Future uncertain for events sector amid ongoing labour shortage

The COVID-19 pandemic impacted the entire B.C. business community, but the arts, entertainment and events sectors have been especially hard hit. From reduced capacity at live events to labour shortages, those working in the sector are facing a host of challenges that have left them uncertain about the future.

Rick Smith is the president of RIGGIT Services, a full-service rigging, lighting, labour and solutions company, and Tim Lang is the vice president of operations and finance at Proshow Audiovisual, an audio-visual rentals and production services company. They both see similar challenges as they look to the near and mid-term future for their companies.

Both Smith and Lang noted that the pandemic has had a significant impact on the availability of freelance workers on whom many businesses in the sector rely. "Our industry makes large use of casual workers to help manage the fact that some days we might need over 100 technicians working on-site, and other days none. Pre-COVID, our roster of active freelance technicians was 182, comprising a total of approximately 13 full-time employees," said Lang. "Currently, about 45 of these casual employees are available to work, with a further 43 planning to return to the sector this fall. That means that we will only have around 50% of the capacity with our freelance technicians."

According to Smith, RIGGITS has found itself facing the same challenge. "We rely heavily on part-time or on-call staff, who often work for multiple employers on various productions, and that's where COVID's effects are most noticeable. Our on-call crew roster shrank by more than 80% through the pandemic, from 521 personnel in February 2020 to 95 individuals currently."

If the staffing shortage continues, both companies are uncertain of what their future might look like. Lang noted: "We will not be able to resume our pre-pandemic business volumes, which means that we would need to increase our rates and margins on the work we do have to retain economic viability for our business. This would also mean a major supply-side shortage for live events of all types."

Existing support for businesses in the form of the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) are slated to end on Oct. 23. Those programs have been a needed lifeline for the industry. "The number one item would be to extend the CEWS and CERS for live events supply chain businesses, at the full levels they were at for most of this year (CEWS at 75% with 70% revenue loss)." Lang said. "Currently we are operating around 60%-65% of normal revenue and expect that level to continue through the end of the year, we do not anticipate an increase above 75% of normal business until at least Q2 of 2022, and possibly not until 2023."

Smith noted there are unique considerations for the industry that further complicate recovery. "With live events, conventions, sporting events, concerts etc. there is a significant lag time of months required in order to conceive, create, develop and promote the project. That time gap, and the uncertainty regarding the nature of the government's next steps re: COVID, make it extremely challenging to assess forward-looking demand for the entire industry."

Reporting on the hardest-hit sectors has focused primarily on hospitality and tourism, but the events sector was also among the first to be shut down when health measures were introduced. "March 2020 through December 2020 brought a 75% drop in revenue compared to the same period in 2019," Lang said. "Q1 of 2021 continued with a 75% revenue drop; however, we have seen a slow climb to around 50% through Q2 and around 65% in Q3."

RIGGIT faced a similar decline in revenue early in the pandemic, Smith explained. "From March 2020 to December 2020, we saw an 85% drop in our overall business versus the previous year's billing. The remaining 15% of business that we were able to generate through 2020 and into 2021 was the result of an unrelenting organizational pivot to break into new markets by innovating to discover opportunities that complemented our traditional business model."

Although economic activity is picking up and employment is back to pre-pandemic levels, it is clear that it may take a considerable amount of time for many industries to get back on their feet. With the potential for subsidies to wind down coupled with a lack of available workers, many sectors, including those in arts, entertainment and events will continue to face challenges this fall and beyond.