Hire? Lower!

When we came up with a liltingly alliterative term for the subprime mortgages crisis – the credit crunch – we could blame it for anything, even when we don’t understand what it is. Essentially, the banks won’t give any loans and want to play it safe. Does spending at arts venues increase during this time or is it thrown aside with the mange tout, the latest fashions and the LCD TVs? Kate Sarley, Chief Executive Officer of Jacksons Lane (a multi-arts venue in London), says, “We haven’t noticed any particular difference – managing an arts venue is always hard.” So is the credit crunch a handy scapegoat for a struggling sector? “Once there was a perception that there was a financial problem, it became a problem”, says Sarley, adding that West End companies have lately been attracted to Jacksons Lane “whereas they would previously have gone to more pricy centre-of-town venues”. On the flip side, Charles McKenzie, Head of Business Development at North London’s gleaming Artsdepot says that “spaces in the centre of town have been offering discounts and the big companies have been attracted to them. We’ve found that we’re down about 15% on what we were expecting.” McKenzie confirms what we at the Albany have also found – that whilst we have the same volume of bookings, the profit margin has lowered due to the amount of discounts being offered to attract clients.

MAKING THE STRETCH
It’s not just London venues which are suffering. Shelley Bishop, Events Manager of Bristol’s Watershed, confirms Conference Bristol’s findings that there have been 30% fewer conferences in 2009/10: “Bookings are coming in at shorter notice and those that do come in have fewer delegates.” She adds that “Clients need to make their budgets stretch. They’re shopping between venues for the best deals and asking for more reductions.” McKenzie confirms that “The regular bookers are cutting costs wherever they can… there is a lower spend on catering.”
Most venues have found that even though penury was a known factor by the end of 2008, the first quarter of 2008/09 reaped bumper profits. This is because the 2007/08 budgets of typical events clients were set before it had kicked in. Clients who hadn’t spent their 2007/08 budgets needed to finish their spend by the close of the period, even if the event wasn’t until the new financial year. Most of those hires happened between April and June 2008 and made it look as if 2008/09 was going to be a boom year. As it was, the excess in the first quarter was offset by poor performance in the following three quarters of the year. The worry is that, as clients’ 2008/09 budgets have been set in the midst of a slump, even when this recession ends, venues won’t see the benefit until the next financial year. Bishop confirms, “We have had more enquiries for 2010. This is because people will have spent their 2009/10 budgets and are looking to use next year’s spends.”

PASTURES NEW
So where do the new clients come from to fill the gap? Are they last year’s clients reborn? A strong starting point for finding new business is to look for clients with similar profiles to the ones who have booked before. McKenzie says that to try and balance the lower number of enquiries coming in, he is “looking not only for corporate clients, but also for corporate sponsorship”. He adds, “There has been an increase in bookings from community groups, council-run departments, schools and local groups.” As these kind of events usually sell out, maybe it’s a good idea to engage in box office splits with this kind of client. A good way to attract new clients is to get mentioned in a specialist publication, such as a market specialist magazine. And just as drugs companies give away free mugs to doctors to get them to plug their latest laxative, arts venues can give free tickets to potential clients. Reciprocation is an important part of decision making. If the venue gives out something first, the client will be more responsive to suggestions that they hire the space.
Another way to ride out the recession might be to diversify what a venue offers. Many venues define ‘events’ as being only conferences. But why not hire out the spaces to theatre companies, film makers and for classes, workshops and rehearsals? I have a feeling that the answer may be more simple. Maybe it’s that we need to be less amateur, in the best sense. We in the arts tend to do things for the love of the art and maybe we need to train ourselves to be harder-nosed professionals.