Coronavirus' Effects on the Event Industry Could Be Devastating

AI: (04:30)

Welcome back to the Only Successful Events podcast. I'm your host April Iannazzone and I am excited today to be joined by Andrea Michaels. I asked Andrea to come on this show because she is one of the staples in the industry. She's been around a little bit longer than me, but not by much. She is a wealth of knowledge. However, I brought her on for one specific topic and during our pre-show conversation the Coronavirus' effects on the events industry came up.

Andrea shared that she'd had a client that recently canceled the event that's happening just a few days because of the Coronavirus. I know that all of you event producers out there right now, this is either affecting the way that you're going to market your events or your events may be canceled in general.

You might be losing a big piece of money, a big piece of income because people don't want to plan events until they know really what's going on. So before we dive into the meat, Andrea, can you tell us a little bit about what you do and your background?

AM: (05:39)

I have been an event planner before the term event planner was even used. 

The days when they used to say, party planner. What we do with experiential events, which is kind of a word right now that's being used by everybody in the industry is. Interestingly enough, if a larger event isn't an experience, what is it actually about? 

We try to do customized, very creative events that are thoughtful and strategic. We try to integrate ourselves into what the client asks for and what the purpose of the event is.  I think it's important to help the industry develop along these, as you pointed out, many years in the industry.

AI: (06:48)

I only could point that out because I've been in the industry for a little over 20 years. So that is the only reason why I could point that out. I'm gonna put a link to Andrea's website in the show notes. I want you to check out her website and some of her past events, the pictures are spectacular. Her clientele really ranges. So definitely go check them out. Andrea, how has your business shifted throughout the years from when you first started to where you are now?

AM: (07:24)

When I first started, you want to go way back into the seventies way before many people watching or listening were born.

None of the things you see today even existed. 

So I imagine the business meeting now for a company. You would see 360 to wrap around LEDs, all kinds of fabulous lighting, custom music, and beautiful content. When I first started it wasn’t that way in the slightest. There was an empty stage with no lighting and maybe a microphone for the speaker. 

If you talked about what an evening event or hospitality event consisted it would have been linen which was provided by the hotel. The linen would be half-inch from the edge of the table, and maybe a piano player on stage. So imagine what you see today and just note the difference. It grew slowly, it didn't just evolve overnight. The speed of technology is what is developing and really moves very quickly, but it didn't at that time. So how has it evolved? It's completely different. You would never recognize it from when it first started.

AI: (08:59)

I totally agree. Years ago I had a catering and event production company. During my divorce, we closed it and sold off all our clients, all of that fun stuff. That was before there really was the internet. There was the internet, but it was just a little bit. I used to say to myself a few years later, I'm wow, if there was internet, I would have really killed it. We were doing well with the catering company.

If there was internet back then and I could advertise and get my message out the way I do now. It would have been crazy. 

AM: (09:37)

I will play devil's advocate on that one for just a sentence. As an event planner. I'm not a caterer, I'm not a decorated, I'm not a lighting company. Anything can be found on the internet. So your clients although they would have gone to you for catering suddenly want to piece everything together themselves and order directly. 

They just don't know what to do with it. Don’t know how to negotiate contracts or know how to negotiate entertainment. They don't know what to do to provide the right requirements. So it's fabulous in some ways but there's an overall picture here. There are also things about it that don't work.

AI: (10:25)

It definitely makes sense and I can see that point. How were you able to really sustain over the past 30 years and through all of the different transitions? I know a lot of people that just gave up because they didn't want to learn what's new and up to date and really stay cutting edge.

AM: (10:50)

Well, you can ask my staff because I still can't do a lot of things on the computer. I can’t even do an Excel spreadsheet probably, which I probably should. First of all, I’m cheap and I'm cautious. I don't spend money unless I know that I have plenty of money to spend. There’s always that rainy day part that I pay a lot of attention to.

Because just like coronavirus' effects on the events industry which you mentioned 

when days like that hit you still have to pay the payroll. Sustainability in the industry has been accomplished by two things, three actually. One I don't stress easily and I think that people do cannot sustain in this industry because it's very up and down on the street. The second thing is I surround myself with people with a lot of talent in various ways.

Whether we're dealing with the 22-year-old who is definitely not connecting with me, we're still showing something fresh and new while maintaining all the procedures. And I think procedures are really important along with documentation so you are always aware of business. So even though it's a creative industry, it's also about the business of doing business.

