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COVID 19s Effect on the Austrian Event Industry
Aug 26, 2020

COVID-19’s Effect on the Austrian Event Industry

No, we are not fine. This has become a phrase we never thought we would say almost daily. In April ’20, 571.477 (Source: AMS) people in Austria were without a job; more than ever before. This number has since been reduced somewhat. However, that does not mean that we are going in the right direction.

According to an IHS study, 140.000 people work in the Austrian congress and event industry and 30.000 businesses are involved in the industry generating around 8,9 billion Euro per year. This does not include the people employed in the tourism industry, cinemas, theaters, and museums. The COVID-19 crisis has disproportionally affected the services industry through the social distancing measurements that were first introduced in March 2020 and continue still. In April and May more than one million people were in short-time work, many from the services industry.

Since the beginning of the introduction of the restrictive measurements, most attention has been paid to the effects this had on gastronomy, tourisms, and even hairdressers and fashion stores. Now, in August, restaurants are serving drinks and meals again, Austrian are going on holiday in Austria, hairdressers are cutting hair again, but all large-scale events have been cancelled and so have most smaller events. As of 1. August, events with up to 200 people are allowed. This is a relief for Austrians wanting to celebrate their birthday or wedding, but it does not help the event industry significantly. Larger events – up to 1000 people indoors and 1250 outdoors – are only allowed when seated and with a COVID-19 prevention concept and a special COVID-19 appointee. These numbers are supposed to rise in September, but nothing is certain. On top of that, the risks and especially the liability involved in case of an infection are unpredictable and possibly catastrophic. Right now, the event industry is paralyzed and slowly dying.

Go digital! Some people say. Well, it is not that easy to pivot a real-life event to a digital event. Even after changing the event concept to suit a virtual environment, most events – except for conferences – are not suited to be enjoyed from home, alone. However, we have used the last few months to focus on how we can make virtual events more interesting in order to close the gap to live events. We have found that the key to holding a successful experiential virtual event is interactivity, along with an engaging virtual world, and shareable content. Now we just need clients who are brave enough to unfreeze their event and marketing budgets to invest in a new chapter of experiential marketing.

But you are allowed to hold events, even if it is with fewer people! This is another comment we often hear. The fact that most events are organized by private for-profit organizations is often overlooked. Maybe there is a sense of entitlement involved when it comes to the availability of arts in general. That it is something that should always just be on offer to us the people whether it is offered publicly or privately. However, a cinema or a theater will run at a loss if it can only fill 20% of its seats, and of that 20% only 60% is filled, because not all tickets are sold. The production and artist fees are not payable if only a handful of people would be able to come to the show. Brands don’t want to do promotions, because their superiors have set better-safe-than-sorry policies, where re-distributing the event and promotion marketing budget to online advertising is safer than interacting with people offline.

Have you not applied for the financial support offered by the government? Yes, of course we have. Unfortunately, not everybody is eligible to receive all the support that is on offer. Years of profitability must be proven and financial statements must be in perfect condition, or a support can become a liability. If you are close to retirement, you should not even waste your time to apply. And you can forget about any support if your clients have paid you a few months late or would like to pay you early for services that they hope you will perform in the future (whilst similarly protecting a hard-earned marketing budget). A loan might be up for grabs. Let’s not think about when repayment starts in 10 months.

This crisis has affected people and businesses in very different ways. Some have enjoyed the summer of their lives, where 2 weeks might have been spent indoors, but the rest outdoors in the sun going for walks and trips, not thinking about work but still being paid a full salary. Others were busy at work and some businesses were booming, such as delivery services, online shopping platforms and a number of consumer goods. Most people had to adjust in some way or another. Working from home has become a normality. Many employees have probably been reminded of their professional replaceability with the barrage of negative news that has flooded the media about job and company losses, shrinkages, and redundancies. However, how much understanding is there for the different routes people’s lives have been forced on this year?

A decent amount of research suggests that empathy is declining in the western world. Especially younger generations are more narcissistic and less able or willing to show understanding and display compassion for others. A lot of factors are involved in this downward trend, such as less social cohesion and more loose familial ties, technology and social media creating more physical distance between people, more pressure to perform as an individual, increasing competition, more vocal dividing rhetoric by influential people, and a generally overwhelming and demanding environment. However, lack of empathy is not necessarily a permanent affliction. It is something relative, not something immovably internalized. If there is a will or a need, it can be discussed, recognized and understood. As it is not attached to the individual, it can be compared to others, and thereby changed if the desire is there.

A recent study titled “The emotional path to action: Empathy promotes physical distancing and wearing face masks during the COVID-19 pandemic” shows that empathy is a basic motivation for physical distancing and wearing face masks, and that inducing empathy for those most vulnerable to the virus promotes the motivation to adhere to these measures (whereas providing mere information about its importance is not). Perhaps an active encouragement of the ability to emotionally relate to others, including those who have been professionally hit hard by the COVID-19 crisis, will provide the necessary tinder for invoking more natural empathetic responses. It would be sad if the year 2020 paves the way for more division, binary opinions, hateful rhetoric, and a general uncaring attitude towards others. Instead, we should work hard to fight for a cultural change that is more inclusive, caring and compassionate. As Judy Garland put it so unassumingly, “wouldn`t it be wonderful if we could all be a little more gentle with each other, and a little more loving, have a little more empathy, and maybe we’d like each other a little bit more”.

As for the Austrian event industry, the absolute majority of scheduled events have been cancelled. Some well-established events – such as Feschmarkt – cautiously, but determinately, went ahead anyway with satisfying results and the added bonus of being one of few events in 2020. Especially if COVID-19 and other strains will linger on into 2021, many large events will change their concept from short highly frequented events to events that are extended over a longer period of time and allow the spread of visitors. We have already seen this being successfully done by Donauinselfest and the Ottakringer Bierfest. Digitalization will also become more and more integrated in future events, but will not replace live events.

The Austrian corporate landscape will change. Depending on how long the restrictions will be in place, potentially drastically. The industry historically consists of a very large segment of one-person companies that are dependent on a small number of clients. Without having a wide clientele and the potential to shift to alternative jobs, 2020 will be a catastrophic year. Most of the larger and more established agencies will weather the storm and will probably end up being more streamlined. A large number of one-person companies might not be able to survive, especially if the 2021 spring trade show and conference season is also still impacted. Stage and event equipment companies with expensive leveraged equipment in stock, will need solid governmental support. Otherwise they won’t be able to fulfil their repayment terms. Event organizers will survive this year with putting their employees in short term work arrangements and possibly a number of redundancies. The cash from pre-sold (and not reclaimed) tickets will most likely keep them liquid long enough for the next season. Artists and artist support personnel are struggling and will need proper and better state support. They have been left with next to zero income from live events this year.

There are many more professions to mention that have been severely affected by COVID-19 and the imposed restrictions. All these people that are clearly “not fine” are hoping for the revival of their industry. Even if COVID-19 and other strains are not going to disappear from our environment, we must find ways to revitalize live events. The climate has undoubtedly changed, however, that doesn’t mean that cancellation is the only option. In order to stay on top, you need to be innovative and stay present in your environment. In these times that means being a bit more daring, but with a proper and safe plan.

Written by Aisha N. van der Staal and Gregor Wepper