The pent-up demand which has been sustaining the meetings and events sector may be starting to wane, but Peter Heath, managing director, Venue Performance is confident that clear heads will make for sustainable businesses.
For July we are seeing the market is slowing down and prices are going up. We are still seeing growth in events, but there is a slowdown in bookings as those events which are taking place are also made up of ones which have already been rolled over many times, a practice which is likely to come to an end soon.
I think 2023 will be a whole new year with a whole new bunch of issues. We have inflation, we have the potential for recession, we have a cost of living crisis and a lack of staff. China's still not back. America is just coming back, which is good, because they're a big market. But we're relying on domestic demand at the moment, so we must face the problems we are all fully aware of around us.
It's the third monthly drop in a row in terms of bookings, with April, May and June dropping every month in terms of average numbers of bookings, although not by much. The average number of bookings in April was 16. May was 15 and three quarters. And June was nearly 15. So very, very slightly, but after three months, there is a trend. I'm sure we will see a dip in July, because of summer. Obviously, we'll see a major dip in August. So September will be fascinating.
But prices are going up. For the second half of 2023, there has been a 39% increase compared to the first half. That’s an advance booking figure, so it will be larger than the eventual average, but the point is that prices are going up and up, but down go the bookings.
The good news is that the market is still buoyant and there is still volume out there. It's not doom and gloom, it's just important to keep an eye on the fact that this can’t go on. You've come off the desert island, you gorge yourself, you're now into a normal routine, and therefore you can have your three meals a day, you don't have to eat the entire platter; we’re entering into that territory.
And what would we see as normal? If we look at 2019 - which I don’t like to do - that would be good margins, good healthy businesses, good profits. If you look back at June 2019, there was an average of 6.6 bookings. It’s now more than double that at 14.9. That cannot continue.
The key to survival will be to figure out pricing, because if you're too expensive, the client will simply go elsewhere. But if you're too cheap, you'll shoot yourselves in the foot because costs are going to go up. If pricing is good and you’ve got a good product, you should be OK. So keeping an eye on your competition and the market in general is going to be crucial.