After a big break in event attendance due to pandemic-related cancellations and closures, people everywhere are looking to get back to events, meetings, and other travel. However, unfortunately, with rising fuel prices across the nation, the events industry is getting hit with another unexpected setback.
Although the events industry isn’t the only one affected, it was already among one of the hardest-hit sectors by the pandemic.
Has the events industry prepared for future hardships in the wake of the pandemic or will this new setback further shrink the industry? Let’s consider these possibilities as we dive further into how rising gas prices and inflation will affect the future of events.
Why are prices inflated?
The average price for a gallon of gas in the US hit $4.99 according to the most recent reading from AAA, which marked the 31st time in the last 32 days that gas prices have climbed by record numbers in the country. In fact, gas prices have risen 8%, or 39 cents, since the beginning of Memorial Day weekend. On top of that, there are now 20 states (and D.C.) that have over $5/gallon fuel costs, including an average of $6.42 in California as of June https://blog.rentacomputer.com/wp-admin/upload.php10th.
But what causes high gas prices? While the United States has never imported significant amounts of oil from Russia, the commodity is traded on global markets – with Europe greatly dependent on Russian exports. As the EU recently decided to ban oil tanker shipments from Russia, oil prices soared on global markets. In fact, the price for a barrel of Brent crude oil has inflated from $100 per barrel a month ago to $124 as of the second week in June. So it’s unknown how much drivers are willing to pay before they cut back on driving.
So how does this affect the inflation of other commodities? Energy accounted for 7.3% of the Consumer Price Index (CPI), or the measurement of overall change in consumer prices over time, based on the cost of goods and services. In addition to the direct effect on inflation, higher gas prices also indirectly raise inflation since crude oil is a key ingredient in petrochemicals used to make plastic, which causes an increase in any products made with plastic. More related to the events industry, transportation costs are directly affected since the cost of oil accounts for roughly half of the retail price of gasoline. Although the country is less reliant on oil than it was in the 1970s when we saw similar levels of inflation, the bottom line is that oil is a key input in manufacturing and a major cost factor in shipping, which affects the Producer Price Index (PPI) even more strongly than it does the CPI. This results in inflation across the board, or to put it simply – when the cost of oil jumps, so does the cost of everything else.
As experts predict the worst is yet to come, here’s what we can expect from the events sector.
How will fuel prices affect the events industry?
Since any manufacturing or transportation that requires energy input from carbon will be immediately affected, companies are forced to make predictions and change the way they do business. Even as interest rate hikes are brought in to control inflation, companies are still forced to eat certain costs associated with transportation in order to keep their consumers happy.
Since costs in the field of event production have increased by 2 and a half fold since before the pandemic, event production companies are compelled to alter the way they put on events. Companies that used to ship teams, equipment, and sponsors across the country are choosing to put on their events in smaller, more local, or regional venues to help alleviate some of the fuel costs. Not only are prices going through the roof for long-distance travel, but intercity travel costs are too high for many companies to absorb – further stipulating that these event companies find closer and potentially more remote venues. But will consumers be able to foot the bill for travel costs? That’s where the pent-up demand for the return to normalcy – and more importantly hybrid events – comes in.
Hybrid events continue to develop
We predicted back in 2021 that hybrid events would continue to develop in the wake of the pandemic, and the industry has come a long way since then. But there is still a long way to go when it comes to getting people engaged in, and getting them to attend, hybrid events.
Since one of the biggest factors pushing event planners toward a hybrid event format has been the difficulty associated with international travel during times of hardship like pandemics and inflation, it’s a fair assumption that rising fuel prices will have a similar impact.
However, hybrid events haven’t developed or gained popularity quickly enough to incorporate a strong virtual presence into most event productions. But hope is on the horizon – as larger conferences begin to adopt a hybrid format, smaller companies are sure to follow suit after analyzing which practices were successful in a virtual or hybrid format.
Once the trend eventually catches on, and event companies have the ins and outs of adding virtual aspects figured out, the industry has the potential to enhance the overall sustainability of an event – not only to keep margins high but to reduce carbon footprints and help support environmental sustainability.
How rising fuel costs help promote green energy practices
One of the aspects that aren’t being talked about is how pushing events to closer proximities affects the environment. With rising trucking costs and inflation heading towards continued all-time highs, it’s easy to predict that event organizers will utilize smaller, more local venues to reduce trucking costs – but this also benefits the environment by reducing carbon footprints.
While this shift has companies scrambling to find local venues and suppliers, this provides a new opportunity from a marketing standpoint. Since sustainability was one of the biggest trends pre-covid, pushing green practices and advertising these efforts to your customers could have a positive impact on these brands’ reputations.
As circumstances require actual reductions in carbon consumption, rather than relying on the purchase of carbon offsets to achieve net-zero, this could provide an opportunity to show consumers that your company takes their environmental impact seriously. As consumers have more information available relating to companies’ carbon footprints, the country is only going to get smarter when it comes to holding organizations responsible for their corporate social responsibility (CSR). The shift towards carbon reduction will not only have a positive impact on brand reputation but will also make it easier for companies to recruit and retain a talented team.
Cut costs and reduce your carbon footprint with technology rentals
Is your event production company looking to reduce costs during these times of inflation and high gas prices? Not only are technology rentals a great way to obtain temporary technology at an affordable rate, but it’s also a great way to reduce your carbon footprint.
With suppliers in every major city (and many, many smaller cities) in the country, Rentacomputer.com provides an opportunity for your company to reduce its carbon footprint. Not only will you save fuel costs associated with transporting your equipment or getting it shipped from a distant supplier, but you’ll also have peace of mind in knowing your carbon footprint is greatly reduced due to the number of suppliers and installers that are available to us in close proximity to your event venue.
Are you looking for a one-stop technology delivery directly to your business or convention center? Rentacomputer.com has the perfect solutions for events of all shapes and sizes.
We will help you create a custom rental package tailored to your unique necessities. With a technology rental from Rentacomputer.com, everything will be taken care of for you: from recommending and reserving equipment, to delivery and installation, and even troubleshooting and extra equipment.
Rentacomputer.com has a large stock of equipment ready to deliver including, but not limited to temperature screening, sanitizing equipment, laptops, desktop computers, servers, tablets, smartphones, WiFi hotspots, Audio Visual equipment, and more. Not only can we deliver your rentals, but we also offer custom configuration and setup, so you know everything is in working order before, during, and after your event.
Furthermore, our account manager Randy can answer any questions you have about technology rentals–for any crowd volume, in any venue. Contact Randy today at 1-800-736-8772 ext. 225 or fill out a quick, easy online quote form.