Email the editor

Event agencies face period of 'pain' as supplier confidence and costs increase

Dale Parmenter, of drp group, forecasts difficult times for agencies as industry continues recovery

Dale Parmenter

The managing director of a major UK events company has warned that the events industry is "on the brink" of a painful stage in its recovery from recession.

Drp group's Dale Parmenter says agencies will be forced to educate clients about rising supplier costs, as demand outstrips supply and prices are pushed upwards.

Parmenter, who has operated through three recessions, says this trend in the boom and bust cycle is nothing new.

"Anybody with their ear to the ground in the events industry can tell you that this is happening," he said.

"Some younger professionals will be experiencing their first boom and bust cycle and probably believe they are creatively battling on the front line of recession, innovating their way out of a tricky situation and delivering value across the board.

"I think we’re on the brink and agencies are about to embark on a period of pain, educating clients that the market is changing and prices will rise."

Industry professionals have widely acknowledged a supplier's market, where demand is outstripping supply.

Parmenter, who has narrowed down the boom and bust cycle to 9 stages, says in this recovery period (stage 4), agencies are being squeezed between customers who are still budget-conscious and the rising costs being demanded by suppliers. He says agencies must educate their clients until they understand the cost of business is increasing, before the market becomes buoyant once more (stage 5).

What follows, Parmenter argues, will be a harmonious period until more suppliers begin to appear (stage 7) and the fight for market share intensifies. Parmenter says supply will then outgrow demand (stage 8), prices will bottom out and then recession will hit (final stage).

He added: "Instead of focusing on this somewhat foolhardy endeavour, we should focus on remaining agile and ready to respond to the pressures of an ever-changing society.

"Working with clients to ensure they understand costs across the supply chain whilst maintaining an active focus on ROI both in and out of recession could be the difference between sink or swim.

"Maybe my view of the situation as cyclical, repetitive and unavoidable may seem pessimistic but I don’t see it that way at all. The market we operate in and the nature of capitalism means we all know that history will repeat. It’s how you set yourself up for both the boom times and bust."

Parmenter's full post can be read here.

Facebook Share Twitter Share LinkeIn Share