AI: (12:38)

That perfect advice because you still have a business, you need that solid foundation. That solid structure, those processes and procedures in place to really scale and have any team member pick up where you need them to pick up. Um, what was that? I think it was Henry Ford that said, I don't know everything, but I have a box on my desk with a bunch of buttons and each button is connected to somebody that knows what I need to know. 

I totally butchered that, but it's in the realm of you don't need to know everything. As long as you have somebody that knows that specific thing, you're your gold. Again, I totally butchered it, but definitely a great quote. I have to find the right one and put it in the show notes.

AM: (13:36)

Really interesting because my dad always used to say knowledge was knowing what you don't know and knowing someone who does. So I think that if it was Henry Ford, a wise man.

AI: (13:51)

So what advice would you give to people just starting out?

 With our only successful events course, we have a lot of people that think they want to be event planners. It sounds fun, It sounds interesting. They are starting a brand new business and we're helping them with those foundations, systems, and procedures. Really navigating the backend. What piece of advice would you give them being an industry veteran to people just starting out?

AM: (14:22)

First of all, don't assume because you planned your sorority’s summer party that you understand the business of event planning. Also, don't assume that it's just loads and loads of fun. It can be and it isn't.

AM: (14:39)

So when everybody else gets to leave the party at midnight, you're there till four or 5:00 AM striking. It's long, hard work. None of that is advice. Of course, when you're starting out in business, get the best lawyer and accountant that you can and make sure that everything you do is legal. Surround yourself with people who know a lot more than you do and make sure you make use of their talents and ask questions. 

The one thing about this industry that I think is unique is people openly share. Network like crazy, ask a lot of questions and then listen to the answers.

It's not a business about how much you know, it's about how much everybody else knows.

Attend conferences that are totally outside of our industry.

AM: (15:35)

Also, attend conferences that are great learning possibilities for people within the industry. Understand that it is a business. It's not just a plan of party.

AM: (15:54)

Did my sister in law's wedding, it's far more than that. It is about documentation. It is about procedures as you mentioned. So it's part creativity and part not. It's hard work and people need to understand that when they enter the industry.

AI: (16:13)

without a doubt.

AM: (16:15)

When say, what are you doing?  And I say I’m an event planner, the response is always oh, that sounds like so much fun. I say yeah, tell that to my feet!

AI: (16:31)

I don't know if you agree with me,

 But I always say it takes a special person to be in the event industry in general.

Also the restaurant hospitality. I  feel like that hustle needs to already be inside you. You can teach someone how to work fast and things like that. But that hustle, that drive, that fast quick motion, I feel it needs to kind of be ingrained in you.

AM: (17:01)

Absolutely! I think it’s interesting when you say hospitality. Most people don't have that natural instinct of being hospitable, warm and flexible. This isn't the right industry for them. You have to genuinely believe in what you're doing.

AI: (17:19)

So let's shift a little bit.

Right before the podcast, we were talking about how you had a cancellation, and the coronavirus' effects on the events industry.

Can you tell us a little bit about how that call went with your client?

AM: (17:38)

Let me start with heartbreak. I think that those of us who are very invested in what we do and create something unique and wonderful, we live to see it come to life. When it doesn't, it's heartbreaking. So it's not just business, it's also an emotional investment and a creative investment. We had a team of about seven or eight people driving down to San Diego from Los Angeles that were in the last minute confirmations and pre production for a multimillion-dollar event. 

The event was going to take place over five or six days, morning, noon and night. Every event, every activation was very strategic, very customized, never been done before. We got a call from the client that said, we've decided because of the Coronavirus and our 3000 people are international coming in from all over the world, that is a risk factor and therefore we are defining it as force Majeure. Which is my learning experience out of this. We will talk about that in a second.

AM: (18:56)

 Therefore the entire program was canceled. We were about 15 minutes or so outside of San Diego when we got that message.

AI: (19:09)

So they said canceled. They didn't say postponed, were going to pick another day? They told you canceled?

AM: (19:22)

Canceled because they have their projects scheduled years in advance. This is an annual conference so they know where they're going for the next five years. Therefore they're not coming back to San Diego. It is not a postponement. It's a total cancellation.

AI: (19:38)

Wow.  So you mentioned then it's straight into damage control.

What is damage control look like for you, for this particular event?

This is probably one of the larger ones that you were planning, right?

