Home Coronavirus Updates Are we heading for a supply crisis?

Are we heading for a supply crisis?

by EN

EN editor Saul Leese talks to suppliers across the exhibition industry to gauge if a supply crisis is looming.

An EN investigation has revealed that there could be potential supply problems in delivering the increased number of exhibitions now taking place in Q3/Q4, 2020. ESSA, director, Andrew Harrison, has issued a widely welcomed early warning, that unless the Government issues clarity over the ‘lockdown’, and financial support packages are extended to suppliers, businesses may not be here when they are needed most.

He said: “We need immediate recognition of the part events and exhibitions will play in reigniting the UK economy post the outbreak as they stimulate economic impact across hotels, airlines, restaurants and other business tourism  activities all over the UK. Seek explicit reference as being part of ‘Leisure, Hospitality and Tourism’ – to avoid ambiguity on inclusion in all current and future packages and measures.

“We need the Government to create a specific industry support package in line with other countries (including Australia, Denmark and Hong Kong) to protect the sector, ready to run events and stimulate markets.”

When asked if Harrison envisages a shortfall in suppliers or skilled workforces needed to deliver the increased number of exhibitions, he added: “In short yes. This is potentially compounded by any shortfall in any of the above measures and equally our sector’s ability to work together. Leadership, ingenuity, pragmatism, possitivity, togetherness and alliance are just some of the key features that exist in abundance in our sector and we must draw on it like never before. We will find a solution, we are solutions people, but it’s going to be the toughest eight months of all of our working lives.”

EN sat in on one of the many Zoom meetings held by ESSA with its members, and asked supplier businesses to give their view on the potential problem.

Steve Barrett, MD, Full Circle Events

“I do not foresee where there will be any, as to me if you move your trade from one fiscal quarter to another, and you have the infrastructure and the support of exhibitors and visitors, it should all be possible without any real issues. It will all be about the mind-set of everybody involved.

“From a contractor/supplier point of view this could be a car crash! Car crashes can be avoided but only with carful panning, with the right people being consulted and the necessary budget going to the right people at the right time, let’s face it without the build, where will the follow-on suppliers work?

“The contracting sector has been in decline for far too long. The companies have no meat on their financial bones, we have been servicing our cash flow from show to show on very low margins for far too long. There are now just to many agencies, companies and people all taking their living from the organisers pot.

“I think it is going to take its course and we can only run with it. Everybody is suffering from the large to the small, it has been a buyers’ market for the last 20 years. There is definitely going to be a shortage of stock as the third quarter was an issue in normal years. Are we expecting contractors to put large amounts of capital expenditure into their business for one quarter, I think not! This will be issue in every country in the world. Can the larger contracting company’s put large investments into stock and buy all the larger contracts (that they do not already have) for the next few years, not at present margins.”

Jason Stead, MD, GES

“Any industry problem won’t be supply driven as I believe demand will return gradually. It’ll be economically and socially informed – government action/rules/support and through the public feeling comfortable at mass gatherings again. We can deliver the demand however it returns using the approach of creative pragmatism. We actually have a brilliant opportunity to rewire how we deliver events as industry – let’s not waste it.

“The concept of the socially distanced show is at odds as to what we deliver – socially connected shows. The concept however does need building into everyone’s thinking. We can do this effectively but also with a degree of subtlety. Reinventing the show floor is something we should all look at – normally we run at pace – now we have a window to reset.

“GES is also considering how to use this window to accelerate our sustainability programs. Virtual events are still in their infancy and will be a useful tool to augment physical events and it will be interesting to see the take up, client response to them and how they develop over the longer term.”

Mark Jones, CEO, Giant iTab

“Pretty much all of our suppliers have agreed a 50 percent now and a 50 percent later plan. This gives us significant breathing space and enhanced short term cashflow while we undertake to secure a small business grant fund allowance (SBGF) as a business rates rebate. Sadly, it seems our industry sector is only eligible for the £10,000 Grant and not the larger figures up to £25,000 available for the retail, hospitality and leisure sectors who have a dedicated SIC code.

“One positive thing we can do is to share knowledge, ask questions and plan for the future. This could start with the sharing of different lists of events that are being rescheduled to give supply chain members the heads up of those events that are potentially going to happen so they can align themselves accordingly.

“It was suggested by Andrew Harrison that they will be collating and posting such a schedule on the ESSA members board. The scale and impact of that crisis is yet to be known but with due diligence and hard work, which the events industry is known for, most of us should be able to pull through and meet together on the other side at events across the UK, Europe and worldwide once the summer starts to come to a close.”

Miriam Sigler, director, Ways & Means Events

“Like many other suppliers we are playing the constant game of Tetris scenario planning both for ourselves and our clients. With the uncertainty of what lies ahead in terms of tenancies, stock levels and staffing. We all known that this industry will do whatever it takes to make it happen and everyone is raring to go as soon as we are let of the leash.

