State of the event rental industry
By Brock Huffstutler Connie Lannan and Brock Huffstutler
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State of the event rental industry

Even before factoring in the potential positive impact of infrastructure spending, the American Rental Association (ARA) was forecasting a record year for equipment rental revenue in 2022. At the same time, event rental companies are expecting continued growth in revenues after taking a huge hit due to the impact of the coronavirus (COVID-19) in 2020.

While revenues are likely to outperform the peaks reached in 2019, the business for each segment has been altered. Technology is playing a greater role as labor shortages mean companies need to be more creative to meet demand. The segments have some common issues, but there also are significant differences in how they are handling customer demand, finding employees and dealing with supply chain problems.

To better understand the state of the industry, Rental Management spoke to several industry leaders about how they are pivoting and coping with the new challenges they are facing in 2022, which are outlined in the following articles focused on event rental.

 

Big business poses big challenges

Event rental operators poised to break out in 2022

Following the pandemic-fueled roller coaster ride that event rental companies experienced in 2020 and 2021, most are expecting big business in 2022 and already are penciling in dates for 2023.

“I think it’s going to be a good spring. There is still a bunch of pent-up demand that never got released,” says Kyle Tegner, CERP, president, Special Occasions, Corvallis, Ore., and an ARA of Oregon board member.

Gina Glas, CERP, co-owner, A Classic Party Rental, Indianapolis, who serves as the ARA of Indiana treasurer, agrees, referencing publications suggesting that weddings, in particular, are primed for a big year. “Articles in the Wall Street Journal and TheKnot.com are projecting a high wedding volume,” she says.

“Our colleagues — local florists and caterers — are talking that they are bracing for a record year,” says Jennifer Rodriguez, CERP, general manager, Marianne’s Rentals, Oklahoma City, who serves as ARA of Oklahoma secretary.

Even as signs indicate that 2022 will be a barnburner, key event rental players have identified some stubborn hurdles that are casting uncertainty into the forecast. All are working hard to find solutions to the challenges at their doorsteps.

Quick turnaround demands

Heavy bookings in the new year will mean having to turn inventory around quicker than ever. Some of the ways event rental operators are managing the strain include:

Adjusting internal processes. “We are going to change our process slightly within our software in the way we delay availability,” Glas says. “Right now, we have no delay availability on our equipment. We don’t have time to clean and flip. We will increase the time to 24 hours, which will allow our operations team to clean and prepare equipment for the following day, instead of the next day.”

Eliminating same-day orders on most items. “Unless it is tables and chairs, I am not taking any more same-day orders,” Rodriguez says. “Our warehouse is overwhelmed. They can’t get tomorrow’s orders prepped and out the door because they are being interrupted with same-day orders. We have been trying to train our planners, and we have notified people on email, social media, etc., that you have to get your order in by 3 p.m. the day before you need it.”

Managing delivery expectations. “We’ve added a delivery calendar to our website. This allows our customers to check on delivery slot availability,” says Delores Crum, CERP, president, Premiere Events and Party Time Rentals, Austin, Texas, and the American Rental Association (ARA) Event Rental Shared Interest Group chair.

Increasing prices to accommodate special requests from overbooked venues. “Venues are making up for lost time,” says Robert Copley, CERP, sales manager, Event Essentials, Windsor, Wis., who serves as ARA of Wisconsin president. “We have noticed an uptick in demand from venues for specific time requests and late-night pickups. This has been a challenge because we need those crews the next morning. We have had to increase our pricing to accommodate those requests.”

Coping with reduced staff

“If we had the labor, we could do more weddings every day of the week. Getting from point A to point B is becoming increasingly difficult without labor,” says Dan Hooks, CERP, president and CEO, Party Reflections, Charlotte, N.C., who also serves as ARA president.

Here are ways some event rental operators are managing this shared dilemma:

Dropping the instinct to respond immediately. “We put a ‘permanent away message’ on our outboxes that advises customers they will receive a response within the next business day. This gives us a little more leeway in getting back to our customers with information, revisions, and quote and order requests when we’re slammed,” Crum says.