AM: (19:55)

Whether you call them vendors, suppliers or partners.

AM: (19:59)

It doesn't matter. You're canceling them. And there were about 700 of them. So we are talking about trucks on their way, exhibit builders in Las Vegas, to actually an entertainer that we were flying in from South Africa. So we had to tell them don't get on the plane.  People who are creating custom pieces of art that were half done and tell them to stop painting. 

So from beginning to end, it was trying to reach everybody as quickly as possible. The part that was difficult in this was some people had already arrived in San Diego. The guests, the participants. So do we do something for them? Do we do nothing for them? Were any of these money's going to be repurposed. 

AM: (20:59)

At some point, the client decided we were going to use an unusual venue. One of the unusual parts of this program is we were doing five simultaneous events in five different venues all over the city. Each was for five to six hundred people.  So could we repurpose money that we got in deposits and do something for the community? Donate food that was already pre-ordered? There were so many things to take that into consideration.

Coronavirus' effects on the events industry has left each person contacted feeling some of the devastation.

We were at the state invested so much in this realm.

AI: (21:39)

So I want you to go back to the term you said they were canceling under. I think I have a feeling what it is, but I'm not sure. I know that's not in my contract, so I might need to figure that out. 

AM: (21:56)

You need to have it in there. That’s one thing that I have learned. Everything you do should have this clause. You need to know that its open to interpretation. A force majeure is an act of God, a force beyond your control. Any natural disaster, hurricane, tornados and as we found out volcano eruptions. 

Here's where the sticky part is, is a flu-like virus an act of god? Is it a risk factor when no risk existed in San Diego but some countries people were coming from? Its legal entanglement at the moment. Every contract that we sign has different wording for forced Majeure. 

AI (23:02)

In most of our contracts, it's an act of God. A lot of our events are in South Florida. We're all over internationally, but the good majority of them are in Florida. So we always put in there for hurricanes. And then everything is refundable. We have it with our venues with our attendee tickets. But I honestly, until our call, I would not even think to include anything about a virus. I mean truthfully I don't think that is an act of God, but I guess it really depends on who's interpreting it and what it's going to shake out inside the courts and with the lawyers. 

AM: (23:44)

Now it’s going to be written into almost every forced Majeure clause at least as far as I can see due to coronavirus' effects on the events industry

​

Going on the internet and see what is coming in the news. But it hasn't been to date

AM: (23:51)

So again, it's open to interpretation. Here's the sticky part of it. From the client's point of view, it is forced Majeure,  therefore we have no event. If there is no event, you can't hire anyone to work on an event that doesn't exist. So therefore in some ways it is on our end as well. 

It's being interpreted in many ways and many companies are having to deal with this right now. 

So it's also a matter of how cooperative are your vendors and suppliers are going to be. Obviously food that hasn't been ordered, been delivered or prepared, should be refundable. If airline tickets are refundable, that needs to be passed onto the client. So I think it's going to be really sticky for awhile.

AM: (24:54)

The world health organization issued, not that it was a crisis, but that the travel permits were being rescinded and all that. So it's a matter of, okay, the values are bad and risk factor. Do we really want people potentially spreading this? Not a good idea.

AI: (25:18)

Yes, for the client it makes perfect sense and I'm sure it's devastating to the client as well.

Do you have to give back any money due to the coronavirus' effects on the events industry?

Are all of the deposits that they gave to your company nonrefundable? Or was it non refundable unless of an act of God?

AM : (25:51)

I guess we're going to see. Right now we're trying to mitigate each and every vendor to say what can you do to help out the situation, and we will refund those moments. So we have deposit money and I think the deposit money is what we used wisely. Cover actual expenses that can be documented. 

Here's where the business side of things come up. Everything is documented every expense. So if the expense is valid, it would be legitimate. We can't pay for instance the time that people don't work. On the other hand, people who passed up work, is that a legitimate expensive or not? If we hire an entertainer that passed on doing three or four the jobs during the week they were going to be here.

AM: (26:46)

Do they have a legitimate claim or don't they? That's going to be very up in the air for a while. I’m caught between a rock and a hard place because I definitely agree with the client that they should not have to pay for services, not used. On the other hand, I've been a vendor so much of my life as you would know from catering. It's lost opportunity and the profit on jobs like this is what would keep me in business.

So if there is no profit as the company, what do I do?