“However, one of the biggest issues I think the industry is going to face is the gap between the end of government support and the events/cash flow recommencing. Many suppliers have been burnt badly by not being paid out for events they did just prior to the shut down or events that were cancelled with little notice, but work had been done.

“This will have the knock on effect of staffing shortages as people look for other work, meaning we lose some of our best people, shorter lead times if contractors are not able to purchase supplies and build until they have had payment and with more events cramming into the shorter season there are some major safety concerns with build times, mental health and pressures to deliver with reduced budget.”

Tim Manton, MD, Interlink Design and Displays

“I have no doubt in my mind our industry is currently facing a crisis of epic proportions, more worryingly a crisis that no one knows how it’s going to pan out, as I see it we have a number of critical issues facing us at some point in time down the road. The fact are we’re dealing with a pandemic no one really knows when is going to end.

“Many venues we do our work in are currently designated as hospitals for this Pandemic. Postponed exhibitions in September and beyond in reality have no guarantees of ever happening, those exhibitions having client bases of exhibitors that are going to arrive in September and beyond with either no money or questioning the actual viability of whether it’s worth it on the basis of ‘are visitors really going to flock ‘en-masse’ to an exhibition venue, post Covid-19’.

“What will have then happened is the demise of many reputable Exhibition Contracting companies and suppliers that simply cannot sustain this prolonged period of limited to no work, we’ll then see is an upsurge of ‘one-man bands’ and Eastern European contractors.”

Ian Taylor, Acting MD, The NEC Group (Over 100 exhibitions for Q3/Q4, up 35% on 2019)

“We are focused on helping our industry return to normal levels of business activity as quickly as possible, once social and mass gathering restrictions are lifted.

“There is no doubt the events industry has stepped up to the plate and is supporting our brilliant NHS in the fight against Covid-19 and the NEC Group is proud to be part of this national effort. “At the same time, we are standing side by side with customers to ensure we all emerge from the current situation and play a leading role in helping kickstart the UK economy by hosting amazing live events.”

The group added: “The events industry is extremely resilient but there’s no doubt this pandemic has created an unprecedented challenge at every level of the supply chain. When event activity does return, our industry will have to quickly adapt to whatever the new normal looks like and ensure that events are able to be delivered safely and in line with whatever governments ask of us to ensure we beat this pandemic.

“That said, we’re confident we have strong service partner and contractor relationships in place that will enable us to continue supporting our customers in the delivery of amazing live events. The characteristics for which our industry is renowned – collaboration, flexibility and creativity – will be exactly what is required to successfully navigate this challenge.

“If the level of event activity returns in the way we all hope it will in the latter half of 2020 then there will undoubtedly be more pressure to deliver than ever before on suppliers, contractors and service providers. It’s likely to mean a creative approach to planning and delivery will pay dividends, whether that’s back to back venue tenancies or the sharing of services and equipment, but if there’s one thing our industry has consistently shown over the years, it’s that when the pressure is on, we step up and deliver for our customers.”

Simon Mills, executive director, Exhibitions at ExCeL London

“The Covid-19 pandemic is an unparalleled global crisis that is affecting everyone, in every industry, to an extent that none of us could have imagined. The speed at which this situation has developed is absolutely unprecedented. ExCeL, like countless other businesses, has had to adapt and react within record time to support both the national effort and our customers’ needs. Our teams have worked alongside the NHS, Military and contractors and helped to build the world’s largest temporary hospital, in just over nine days.

“Of course, we remain totally committed to supporting our customers and have managed a huge rescheduling programme, moving dozens of large-scale events. The ExCeL team is busy working behind the scenes to ensure that every event, and there are over 110, scheduled for the second half of the year, delivers; ensuring businesses can showcase their services, visitors can be inspired, and more memorable moments are created. We remain optimistic about the future but recognise that we will need to come together as an industry and work collectively to ensure we come back even stronger.”

Andrew Manby, MD, Joe Manby Limited

“What we do know for sure is the longer the current situation continues then the more difficult it will be for us all! Critically, we must have continued government support, both in the access to and effectiveness of the various loan schemes, the Job Retention Scheme and the plans currently in place to assist the self-employed. Any early withdrawal of funding, difficulty of access, or significant reductions in the current levels of government assistance, will be a major game changer!

“Assuming therefore that events are operational, and the Nightingale Hospitals have all been removed by the end of Q3, venues will be at the start of a busy autumn season with their previously contracted business. Again, assuming that all these events have survived in some format, what capacity will they have to accommodate rescheduled shows? The first question therefore concerns the availability of tenancy options.

“Whilst we have a few client events that have secured venue dates later in the year, it would seem that this has not been an easy process. One or two are still looking at this option, but by far the majority of our annual and biannual events have now simply cancelled this year’s show(s) and are focusing on how they best deliver in 2021.

