Business Opinion

Is COVID-19 the harbinger of death for event companies?

If there is one topic to discuss that event organizers can agree upon, it is the disruption that’s caused by the current crisis. In less than a year, it has made sweeping changes in the landscape of the events industry. This is evident from the massive number of events either put on hold or cancelled. Ironically, social distancing has become the new norm, in contrast to social gatherings that events are basically created for.

As per the industry specialists, the Maldivian event management sector compromises of more than 21 companies employing a total of 128 staff in various areas of work, of which 103 are Maldivian. The sector pays over MVR 59.12 million annually as staff salaries and pays rent of over MVR 18 million per for office and godown spaces.

These companies have managed to build a name in the industry by going through a lot of hurdles. They have always faced struggles in either to get venues or with the lack of funding and support from the government. On top of that they had to compete against government organizations like SIFCO who takes over fireworks and inaugural events and MACL, who purchase their own sound and light for events.

No event has been held in these past 2 months and there is a high possibility that it will continue as such for at least the next 6 months. In this time of uncertainty, event organizers need to effectively manage and fulfil financial responsibilities and reduce any financial risks at the absolute minimum.

The local event companies invest millions in world-class equipment. They have continuously proved to have the calibre to cater to top tier artists and huge international corporations with their events either internationally or at the world-class resorts in the Maldives. However, with no source of income, the event production sector has no way of paying rent for their warehouses or offices. This bulky equipment cannot be sold off or relocated in these precarious times. In addition to this, the owners are struggling to protect the salaries of their employees as well.

The event management SME’s enjoy a sizeable revenue from high-end resorts which has come to a complete standstill at this juncture. In addition, major companies are making drastic and desperate measures to keep their companies afloat during this uncertainty.

The government has introduced a stimulus package of MVR 2.5 Billion including loans for SMEs. This includes MVR 1.55 Billion for SMEs to meet short-term working capital needs. This may help these event management companies to survive the pandemic. However, they will require more financial assistance to stand throughout the recession.

Along with the COVID-19 pandemic, event management companies to are fighting another battle – survival. In order to reach the surface, the government has to intervene, quickly. Apart from financial assistance, the industry further needs support and direction from a national level.

Full details are available at the link below:

Source URL: Corporate Maldives

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