Using a hospitality-focused temp agency. “We are using Upshift — a new, technologically based temp agency for hospitality. We have had about 30 employees come in for a day, four hours a day or for a week. They understand dishwashing and linen processing. It has been helpful,” says John Bibbo, CERP, president, Event Source/Panache Events, based in Cleveland.

Increasing prices to cover overtime. “This past year we did a lot of overtime. We have increased our [team’s] pay and prices for our equipment,” Copley says.

Cross training employees. “We always have been a company that cross-trains,” Rodriguez says. “Our culture is that wherever the need is, that is where we put our teams.”

Utilizing foreign national employees through the U.S. H-2B program. “The labor situation is dire, but we are hopeful that we may be able to get our H-2B workers in April,” says Mike Fitzwater, general manager, Special Events Entertainment, Portsmouth, Va., and ARA Region Two director.

Supply chain delays

Tie-ups in the supply chain are a major concern for equipment rental companies, and the event segment is feeling the pinch, too. Event rental operators are responding in a variety of ways, including:

Renting/leasing trucks. “It’s hitting us on trucks, No. 1,” Hooks says. “We were scheduled to buy four new trucks this year. Lord knows when they are going to get here — we’ve been told the first quarter of 2023. Unless something happens in the supply chain to speed that up, we’re going to hold onto some older trucks for a while, and we’re going to have to rent a few more trucks between now and next season to get through.”

Requiring secondary inventory selections. “If I am buying something and it is backordered, we ask our customers to pick a secondary product that is in stock as a backup. We are normally 12 to 16 weeks out when we have to order a product. Now we are telling them that we don’t know if 12 to 16 weeks’ time will be enough, so let’s plan with a backup plan in mind,” Rodriguez says.

Keeping it in perspective. “The No. 1 rule is: ‘What you have is not what your customer wants, and what your customer wants is not what you have.’ No. 2 is: ‘If you have what your customer wants, they all want it at the same time.’ There are always inventory shortages. I am not losing any sleep over this one,” Crum says.

Knowing when to say “no”

The no-win combination of inadequate labor and high demand has meant that many event rental operators have had to turn away business. Here is how some are coping:

Being selective when choosing jobs. “The world has changed, and event rental companies cannot keep up with the demand. In order to thrive, we must focus on our larger-margin business and cut out any marginally profitable jobs,” Fitzwater says.

Cutting off prime dates at a certain point. “We cut off certain prime dates once we get to a certain point of booking, so we do not overextend ourselves,” says Cyndi Shifrel, CERP, CEO, Orlando Wedding & Party Rentals, Lake Mary, Fla., and an ARA of Florida board member.

Referrals to competitors. “We play friendly to support the general industry,” Tegner says. “We have had that conversation with those [competing] businesses and we know they’re probably in the same boat, too.”

Corporate events are a black hole

Corporate events represent a sizable chunk of business for many event rental companies. A major issue is the uncertainty over the direction the coronavirus (COVID-19) variants will take, resulting in a continued pause for corporate events. While there are no clear solutions to filling this gap, some are simply approaching the situation pragmatically, appreciating the alternative jobs that have sprung up and taking a wait-and-see approach.

Accentuating the positives of the healthy wedding market. “Corporate events are important to our business model,” Glas says. “When corporate business is still down significantly and it is a majority of your business, you are not back to normal. The uptick in weddings will be great, but it won’t put us back to normal yet.”

Working around gathering restrictions where able. “Corporate is nowhere near back yet. We have had some corporate parties if they are outside,” Bibbo says.

Maintaining long-term rentals. “We have a lot of equipment out on long-term rental, and that’s going to continue. For instance, our private school and university systems are the ones that we have the most out for — through May. COVID is still keeping corporate clients from making decisions. But if corporate does come back, it’s going to be really challenging to do the social and the corporate events if long-term rentals are still in the air,” Hooks says.

 
 

Brock Huffstutler

Brock HuffstutlerBrock Huffstutler

Brock Huffstutler is the regional news editor for Rental Management. He writes and edits articles for ARA’s In Your Region quarterly regional newsletters, Rental Management, Rental Pulse and other special projects. Outside of work, he enjoys biking and spending time at the few remaining vintage record stores in the region.

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