How sports, leisure, convention industries cope with inflation, labor costs

How sports, leisure, convention industries cope with inflation, labor costs

woman standing by table talking to man in chair

Christina Estes/KJZZ

The International Association of Facility Managers held its annual conference in Phoenix in July 2022.

The International Association of Facility Managers recently held its annual conference at the Phoenix Convention Center. Much conversation has focused on how the events and meetings industry is coping with high inflation and low staffing.

The industry as a whole has returned about 70% to pre-Covid attendance levels. But the prices are not. Kate Christensen runs a Chandler-based event planning business. Companies call her to find a place and arrange everything.

She told conference attendees that prices are driving some down: “For example, a resort here in Phoenix is ​​now charging $10.50 for a bottle of water, a regular small 16-ounce water, plus, plus.”

Plus, plus refers to taxes and gratuities.

“And that plus at that particular resort is 24 percent,” Christensen said.

So that $10.50 bottle of water actually costs $13.02. To find savings, some events may cut back on service during breaks and instead offer self-pay drink and snack carts.

Christensen might consider packed lunches, buffets, or talking directly to the chef: “And look at how we can plan our meals, which maybe won’t be significantly less, but a few dollars off the plate of a group of 500 people makes a difference .”

three people sitting at the booth and one man standing having a discussion

Christina Estes/KJZZ

Panel discussion on changes in food and beverage at the International Venue Managers Association Annual Conference in Phoenix July 2022.

“It’s labor engineering too, isn’t it. That’s the big savings,” said Greg Fender, executive vice president of Sodexo Live, a venue concessions company.

He said the sports and leisure sector was doing around 70% of business before the pandemic – not enough to support higher labor costs.

“It’s on all levels. It’s on the parking side, it’s on the cleaners, it’s on the food side,” he said. “Every single one of those numbers has gone up, not down. And it’s not a 10% increase, it’s not 20%, it’s 30 and more.”

It’s not just an entry-level or temp staff problem, it’s in middle management,” said Michael Hughes, managing director of Access intelligence LLC.

His research found that almost 80% of convention center managers report that recruiting is very or extremely challenging.

“I think it’s partly about working from home that you’re competing with groups that allow telecommuting,” Hughes said. “I think that’s the biggest problem in the industry. I think that will be the long-term challenge.”

“I think that’s going to be the long-term challenge.”
— Michael Hughes, Access Intelligence LLC

During two sessions I attended, there was no mention of the impact of COVID on staffing levels or employee concerns. But that was a concern for conference organizers. They required attendees to show proof of a negative COVID test. Not everyone could, and panels were quickly reduced or replacements added.

“The guy on our team that was supposed to be here was coming from Canada, he has COVID, he wasn’t able to get in,” Fender said.

Masks were mandatory – or should have been. During my visit, most of the speakers, exhibitors and guests were without masks. In one session I counted less than ten people out of 70 wearing masks.

Andrea Smalls did. She is the director of operations for the Georgia International Convention Center.

“Our job is to gather, is to help people gather,” she said. “To be able to get back into our venues and get people back into our venues, that’s amazing.”

woman smiling at the camera

Christina Estes/KJZZ

Andrea Smalls, director of events at the Georgia International Convention Center, took off her mask to take this photo in July 2022.

During the conference, Maricopa County experienced high rates of transmission, prompting the Centers for Disease Control and Prevention to recommend that people wear masks indoors.

“If that means I have to wear a mask, let me wear a mask and I want to be a leader in this movement. This is not a political statement. It’s a health declaration, it’s a business declaration. I want us to stay in business,” Smalls said.

COVID has indeed led to some positive changes, according to Daniel Lazor, vice president of Aramark’s western region. Her company handles food and beverage operations at stadiums, arenas and convention centers in the U.S., including Phoenix.

“We really doubled down on the technology,” Lazor said.

Depending on the location and the technology — self-checkout, scan and go, mobile ordering through apps — she said service can be 50 percent faster.

“But we’re not seeing those labor savings yet because we just have to have more labor in the back of the house preparing the food to be able to deliver at a different ratio at the point of sale,” Lazor said.

She and Fender said supply chain and cost disruptions have created opportunities for local businesses.

“The distribution lines are completely broken, and so we’ve really had to look high, wide and deep for new partnerships, and a lot of them are coming from the local community,” Lazor said.

“I think in the past, national products or larger scale products were cheaper to ship, and as everything else gets more expensive between gas and shipping and labor, those cost advantages are less and you’re driven even economically on the local market,” Fender said.

showing the seats in the exhibition hall

Christina Estes/KJZZ

Several exhibitors showcased venue options at the Venue Managers International Association conference in Phoenix in July 2022.

While venues and markets differ, Hughes shared a forecast for the overall convention center industry: “I really think the next 12 months are absolutely critical. I mean, if there are other waves and so on, or if we can’t break through the 80-90% attendance recovery, then I’d be more concerned, but I’m in the positive camp like I said.”

Based on his surveys of convention center managers and event producers, most expect a full recovery by late 2023 or early 2024 … that would be four years since the first confirmed case of COVID-19 in the US

More stories from KJZZ

people talking next to the display in the exhibition hall

Christina Estes/KJZZ

The International Association of Facility Managers held its annual conference in Phoenix in July 2022.

a poster board says masks are required at the door as an unmasked man walks by

Christina Estes/KJZZ

Entrance to the exhibit hall at the International Association of Venue Managers Conference in Phoenix July 2022.

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