There are large variations in the effects. Sports activities survived with less damage.
Business according to a study by the research institute (Etla), the corona crisis and corona restrictions have severely eroded the profitability of the event industry. The sector’s total turnover in Finland fell by more than a fifth and profitability fell by 65 per cent.
Last year, half of the companies that continued in the sector gained only a quarter of the previous year’s result.
However, Etla’s study “The Role of the Event Sector in the Finnish Economy” only concerns companies that have continued in the sector, so the effects of the coronary crisis on the sector are likely to be even greater than estimated, says the research director who made the report. Jyrki Ali-Yrkkö and the researcher Mika Pajarinen. Closed companies were not included in the comparison.
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In 2019, the event industry generated at least 1.2 per cent of Finland’s GDP. Nearly 10,000 companies in the sector employed 15-20,000 people. The share of employment in the corporate sector was in the order of 1% and slightly below value added.
The corona pandemic caused a severe blow to the industry. Concerts, theaters, sporting events, conferences and fairs were subject to restrictions, and people avoided gatherings on their own initiative.
It is difficult to get an accurate picture of the importance of the national economy because of the wide range of actors in the sector. At least half of the value added and employment in the event industry comes from organizations other than for-profit companies.
The coronary crisis however, the effects of restrictions have not hit the whole sector in the same way. 72% of companies in the sector saw their profitability decline. On the other hand, almost a third of the companies were able to maintain their profitability in 2019 and some even increased it slightly.
“It would seem that in the interest rate crisis, companies in the sector have not been able to reduce their costs in proportion to the decline in turnover. The possible financial subsidies and other cost subsidies provided by the state have not fully compensated for the decline in demand in the interest rate crisis, ”says research director Ali-Yrkkö in the press release.
There are differences between the different sectors, and the organizers, program offices and managerial services of trade fairs and congresses were very hard hit. Booking services and sports activities survived with less damage.