“You’ll appreciate that we’ve no understanding of how other suppliers react in the same situation, nor do we have a full understanding of what the industry’s capacity is at any given time.

“Certainly, if we were to see large staff redundancies, the self-employed not returning to the industry or, even a few, key service suppliers cease trading as a consequence of a protracted layoff, it would have to raise some serious questions around our industry’s ability to support what we all hope will be a resurging market. That is why continued government support, which may in the end need to be specific to our sector, is so absolutely vital. It may also prove to be the greatest challenge! The potential skills shortage has been an issue way before we’d heard of coronavirus. Certainly, our current predicament focuses the mind and it may well exacerbate the situation.”

Dan Watkins, sales director, Dzine International Furniture Hire

“With rapidly declining furniture hire orders and concerns over staff safety we have temporarily closed our doors. Many of the exhibition and event supply chain haven’t been able to access any funding and have already gone under and many more won’t survive if this situation continues.

“We do feel very strongly that there should be extra consideration from the government to support our industry beyond many others as any large gatherings for conferences and exhibitions will be the last to resume any kind of normality. Also economic pressures on the end corporate clients will also have an impact on the timing of overall demand.

“I don’t feel that the  industry has had the recognition it deserves; we have been the first to experience the devastation and will be the last to recover. Either way, fast point-of-care testing is key short-term and will help unlock economies around the world until treatments and vaccines are validated and manufactured.

“Fortunately, Dzine is in a strong position. Before the virus hit, we had invested heavily in our infrastructure including new product lines, vehicles and our manufacturing facility. We are very used to peaks and troughs that this industry brings sometimes fluctuating by 300%, so we are feeling confident if demand increases rapidly that we can deliver quality furniture hire wherever it’s required. Many of our clients and large-scale events are poised and ready to place furniture orders as soon as they are able. We remain positive yet realistic that life as we know it won’t be the same again.”

Rob Brackstone, MD, ESM

“In our case we employ a strong permanent workforce of tradespeople who are currently furloughed in their entirety, with decades of experience in the high-quality design and manufacture of exhibition solutions. If furlough ends with no hope in sight of domestic events resuming, and whilst our major venues remain field hospitals, we will inevitably see the mass redundancies that furlough was intended to prevent with those skills perhaps being lost to the industry forever.

“Make no mistake, a failure to support the events industry is a failure to invest in the ‘bouncebackability’ of the UK economy. We all know it is not going to be business as usual in the world as we look to jump start the economy whilst coping with this new disease and the precautions it demands we take as a community.

“But, it is clear that at a time we will need UK business fighting for every advantage, scrapping to exploit every opportunity, and battling to re-build and grow, the likelihood is that without the full support of UK government at this difficult time, the skills of the UK event industry will not be there to service them at a time when accessing those services will be more important than ever to British business.”

Chris Stewart, director, Smart Display and Exhibitions Ltd

“We accept that there is going to be congestion and it will be a very testing exercise to deliver for both existing and rescheduled events, but in our opinion, looking  at the current landscape, it’s a good problem to have. The exhibition industry is adaptable, hardworking and resilient but that the moment we are also very exposed and feel very fragile.

“We’ve had news through this morning that the rescheduled IFAT show in Munich originally due to take place in May and then rescheduled to September has now been cancelled all together. Hopefully this isn’t the start of a new wave of cancellations as I feel a blanket abandoning of events over the Autumn period would be the final nail in the coffin for many in the industry.”

Liz Turner, director, The Event & Exhibition Partnership Ltd & The EEP Safety Team Ltd

“It is very hard to give an informed judgement as to whether we will or won’t be short of staff, there are so many IF’s at the moment. All we can do as a team and a company is to prepare to be ready.

“To do this we have kept in touch with our team, supported them, doing on-line training to keep their skills up to date, to motivate, kept communication going  and most of all getting funds to them to keep going. How long this will last is a question none of us can answer, so planning and communication to not only our team but the wider industry family is key so we can come back as one winning team. Planning will be key during the Autumn months as one Team.”

Nigel Targett, MD, Symbiosis

“Unfortunately, it’s going to be a summer of casualties in the sector that even the Chancellor won’t be able to save. Symbiosis are in a lucky position that we have reserves to see us through the medium term. The immediate extending of the Furlough towards the end of the summer would go a long  way to help everyone.

“Our loyal supplier network has crossover in case of shortfall pre-pandemic. I don’t envisage any problems with suppliers. Our Freelance crews are always paid on time by Symbiosis and with booking as far in advance as we can – we feel our freelancers will be ready to start back on the tools.

“Unemployment in the sector will be at an all-time high therefore freelance work will be the natural course for these people who only know exhibitions – maybe a small silver lining?”

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