AI: (27:29)

I think too, as an event producer, this is where a lot of your relationships come into play. So this is why you never want to burn any bridges. You always want to treat your vendors, your clients, your customers the way that you want to be treated. Because you need them to help you out or try to brainstorm a solution to all of these different situations. Really it's more about bringing that community together, all of your resources and trying to come up with what's going to be the best solution for everybody involved. 

So definitely don't underestimate the power of building relationships, even if you've never met them before. The entertainer that you were flying from South Africa, who knows when you're going to need them at another event. You can possibly bring this back around if they're treated the right way in this situation.

AM: (28:34)

You're absolutely correct. That is part of the things I think all the newbies need to learn. Those relationships are what keep you in business. So when you say how do you sustain? It’s by understanding that's what matters. Just the same way relationships work in your personal life, business relationships aren’t any different. 

AI: (28:58)

Andrea, nobody knows at the moment what's going to go on with the Coronavirus' effects on the events industry.

How do you think it's going to instantly impact the industry? Do you think that there's a lot of events going on that are being canceled left and right?

AM: (29:20)

There are. All you have to do is take a look at what is going on in the industry right now.  What's going on on the internet. Almost every international conference in Europe and in the US is canceling. The economic impact you so horrendous. When you take a look at hotels and how they are canceling thousands of rooms when major conferences are being canceled. The economic impact is unbelievable. 

AI: (30:01)

I think it's very interesting that you mentioned your client didn't reschedule this. They just canceled it. In the back of my mind, I'm like, okay, well maybe it's canceled for the moment, but they're going to redo it. You know, in 2021 or everything can stay in place. They're just going to push it out another year. 

We don't know the outcome with the Coronavirus' effects on the events industry.

And in many cases, as you mentioned this event was a couple of years in the making. So it's hard to really predict that. Do you think that some of them will be postponed or do you think that people are just not planning?

sAM: (30:47)

Yeah, absolutely. Many of them will be postponed. That doesn't necessarily mean that everything is still available. Take the look into the venue, can you get food? Of course, you can food. Can you get Florals? Yes, you get florals and there will always be linen available. But is that one headliner going to be available if you have to postpone?

They want to be paid in full, their terms of the contract with force majeure, you don't mess with that. So you just don't know.  The venue might not be available, the hotel rooms might not be available at the time you want to reschedule. So it is lost opportunity to take consideration.

AI: (31:32)

Now for one of my companies, Med Spa Growth & Profitability, I mentioned that we have workshops that are planned a couple of times a month throughout the United States. We actually canceled the next six months of the ones that were sporadic in the United States. We do have our annual conference that's still booked. We're moving forward with that.

So I'm wondering your opinion on when you are having an event,

what can you do to safeguard your attendees from the coronavirus' effects on the events industry?

 I'll share what we plan on doing, but I want to hear any ideas that you have on your side.

AM: (32:21)

I think inflammation is the key to it  I've noticed. I'm flooded with emails right now that are listing all the things you can do, which range cute little message about washing your hands. One of our good partners in China is very cute. She sent out a picture of herself in a face mask saying its really wonderful what I’m saving on makeup. 

AI: (32:49)

I love that!

AM: (32:52)

It's also taking positive attitude. Saying this is a real risk, here are the things you need to watch out for. Maybe you don't hug and kiss as much. Be wearier of shaking hands.  As a gift, you could hand out hand sanitizer to all of your participants. You need to very closely look at what your interactions are that you're providing as part of this meeting or workshop. 

So it’s about, here are the real risks. This is our stance on it. We understand if you're not willing to take this risk, it’s fully fundable to you. Which is actually what our client did before they had to cancel. If you choose not to attend its fully refundable.

I think it is all about giving out very honest information.

AI: (33:54)

I love that you said letting them know your stance on it. We are planning on doing as well. We always send out here's what to expect and how to make the most out of your experience. But we are adding an extra piece there. Here's what we suggest, here's how we feel, here's why we decided to move forward with the event and here's how you can help us protect you and the other attendees. 

We're absolutely doing the hand sanitizer. Normally, I am not into promo sanitizers to put your name or logo on the sanitizing bottle. They'll use it six times and it will end up in the garbage. But we are doing them in the bags this year.

We are doing hand sanitizing stations throughout the venue to keep up with the coronavirus' effects on the events industry. 

and put up signs all over as well.

