Mar 27 2020
Social distancing and the current outbreak of COVID-19 (coronavirus) in the United States is anticipated to disrupt most live events in 2020. Major events ranging from technology conferences to music festivals, such as Coachella and South by Southwest (SXSW), have been cancelled or postponed until further notice. As a result, IBISWorld estimates the Concert & Event Promotion industry (IBISWorld report 71133) to decline in 2020. Artists, performers and music fans are not the only ones feeling these negative effects. Many small concert promoters will likely be unable to stay afloat as concerts and events continue to be postponed due to social distancing restrictions. In turn, smaller operators more likely to be acquired by large industry moguls such as Live Nation and AEG Presents, which have the resources to survive drops in profit and revenue.
Furthermore, the Wedding Services industry (NN006) is anticipated to follow suit as consumers avoid large gatherings to avoid exposure to the virus. Recently, the Centers for Disease and Control Prevention (CDC) recommended that no more than 10 people gather at a time. Many couples have been losing their deposits, but the majority of vendors such as florists, caterers, insurance are being flexible. Still, the Wedding Services industry is anticipated to experience a decrease in demand in 2020. As the marriage rate is anticipated to remain stagnant and consumer spending is estimated to decrease 0.9% in 2020, consumers will likely reduce their personal budgets in the short term, decreasing overall expenditure on wedding services. Furthermore, the Bridal Stores industry (OD4222) is anticipated to experience a disruption in its supply chain. An estimated 80.0% of wedding dresses and materials come from China, where some factories have been temporarily shut down in order to prevent the spread of the virus.
Furthermore, major events such as weddings and concerts are typically planned up to nine months in advance. Cancellations and postponements could have potential losses in which some industry operators are not going to be able to survive; however, if operators decide to go on with the event, the likelihood of mass exposure is too large of a liability. Additionally, IBISWorld estimates that the number of domestic and international trips in 2020 will decrease, which could also exacerbate drops in revenue, as many consumers fly in specifically for such events. Although IBISWorld anticipates a slowdown in these industries in the short term, it is likely that most will be able to bounce back in the long term as such events are staples of American culture. Still, the influence of COVID-19 on the global economy remains uncertain. Since the aforementioned services are considered discretionary, lower income levels and consumer spending in the long run could adversely affect the industries’ performance over the next five years.
Edits by Sean Egan