Rise in Event Costs: What’s Causing it and What is the Impact?
by Maithili Chakravarthy Industry Watch | December 29, 2021 | News
On 15 December, the Event Equipment Services Association (EESA) announced a 15 to 20pc increase in cost of equipment rentals and technical services for live events.
Some of the event management companies EVENTFAQS spoke with attributed it to post-pandemic times when demand seems to have risen, resulting in a shortfall in supply.
That is not the only issue of the day. Some say that manpower diverted to virtual events has resulted in a smaller labour force available for on-ground events. Labour costs have also increased, they point out.
We asked a few event industry professionals to reflect on the price rise of both technical services and event equipment rentals. We also asked them if the raised prices are passed on to clients, or do event management companies absorb them even if in part, to remain competitive?
Says Bala Nicholas, Founder and CEO of Bengaluru-based Dreams Events and Services: “We usually adjudge the client’s budget before we quote rates to them. Rates may change depending on the client.. Sometimes we might bear part of the raised equipment rental costs, and sometimes, we pass the same on to our clients. Costing has risen by around 10pc.”
Ankit N Rao of ANR Weddings and Events says that post the pandemic, the cost of sound and lights, and other logistical support for events has increased overall. “If pre-Covid an event cost 1 lakh, today it costs 1,15,000 to 1,30,000. We are seeing that event materialisation is taking time, and sometimes they don’t materialise. Four out of 10 events will materialise, six won’t, mainly due to the pricing today. A lot of to and fro is taking place; a lot of negotiation is taking place between us and our clients. In the end we have to make a competitive pitch. There is inflation in general in the market, not just in the event industry. Today there is also a higher demand for skilled labour…”
Deepali Karia of Vow Events, a company that specialises mainly in event décor, says that the price of raw material which is imported from China, has gone up with the onset of the pandemic, and ‘business is down’ in general. Shilpa Archana Ashok of Angel Events notes that the raised costs will have to be passed on to clients in order to maintain a profit ratio, and to justify their continued existence in the business.
Manoj Mahla of Craftworld Events notes that today business is booming, even greater than before the pandemic. October and November have been particularly good, given it is the season for weddings, he adds. He reveals that attendant demand for equipment has increased resulting in a price rise of 15 to 20pc. He also adds that profit margins have indeed been affected.
“Our old customers who know our work keep coming back despite the price rise, however it is tougher to find new customers. There is tough competition out there. Also some manpower is being directed towards virtual events. If the team has five to seven members, part of that is working on virtual events. There are indeed concerns about a third wave and manpower isn’t available to the extent it was. If we could do three or four events in a day, today we are doing only two or three,” he explains.
Bhavnesh Sawhney, Founder, FB Celebrations, agrees with other event entrepreneurs: “Costs have increased in all spheres... This is due to an increase in logistics costs and minimum import prices of equipment. Also because there weren’t many events taking place during the pandemic last year, we are experiencing a surge of events today leading to a shortage of equipment. These factors have led to the increase of costs. We won’t be able to factor these costs internally and they will have to be passed on to the
Booming demand post Covid lull spurred rise in equipment rental and technical service costs, say event pros; skilled labour for on-ground events in demand too.