Uncertainty. It feels like it's the only certainty businesses have in the current political climate. And it's also a recurring theme of C&IT's annual State of the Industry Report for the third year running.
When C&IT was carrying out surveys for our annual State of the Industry Report a year ago, the UK was preparing to vote on whether the UK should remain or leave the EU. The year before that, it was the general election.
And this year, when we canvassed 150 corporate and agency planners on the key trends and challenges in the events industry, the UK was facing uncertainty again following Theresa May's decision to call a snap election.
We asked 100 agencies what outcome on 8 June they believed would be best for the events industry and 40% said a majority Conservative government, though its likely that figure was higher as many agencies declined to comment on political issues.
One agency owner said: "A clear majority is important, we don't want a hung parliament with government unable to govern effectively- the political fall-out from the past coalition would impact confidence."
Unfortunately that is exactly what happened May's goal of increasing her majority backfired and at the time of writing, she was still in talks with the Democratic Union Party about striking a deal to prop up her minority Conservative government. This is far from the "strong and stable" majority position she was hoping for as formal Brexit negotiations kick off.
So it's unsurprising that a quarter (26%) of agencies cited Brexit as the biggest challenge facing the industry. A further 14% said general political uncertainty is the greatest challenge for the industry, and 10% said it's the biggest challenge for their business. Meanwhile more than half of the 50 corporate planners surveyed (56%) said they were concerned about the impact of Brexit, and 10% identified Brexit as their greatest challenge in 2017.
Almost a quarter of agencies (23%) cited maintaining growth as one of the biggest challenges facing their business, and 14% said recruiting talent, though this figure was much lower than the 28% that said talent was their biggest issue in 2016.
The increasingly competitive marketplace was also identified as a key challenge facing the industry by 9% of agencies. Indeed, the agency landscape is continually changing with more new start-ups on the scene, several notable agencies - AddingValue and Bluehat UK Ltd - going into liquidation in the past couple of months, and more M&A activity including Capita buying NYS Corporate and Blackhawk Network buying Grass Roots Group and then subsequently announcing its intention to sell the Meetings & Events division.
Mark Riches, managing director at FIRST London, expects the evolution of the agency landscape to continue: "I think there will be more acquisitions, mergers and even closures. Market conditions are tough, so strategically a merger can bring cost efficiencies. Others are bullish and have a growth strategy that could include acquisitions to expand product portfolio or client base."
On the client side, budget is still the top challenge (23%), with doing more for less (11%), finding new and interesting venues (11%) and getting clients to try something different (9%) also cited as challenges.
Yet amid all these challenges, 2016 and the first half of 2017 have been pretty positive with 83% of agencies surveyed saying they expect to report some financial growth for the 2016/17 year, down from 91% a year ago. Almost two-thirds (64%) said the number of pitches they took part in increased, 66% of agencies increased headcount in 2016 and 83% expect to recruit in 2017.
While half of agencies (50%) said client budgets have mostly remained flat in 2017, 40% have seen budgets increase, while 40% of corporate respondents have also seen their budgets rise (up from 35% last year) and 71% of corporate planners expect to organise more events in 2017 than 2016.
Mark Scales, head of event solutions at Banks Sadler, says in general the agency has seen "a slight increase in budget for incentives and conferences. I think that's partly to do with perception and clients being more relaxed about being seen to be spending money on events. They are also more focused on measurement and justifying those budgets better".
Despite the ongoing uncertainty, there is a sense of resilience among event companies.
"There is clear uncertainty, whether its Brexit or terrorism or politics, but we just have put our heads down and focus on our clients. Deal with what you can control - look after your people, innovate your products and services, and to a certain extent, let the world carry on around you," says Riches.
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