Impact of Rising Prices on the Event Industry | Eventdrive

Between COVID-19 Crisis Slowdowns, the War in Ukraine, Inflation, and General Price Increases, the Event Industry Has Been Severely Tested Over the Past Three Years

A study jointly conducted by the Research Institute for Fairs, Congresses, and Live Communication (R.I.F.E.L) and the German Federal Event Management Association highlighted the difficulties the sector has faced since 2020. This study, entitled “Cost Inflation Trends Events / Exhibitions / Trade Fair,” details the widespread price increases in Europe from 2019 to 2022.

In this article, Eventdrive analyzes and explains the causes and consequences of these increases on the event industry.

The Changes in the Event Industry Over the Past Three Years

Since 2020, the event industry has faced a disproportionate rise in costs. Indeed, the COVID-19 crisis, the war in Ukraine, and the high inflation seen in France since the summer of 2021 have directly impacted event budgets.

Simultaneously, the event sector faced another significant issue: a drop in activity, which averaged -68.4% between 2020 and 2022 due to the slowdowns and restrictions imposed during and after the COVID-19 pandemic.

To top it off, since 2022, the event industry has been grappling with an unprecedented labor shortage. Before the pandemic, the sector operated with 50% permanent employees, with the remaining 50% comprising freelancers, student jobs, and volunteers. Since 2022, although many positions have been retained, finding temporary workers to supplement staff has become increasingly difficult—let alone finding skilled temporary workers.

The Reasons Behind Price Increases and Their Impact on Event Costs

The causes of rising costs impacting the event industry are varied. First, the health measures required during the COVID-19 crisis created new budget items and imposed reduced capacities on in-person events, simultaneously reducing revenue sources like ticket sales. Additionally, the new demands in the event sector now involve higher standards for hygiene and sustainability, necessitating larger budgets.

Other COVID-19-related factors also contributed to the increase in event service costs:

• The decline in event team staff (-54% in one year), combined with higher demand when events resumed, no longer allows for all requests to be met, leading to a real loss of revenue for event providers.
• With fewer suppliers available, it has become more challenging to create competitive bidding.

Another significant factor affecting post-COVID event budgets is persistent inflation, especially rising energy and food prices, which place the event industry in a difficult position. Rising transport prices, increasing costs of raw materials, and runaway inflation are directly impacting the sector.

According to representatives of the German event industry, “Organizers and contracting companies should expect further cost increases.” Additionally, delivery times have lengthened, requiring event planners to anticipate their planning even more.

Which Budget Lines Are Most Impacted by the Generalized Price Increases?

• Catering: Inflation has significantly impacted food prices, thereby increasing catering costs for events.
• Guest Logistics: Airlines and various transport companies face rising costs due to the inflation of raw materials, especially the surge in oil prices. In 2023, a trip could cost an average of 25% more than in 2022. Hotel prices have also increased since the post-COVID recovery, with hotel companies raising margins to compensate for losses in 2020 and 2021.
• Venue Rental: Rising energy costs weigh on event venues, which are compelled to increase rental rates.
• Equipment Rental: Rising fuel prices directly impact freight companies. Transport costs rose by 16% from September 2021 to September 2022. As a result, all rented or delivered equipment—furniture, technical equipment, structures for animation, goodies—has become more expensive.

What Are the Consequences on Event Service Pricing?

Between the general price increases for various event services, raw materials, and the current labor shortage, the event sector has seen significant cost increases. Indeed, service providers have had to raise their rates to continue offering quality services.

The study “Cost Inflation Trends Events / Exhibitions / Trade Fair” highlights a 58% increase in the cost of organizing events for up to 250 participants compared to 2019.

The trend decreases as event size increases but remains significant, with a 55% increase for events with up to 600 participants and a 46% increase for up to 1,500 participants.

The conclusion is clear: organizing an event or trade show costs much more in 2022 than it did in 2019, and unfortunately, this trend will only intensify in the coming years. “Doing more with less” will become the norm in the event industry, a real challenge for event planners who will need to be even more inventive.