Following on from our virtual event addressing ‘How The Events World Is Responding To COVID-19 and The Industry’s Next Steps’, today we will be addressing ‘The Event Venue Conundrum. How To Be Fair To Clients And Employees’.
Bringing together their unique perspectives on the issue was our speakers; Jane Longhurst, CEO, MIA (Meetings Industry Association), Richard Groves, Group New Business Development Director, Smart Group and our moderator Jennifer Jenkins, Director at Worldspan.
You can watch the video below, or read on for our key takeaways of the session.
Table of Contents
Postpone, don't cancel
Jane informs us that there is a 100% cancellation or postponement rate across mia members, so in response, the MIA have set best practice guidelines for venues to follow, in order to encourage the #PostponeDon'tCancel movement. These guidelines include asking venues to offer a 12 month postponement policy, which Jane notes venues are sticking to where possible.
However, we're now seeing cancellations for Q3 and Q4 as event bookers don't have the confidence to leave their postponed events in place. Cancelling postponed events is an issue: we are actively playing a part in putting a venue, who desperately needs the cash flow, out of business.
Both Richard and Jane agree that it is imperative for event organisers to be working more closely with venues in order to keep them afloat - everyone needs to work together. Richard makes the point that there are two parties in every arrangement: the agent using the venue, and the venue themselves. Both sides need business to continue and to make the events happen, so to achieve this we need transparency between organisers, clients and venues. Richard also notes that terms and conditions are particularly important here so all parties are protected.
Kindness is key
Jane notes that within the venue community, there has been a mix in kindness of event organisers. Generally, people are asking constructive questions and being generous with their postponements, whereas others have been fairly aggressive in their approach to cancelling and demanding full refunds. This is, understandably, a frustrating time for event organisers, but equally it's disheartening for venues to receive cancellations. Jane reminds us that the industry is running highly in emotion, so we need to remember that when talking to people.
It can be tough for furloughed and non-furloughed workers to keep in good spirits when teams are split up. Richard notes that it is hard to keep people motivated when the whole team is working remotely, and this is something which can negatively impact mental health in the long run too.
He suggests that retaining structure is paramount, eg. daily video calls to start the morning, and also tells us that he has observed brilliant tactics used by companies to boost employee morale when people feel demoralised, such as evening virtual quizzes and other fun team activities.
During the session, several questions came in that we didn't have time to answer. So, after the event, we caught up with the speakers to get their answers to the questions you wanted to know - here they are!
How are venues dealing with clients who refuse to pay cancellations?
As venues are currently closed and can't accommodate events, this can lead to tricky conversations. Jane advises that it is important to take it case by case and review each scenario as it happens, so she advises readers to read the best practice guidelines and work together with the venues using those.
Many agencies are asking for commission up front. Should venues be flexible here?
Richard notes that commissions comprise the vast majority of an agencies income with event management fees taking up the rest, and that it has always been a business imperative in his working life to ensure that agency and venue commissions are paid promptly.
The caveat to this is that the end client has paid or at the very least signed off the final invoice as the commission is based on this confirmed sales figure. Pre-paid commissions have an element of risk; as the end client may not, through no fault of the venue or caterers, agree to pay the whole invoice. This is the only income that would then allow the commission to be paid.
One would have to be very cautious to pre-pay commissions and each event would have to be looked at on its own merits. Jane notes that paying commission upfront puts all of the risk with the venue, and this type of risk is unlikely to be something smaller venues and independents can or should offer.
How do you think this crisis will affect lead times when booking venues for events in the future?
There will be shorter timelines for some bookings, terms and conditions will be studied much more carefully, and cancellation/deposit terms questioned. Clients will want to avoid any charges if the event is cancelled and will attempt to negotiate out of deposit and cancellation criteria.
Venues, however, need the confidence that bookings will not be lost with no recompense. By asking for a deposit from the client, venues are able to lock in prime dates, which potentially will have multiple applications for hire, and at a minimum, cover the cost of a client pulling the event shortly before activation.
What can events organisers do to protect and support small businesses in the events space?
Pay deposits! Not hold venue dates for long periods of time and carry over the enquiry past an agreed period, allowing for other clients to potentially confirm prime dates. Pay final invoices promptly and circumvent any large corporation 60 – 90 day payment terms, reducing this to 14 - 30 days post event to support the cash flow of small businesses.
Jane believes the industry simply will not function without the small businesses, whether that is small independent venues, AV and production companies, caterers, florists, small independent booking agents, the list is endless and the message is simple, use them and pay them promptly.
Jane Longhurst, CEO, MIA
Jane Longhurst is Chief Executive of The Meetings Industry Association (MIA) – the voice that leads the largest association for the business meetings and events sector in the UK. Under her expert leadership, Jane has made it her mission over the last 15 years to create an association of great relevance to its members. She has succeeded in doing this through the delivery of AIM – a national industry accreditation scheme offering corporate buyers an assurance of compliance and quality when booking venues – and by creating a benefits and events programme for members that recognises the need for quality business-to-business opportunities.
Richard Groves, Group New Business Development Director, Smart Group
Richard started his own catering company, Richard Groves Catering & Events in 1987. 13 years later after building a large portfolio of venues and clients, he merged with two of his clients to form the Concerto Group. Richard joined the Smart Group in 2014, working across the Smart portfolio and particularly venue catering specialist Moving Venue and hospitality and outside event caterer - Smart Hospitality. Richard is a past President of ILEA, (formerly the International Special Event Society, ISES),and is a London & Partners Ambassador.
We hope you enjoyed reading the key points from the second session of our virtual event. You can also read the key takeaways from the first session here. We will be releasing a write-up on the other sessions soon, so keep your eyes peeled!
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