Even when navigating through uncharted territories, decisions still need to be made based on assumptions. At the start of the pandemic, the key assumption was that we would go back to normal in a couple of months and we based our plans on that. Then the facts changed, and we had to change our minds about our assumptions – a cycle we went through a couple of times over the last two years.
In most of the cases, we did not have any control on the changing environment: decisions impacting our industry were taken by local or national authorities, based on the advice of medical experts. And while in many cases, the relationship between the event industry and these authorities has improved because of the crisis and has resulted into a better understanding of the importance of the event industry, the very nature of the pandemic made things quite unpredictable.
Time for a reset
Personally, I think the start of 2022 is a good opportunity to do a reset. One way of doing so, is to take a step back and ask three questions: what has changed, what has not changed and what remains uncertain and to do so both for the revenue and the cost side.
Looking at the revenue side, a lot has changed for convention centres worldwide and there might be an impact on certain elements of the cost side. First, there has been a clear change in the competitive landscape because of the accelerated shift towards digital. As a result, convention centres need to decide whether they want to step into this space or not, in which capacity – from one-stop shop to platform agnostic enabler – and with which pricing mechanism. Second, organizers are demanding far more flexibility, which impacts the predictability of cashflow. Here, convention venues need to decide on their approach vis-à-vis this demand – lenient, strict, or perhaps “shared risk”. Third is sustainability. Here, the question for convention centres is not whether they want to become sustainable, as sustainability will become the next minimum service level to attract investors and organizers. Therefore, the question is not a “why” but a “how”.
At the same time, three things did not change: first, there is still a profound, human need to connect face-to-face. Over the last months, I had the pleasure of attending several conferences and events – not only event industry ones – and the levels of positivity, energy and engagement were staggering. Second, convention centres remain – by far – the best place of doing so in a safe and secure way. And third: for many associations and corporates, face-to-face meetings remain crucial for achieving their mission. “Beating cancer” (European Society for Radiation Oncology) can not be achieved via Zoom. The same goes for “Inspire and develop the builders of tomorrow” (LEGO). To achieve these missions, people need to connect, interact, and inspire in real life.
What is uncertain
What remains uncertain however is how confident people will be to attend organized events – if allowed of course. This uncertainty can only be offset by the combination of purpose, experience, and impact. To put it clearly: I will happily enjoy a lecture from the comfort of my couch, no need to get up. But if by making the effort to attend the event in person, I will be able to share my ideas, learn from others and improve going forward it becomes a very different story. And that is exactly what I have seen over the last months when attending events: organizers have clearly understood that they need to accentuate and deliver upon these elements when reaching out to their communities.
All of this of course has an impact on the cost side. Putting in place a digital offering – either on a standalone basis or in partnership – means a shift of resources. Allowing for more flexibility will impact cash flow or at least the predictability of that cash flow. Becoming sustainable will also require investment and management attention, even if there is no doubt about the positive business case at the end.
In addition, there are some macro-economic factors which will also impact convention centres. The labor market is tight, not only when it comes to IT – finding a good data-analyst might be a challenge – but also ambulant labor is short. Second, financial resources have been cheap over the last years, but increasing interest rates will change this situation. Third, costs are increasing in ways not seen over the last ten years.
Therefore, convention centres will need to think carefully when planning changes, most probably giving priority to those changes which offer more flexibility at a reasonable cost. Planning as such, however, is simply inevitable.
AIPC represents a global network of over 190 leading centres in 64 countries with the active involvement of more than 1000 management-level professionals worldwide. www.aipc.org