Events Industry Wracked By Pandemic Confident of Comeback

The 2021 North American International Auto Show has been cancelled and moved to Pontiac.

There’s a line from the old Jackson Browne song “The Load Out,” that talks about how people who attend events have no idea what goes on backstage.

“Of slamming doors and folding chairs and that’s a sound they’ll never know” is a sentiment Dave Gilles knows very well.

Gilles, the chief operating officer of Creative Day Technologies who has more than 30 years’ experience in the events business, has watched the COVID-19 pandemic wreak havoc on a number of industries, none any worse than his business: Events.

Aside from working with Chrysler on product releases and press events, Creative Day Technologies has made a concerted effort to diversify their business with non-automotive accounts and projects such as award shows, philanthropic fundraisers and annual annual corporate meetings.

With state and federal guidelines and stay-at-home orders banning large gatherings during the pandemic, Creative Day is looking at large losses.

Gilles, whose experience includes work in live news, sports and worldwide Fortune 100 events, expects losses in the $1.4 billion industry to reach 50% to 60%.

“We lost $1 to $2 million in revenue and it’s hard to say what will come back,” Gilles said. “The economic impact can’t be measured yet and will have to wait until the end of the year. There were many big shows that were canceled and those dollars cannot come back.”

When what he called “an avalanche” of cancellations and postponements flooded in, Gilles was left with a tough choice: Furloughing his employees.

Gilles said he kept his staff on at first, holding out for May and June events, but once those cancelled he needed to make drastic reductions in overhead. He said he did get a loan from the Paycheck Protection Program – the small-business relief part of the CARES Act designed to help companies meet payroll and other expenses – but it won’t help immediately.

Unlike businesses such as salons, he pointed out, Creative Day can’t turn back on overnight. It likely won’t be back full-throttle until July.

“The PPP (loan) kicked the can down the road,” Gilles said, “but didn’t necessarily take us to the finish line.”

Gilles said his barometer for when live in-person events come back is the sports and gaming industries. “If you can allow people to sit together in a sports stadium or a black jack table, then you can allow people to sit in a ballroom together,” he said.  

Even once social distancing has been eliminated, corporate responsibility will have to weigh in. “No company wants to be the one that brings people back to a big meeting and someone comes down with the virus,” said Gilles, who has confirmed events in the fourth quarter and is optimistic for the future of events.

Island without wheels
Michele Hodges had been thinking of ways to migrate away from the traditional fundraising events model before the cancellation of the Detroit Grand Prix, the annual race held on Belle Isle.

Hodges, president and CEO of The Belle Isle Conservancy, in tandem with the Grand Prix, generally host the Grand Prixmiere Gala. The $500,000 goal was a modest one — the actual amount fundraised would have likely exceeded that number — until the event was canceled. The secondary blow to the organization is that the dollars are operational ones and the hardest to raise for non-profits.

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“We will feel the impact of that loss … Trying to transition away from reliance on that money and looking for replacements dollars,” Hodges said.

The intent was to postpone the event because the move-in process needed to initiate during the lockdown period.  However, even if the event had been scheduled on the other side of Michigan’s stay-at-home order, it wouldn’t have been able to get installed in time.

During that window of time, there were 43 weddings that would have been displaced and, to the credit of the Grand Prix, they understood this and made the difficult decision to cancel instead of postponing.

With the economic impact of the surrounding businesses likely in the $40 to $50 million range, the decision “did not come lightly,” according to Hodges.

As with many non-profits, the fundraisers are postponed or canceled. The money that came from the Grand Prix went to keeping the aquarium free and open to the public. Hodges and her team are already looking for the next generation of revenue that allows them to be sustainable and thrive, llike Tip the Scales and a new society level called The Phoenix.

Auto show no-go
Another popular Detroit standard is the North American International Auto Show, for years a staple in Michigan winters. This year, the decision was made to move it to June, and organizers were planning on having the TCF Center (formerly Cobo Hall) ready to go.

Then the pandemic hit. Michigan Gov. Gretchen Whitmer issued a stay-at-home order set to expire April 30, and then designated the TCF Center as a field hospital to handle COVID-19 patients. The TCF Center began taking COVID patients last week.

With the center now serving coronavirus patients, NAIAS officials made the decision to cancel the auto show.

NAIAS Executive Director Rod Alberts said officials completely agreed with the decision.

“Although we were teed up in June for an amazing and re-imagined North American International Auto Show, we had to cancel because our venue, the TCF Center, was selected as a site for hospital by the federal government – a decision we fully supported because we understand the health and safety of our local community had to be the top priority,” Alberts said in a statement.

Coming back
Hodges is hoping during this extraordinary moment that people who are already philanthropic and benevolent will feel an additional call to action to help at this critical moment to ensure organizations stay intact and the tradition of Belle Isle continues.

So many factors play into a successful event, from picking a non-competing date, ensuring sponsors’ benefits are competitive, how to be heard amongst the noise and to exceed capacity, all the things the attendees don’t think about, like the sound of folding chairs.

Hodges is confident the events industry will innovate and be the entrepreneurs it has always been.

“Event shouldn’t disappear,” she said. “We all knew events couldn’t sustain organizations to the extent they did. While it is a difficult transition, we are entrepreneurial so some model will emerge and it will reflect the outcome of the crisis.

“We were already thinking about reinventing the event, this is accelerating it,” Hodges added. “We can’t isolate for the rest of time, but businesses need to give event attendees the confidence it is safe. Belle Isle is meant to celebrate life’s moments first and foremost for the park user — your wedding, your engagement, your place to mourn, your place to celebrate, your place to find peace. Humans like to be with one another but it will be awhile.”