First Free Story (1 of 3)Join Skift Pro
The American Rental Association (ARA) released its 2020 forecast last week for event and equipment rental revenue, which is expected to increase by 3.8 percent. Projected revenue for the year is expected to reach $58.1 billion — however, these numbers are based on projections made prior to the coronavirus outbreak and corresponding event cancellations.
Still, these preliminary numbers are sure to come as welcome news to rental companies, particularly as event planners have increasingly diverse options available to them when it comes to acquiring equipment. Some planners opt to buy their own AV equipment while others hire a third-party company to manage the entire creative planning process.
Event experience company PSAV, for example, is a leader in live event production, providing planners with a range of strategy and technology services. Companies like these are eating away at market share, evidenced by PSAV’s two acquisitions in 2019’s fourth quarter alone.
For planners, the fragmentation of options is a good thing. All of these factors are reflective of the fact that the events industry as a whole is experiencing growth. The events job outlook is expected to grow 7 percent through 2028, according to the U.S. Bureau of Labor Statistics, compared to the average occupation growth rate of just 5 percent.
The ARA in November 2019 reported multiyear growth rate projections for event and party rentals at 6.5 percent for 2019, 5.7 percent in 2020, 5.6 percent in 2021, 5.1 percent in 2022, and 5.5 percent in 2023.
“Despite signs of a slowing economy, the equipment and event rental industry continues to perform well. The most important thing for rental companies to do is continue to execute their business plans and aggressively manage their operations,” said John McClelland, ARA vice president for government affairs and chief economist.
The importance of event tech isn’t limited to just the U.S. Skift in 2018 reported on survey results of event planners in the Asia-Pacific region, who overwhelmingly cited access to interactive technology as the future’s most important meeting feature.
As widespread event cancellations hit both Asia and the world as a whole, however, this uncertainty could put a major dent in this strong outlook for rentals. Facebook, for example, recently canceled its San Francisco-based global marketing summit, resulting in a loss of revenue of $11 million for the city. If this trend continues in the coming weeks (and potentially months), the event rentals industry will surely feel the impact.
While the long-term events outlook is positive, particularly when it comes to rentals, there are still many questions surrounding just how much growth will be dampened by the coronavirus.