It has been interesting to read the recently published C&IT magazine’s comprehensive annual ‘State of the Industry Report 2015’ which in addition to the big headline stats, general trends and challenges includes commentary on developing and recruiting the best people, procurement, technology, event formats and a sustainability update.
You do however have to be careful given that the report is based on in depth interviews relating to 2014 business activity and the outlook for 2015. Given that the report is published towards the end of Q3 of 2015 it is somewhat historic however there is some very good pointers to future trends and learning to be extracted from the report.
The wonderful thing about the ‘events’ industry is its diversity. The report’s authors Conference and Incentive Travel (C&IT) maaazine kind of neatly sums up that diversity with agencies focussed on conferences being quite different to those with a focus on incentive travel based business.
And therefore when you read through the state of the industry report it’s necessary to understand what the core business is of the agency offering up the commentary. For example an agency that provides venue and accommodation booking and management services to its clients can very easily report a contract win of Â£2m+ which looks and sounds impressive but that work is traditionally high on cost and low on margin to deliver successfully.
Page 6 of the report sets out the top 50 agencies ranked by turnover in 2014. It is often said that ‘Turnover is vanity and Profit is sanity’ so after scanning the list to see whoâ€™s in the top 5 and whose new to the list I always move to the pre-tax profit line and the percentage as a proportion of turnover. The current report reveals that there is a span of less than 1% to 24% although 7 out of the top 10 do not disclose their pre-tax profit figures. There are also a few agencies with very high staff numbers and very low profit margins indicating either that they are one of those in the high volume low margin businesses, 2014 was a year of exceptional costs or their business model is very fragile. Those agencies with circa double digit profits and modest staff numbers appear to be more sustainable. So if I were a corporate buyer I’d be looking at not just whoâ€™s in the top 50 but how hard they appear to sweat their assets.
The top 5 event management agency challenges are cited as, talent and recruitment, procurement, lead times, pitching and managing growth whilst maintaining profitability.
The top 5 corporate event management challenges are budgets, resources, increasing delegates and revenues, innovation and return on investment (ROI).
So what of the future? With the concerns around UK General Election now behind us and an improving economy event management companies active in the events sector have a degree of security and time and resources to invest in growth and developing the business. Event planners are predicting a rise in employee engagement events and the use of new technology to improve the content of events and help it live on after the event.