Via the ABC:
Leaders of Australia’s $30 billion events and conference industry are watching nervously as clients take precautions to keep visitors safe, or — in rising numbers — postpone or cancel their plans due to coronavirus.
Chief executive of Meetings & Events Australia Robyn Johnson said when the economy contracts, the events industry is one of the first impacted.
Tech giant Cisco was supposed to host more than 8,500 people at its key Asia-Pacific conference Cisco Live in Melbourne for three days this week, but cancelled the event due to “ongoing concerns” about the outbreak.
“Our customers, partners and employees are our top priority and we strongly believe this is the right decision given the current circumstances,” the company said in a statement.
Caryn Shipp is with Place Management NSW, the body responsible for managing some of Sydney’s heritage and cultural precincts at The Rocks and Darling Harbour.
“Most people get surprised that there are so many things going on behind the scenes,” she added, noting a pop-up event for the T20 World Cup was still going ahead yesterday.
“I always get told, ‘I never knew there were so many people involved in an event’,” she said.
Events globally get cancelled
The upheaval for the events industry is a global problem.
The Tokyo Olympics, set to start July 24, may yet be postponed or even cancelled.
The Tokyo Marathon normally has almost 40,000 runners and many times that lining the course. This week only elite runners and wheelchair athletes raced, along empty streets.
The Geneva International Motor Show was cancelled after the Swiss Government banned gatherings of more than 1,000 people.
The Louvre museum in Paris, with one of the most famous art collections in the world, is shut.
And while the Australian Grand Prix is going ahead, the Shanghai race in April is cancelled and the event’s stop in Vietnam is in doubt.
Global hotelier Hyatt Hotels has withdrawn its recently released 2020 financial projections because of the impact of the virus, particularly inside China and with corporations imposing travel restrictions on staff.
The US company detailed a decrease in last-minute bookings and a rise in group cancellations in North America and Europe.
The company’s chief executive, Mark Hoplamazian, said the situation was evolving.
“And our ability to assess the financial impact of COVID-19 on our business continues to be limited, due to quickly changing circumstances and uncertain consumer demand for travel,” he said.
Bushfires already had a negative impact on tourism
The peak time of year for the industry — February and March — was already affected by the summer’s catastrophic bushfires before the coronavirus started its global spread.
The “downstream” industries of tourism, hotels and restaurants are bearing the current brunt of the slowing number of foreign visitors.
“Our industry members are getting very nervous.”
“And that’s going to be a struggle for our industry because we have about 80 per cent of our members are small businesses and if this is long-term, they will really struggle to keep the doors open.”
The International Convention Centre (ICC) in Sydney has 70 events booked this month, and more than 100 booked the month after.
Only one has cancelled so far, but chief executive Geoff Donaghy expects that number to rise.
“[There’s] a great deal of concern being expressed by those clients,” Mr Donaghy said.
Events that have delegates attending from Asia were likely to be impacted.
The daily news about the spread of the disease locally is “starting to bite” now, with concerned inquiries from the hosts of events with a domestic audience.
But it’s not the first time the industry has faced such issues.
“When I look back at all the major issues, major crises that affect us every four to five years … health epidemics SARS, MERS, things like the September 11 [terror attacks] and things like natural disasters … something like this happens on a relatively regular basis,”‘ Mr Donaghy said.
Industry hopes to recover but uncertain how fast
While there is an understandable focus on health and safety required to enable meetings to keep running, with conferences booked up to five years in advance, the operator of Sydney’s key conference venue wants organisers to look to the future.
“So we need to make sure we maintain a market position, we keep a relationship going, we keep their pipeline of business activated — it’s incredibly important to have that dual approach to these sorts of situations”.
Accommodation Association chief executive Dean Long said escalating travel bans made it “difficult to determine outcomes,” but noted the “bounce” in global travel six months after Severe Acute Respiratory Syndrome (SARS) was contained in 2003.
“The support by both consumers and businesses will be vital in ensuring sustainable employment and operations for businesses in the visitor economy,” he said in a statement.
Hotel broker Dean Dransfield said the real impact was yet to hit the events industry, and the accommodation operators who depend on the trade.
The managing director of Dransfield Hotels & Resorts, Dean Dransfield has been helping clients buy and sell hotels for three decades.
He doesn’t foresee chains collapsing as bookings slow, but acknowledges there will be pain.
“We’ll see some big losers and also some moderate winners, and that will change throughout the year,” he said.
“I think the losers will emerge relatively quickly and the winners will emerge slowly through the balance of the year.”
“What we don’t know is how long the hard part is going to be.”
Hotels sector the biggest loser as Chinese visitors drop
Mr Dransfield predicts the losers will be hotels highly dependent on international visitors, particularly from China and South-East Asia.
He said while solid reserves of capital and low interest rates would likely limit financial distress, diving cash flow was a problem as guests stay away.
He predicted there would be a slow-down in future investment, potentially killing off some developments that haven’t yet broken ground on construction.
Uncertainty created by the spread of the virus will be ongoing.
The convention centre (ICC) in Sydney boasts it created over $900 million of spending in Sydney and New South Wales last year, with 90 per cent of that spent outside the building.
Conference guests stay for a shorter time than tourists but spend up to four or five times as much money in restaurants, shops and hotels while they’re here.
“We lose out, but the city and the city’s businesses lose out even more, unfortunately, as well,” he said.
Mr Donaghy said Australia may have already hit the worst-case scenario.
“It [coronavirus] is having a very significant effect on travel plans,” Mr Donaghy said.
But it was important to separate the economic discussion from the health discussion.
“The approach that the different governments are taking to dealing with containment will be something that they’ll have to carefully review periodically.”
“And it will be very interesting to see, in hindsight, whether they feel they’ve done enough or too much.”
I am sorry to have to be only honest one in the room but the truth is the conference industry is about to be razed as border shutdowns and local travel crashes right through our winter.
I’d recommend getting lines of credit, reducing costs and establishing virtual conference options urgently.
