We’d be delighted if you want to get in touch to share your thoughts.

The SILVA Great Lakeland 3Day™ 2019 - we look forward to bringing you this much-loved Lake District based event again in the near future! ©Steve Ashworth

The SILVA Great Lakeland 3Day™ 2019 - we look forward to bringing you this much-loved Lake District based event again in the near future! ©Steve Ashworth

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