Following a sustained period of growth, the B2B live events sector has been heavily impacted by the Covid-19 crisis. Uncertainty over the course of the pandemic continues to cause significant disruption and financial pressure for operators.
We also analyse the longer-term fundamentals underpinning industry performance and how organisers’ strategies will likely evolve in response to the crisis.
How has the events industry been impacted by Covid-19 pandemic?
Most organisers have seen business heavily impacted by Covid-19. Whilst the industry is expected to return to growth, it is likely that the pandemic will have an enduring impact on the sector.
In the near term, although regulatory barriers to in-person events are expected to lift, ongoing health concerns and travel restrictions will impact profitability, adding to the cash pressures operators have already suffered due to mass cancellations. There have been some noteworthy capital raises in response. We anticipate most organisers of scale to be supported by shareholders and lenders. Yet it is inevitable that significant numbers of operators, particularly smaller independents and associations, will be
financially exposed by the crisis. This may, in turn, lead to a cycle of consolidation.
Consolidation is a longstanding feature of the sector, and B2B events M&A has been particularly buoyant since 2013. Increasing private equity activity and the availability of debt financing have contributed significantly to a steady rise in valuation multiples over this period. However, the crisis has seen sector public market valuations drop sharply, particularly in respect of those businesses with relatively high levels of debt.
How will the events sector recover from Covid-19?
Strong B2B events have a track record of relatively rapid recovery from previous disruptions, both operational and economic. The long-term fundamentals of the sector remain attractive. Foremost amongst these is the key position events enjoy in the B2B marketing mix, which is unlikely to be structurally impacted by COVID-19.
However, the crisis will likely accelerate change in elements of the events business model. In particular, organisers will seek to:
- ramp up their digital capabilities,
- expand their interaction with customers outside the event dateline, and
- prioritise the growth of non-face-to-face revenue streams.
Ultimately one product of the crisis may be more resilient business models that play a significant role in driving the next phase of industry growth.
In a joint report with Arrowpoint Advisory, we examine in depth the impact of COVID-19 on the live events industry and assess the reaction of operators and investors in the sector. Download the report for a view on:
- Operational Reaction
- Financial Markets Reaction
- Operational Outlook
- M&A Market Outlook