The consequences of Covid-19 for the events industry

The risks of spreading Coronavirus has forced Dutch authorities to take the necessary safety precautions in ensuring public health. One of the most far-reaching provisions has been the cancellation of events requiring a permit until 1 September. This decision not only has a substantial impact on those event organizers who have seen their plans cancelled so far, and on their suppliers, it offers little perspective for the future. As the rules currently in place require a 1.5-meter distance to be maintained between individuals, and thus far no certainty regarding the duration of these rules has been revealed, no further steps can be taken in the preparation of any events. The policies that have been implemented by the Dutch government will have an effect on the economy that is far greater than one would expect at first glance. The events industry is one of the most visible parties to experience this impact.

Some of the major events that have been cancelled include the Eurovision Song Festival that was to take place in Rotterdam, as well as other music festivals like Pinkpop, Lowlands and Defqon, with the latter attracting circa 60,000 visitors from all over the world. The International Four Days’ March’, a traditional Dutch hiking event in Nijmegen, is cancelled too. The last edition of this event hosted approximately 44,000 participants, promoting exercise and bringing together people of all ages. These kinds of events are crucial in keeping spirits high, but as of now that is the least of our worries.

As the festival season comes crumbling down and the weather keeps improving, disappointed customers want more certainty about the degree of compensation they can expect. Initially the thought of postponing events until after the upheaval of these regulations seemed the most logical option. However, as organizers still do not know what the future regulations will be, the risk is too high to resume preparations. Some have already announced a new date in the autumn or winter, like the Rotterdam Marathon, now set for 24 October, but there is no way of knowing that the event can actually take place.

Moreover, cancellation insurance generally does not cover terminations for a pandemic outbreak. From a legal standpoint the situation is rather complicated. In the case of a ‘voluntary’ cancellation, the event organizers run the risk of being ineligible for reimbursement. Hence, material suppliers and disappointed ticket buyers will be unable to invoke the force majeure clause by which to can get their money back. Forced cancellation, due to the regulations still being in place on the date of the event, will mean that the insurance should take over these costs. These laws lead to further obstacles for insurance companies. Compensating the organizers of all events scheduled before 1 September, but perhaps even longer, is beyond the means of many insurance companies. In an attempt to limit the blow, the Dutch government may eventually proceed to divide costs the amongst all parties, but as of now this remains unsure. In any case, such a decision may be enough to bankrupt many businesses in the events industry, especially combined with the loss of income from the cancelled events.

Large international events in music, sports and even business demand the presence of people coming from abroad. The fact that the closing of borders currently restricts flights departing or entering the Netherlands, with this precaution expected to remain in place for some time, the prospects for these kinds of events are not looking promising. If athletes, artists, keynote speakers are absent for the event, this will cause a substantial decrease in visitors and consequently in profits. Since every situation is different, the government is struggling to find the best temporary solution to safeguard people’s initiatives and businesses.

The unforeseen nature and growth of this pandemic has affected the entire world in ways no one previously expected and the uncertainty of the situation undeniably influences all relevant parties, including the events industry. Understandably, people are disappointed and fearful of what the future will bring. Since events are one of the most dangerous occasions for the rapid spread of infection amongst the attending crowd, it looks as though this will be a relevant topic for a while, even after current policies will be relaxed. Patience and understanding are the only way forward, as people in all industries struggle to keep their heads afloat. When will seeing your favorite musician in the flesh or drinking a cold beer at the yearly festival be feasible again? At this moment in time, no one has the answer and only time will tell.

Written by Charlotte Seijger