AI: (34:51)

But I love the idea of putting on a mask and doing a funny little thing in the bathrooms and maybe throughout with just to lighten the air. We are going to have our MC at the beginning of the event come on stage. They are going to say, I know sometimes you only see each other every few months. 

You might not be feeling sick, Somebody else might be not feeling sick but you never know. So let's just do those shoulder and elbow bumps that you do in the kitchen and say hello. Without a doubt, there's no Buffet's going on. Not that we do many buffets in general, but there's no buffet is going on to protect our guests.

AM: (35:42)

Well, as you were talking, I was thinking. 

AM: (35:44)

When I got to San Diego, the first thing I did was I went out and got Lysol or pine sol. Let's not give it a brand name, but things like the TV remote in the room, the phones, those are all breeding grounds.

AI: (35:59)

So I travel with Lysol in my suitcase for that reason, even at the nicest hotels

AM: (36:05)

I had a little one but I ran out of that very quickly. I decided I better get the big can because I want him to be sure that anybody on my team didn't have it was able to use it. That was in the meeting rooms.

AM: (36:17)

We were wiping down a conference table we all sat at. So I think that's just a thoughtful thing you can do for the people who didn’t think about that.

AI: (36:29)

I love that. Definitely. We always have for our speakers and vendors, we always have a basket in their room. I didn't think about that. People think I'm weird that I travel with Lysol. So I never thought about giving it to other people. But in light of the circumstances that might be a great addition to their wine basket.

That's a great idea. So I am wondering, obviously now this just happened to you, you have to go do some cleanup.

How long do you think it's going to take you to be done with this event?

AM: (37:18)

Are you talking about collecting money or paying out?

AI: (37:22)

What I mean is where It's not a headache anymore.

AM: (37:26)

Well for me it's always going to be. I won't call it a headache, I'll call it a heartache. It’s going to bother me for a long time. You reference looking at my website. So where did those pictures come from?  Where did all these pictures of fantastic events come from? They came from events that actually happened. In terms of our entertainers, lighting designers, decorators, and builders.

None of them will have anything to show for this. So it's not only the cancellation money, it's about customer cost. Beautiful technical envisions, there won't be anything. They're not happening. 

So even when you talk about postpone. People can post on social media and resell their services. That's an opportunity which is lost as well. So right now we're in the process of catching up with about 700 vendors to find out what we can work out. That's going to take negotiating. Some of then are holding out,  others are being extremely generous and so we have to work through that. 

Once we've worked through the coronavirus' effects on the events industry

Then it's presenting everything to the client and figuring out on both ends what can be done. So in terms of the business of it, I think it's probably going to be a month before everything gets settled. Collected monies and paying out money is a different issue. Some of these places are very small businesses. I don’t want to hold out on money,  But sometimes I don't have a choice.

AI: (39:13)

Andrea, I would love to have you back on again.  I'll let this settle down a little bit, but I really do want to jump on again and talk about where you think the event industry is going in general, what opportunities are out there, all the stuff that we were going to talk about.  I think in light of what just happened to you guys,

Coronavirus' effects on on the events industry,  this is a big topic that I'm glad that we covered today.

AM: (39:42)

Thank you! Anytime. I promise to do my hair and makeup again, all you have to do is ask.

AI: (39:49)

Andrea, can you tell everybody where they can learn more about you and extraordinary events?

AM: (40:07)

First of all, I've published a book, which is a lot of fun. It's called reflections at the successful wallflower. It talks a lot about starting a business, being in business and how to manage your personal life. The challenges in your personal life and in business are much the same. It’s available on Amazon and Barnes and noble.

AI: (40:29)

I'll put the link to that too in the show notes for everybody.

AM: (40:34)

Extraordinaryevents.com you can find us on our website.

We have a good newsletter that we publish every single week. 

You can sign up for that. It's all about good news. So no promotions, but it's a lot of fun. You can call me on my cell phone anytime anybody ever wants to. This is my gift back to the event industry.

The events industry has given me a wonderful, fertile life. And anytime somebody wants to be mentored or has a question, I'll put it out there. It’s 818-512-1603 I’m always available. If someone wants to call the office number it is 818-783-6112  and as a company, we're available to answer questions and help you out. We're happy to share our experiences.

AI: (41:39)

That's very generous.

AM: (41:41)

We are also on LinkedIn, Facebook, Instagram.

AI: (41:44)

Well, thank you so much. This has been fun and good luck in the next couple of months.

AM: (41:51)

Thank you. It was a pleasure.