Thursday Dec 12, 2024
Thursday Dec 12, 2024
Monday, 31 August 2020 00:00 - - {{hitsCtrl.values.hits}}
Roshan Wijeyaratne
On its road to development, a country faces various obstacles at different periods of time. A prolonged war, a tsunami, a terrorist attack last year, and today, a pandemic that has adversely affected the whole world. But Sri Lankans are a resilient people. Just a small nudge in the right direction, and we are back, up and running. Today, in the face of COVID-19, that nudge comes from the Sri Lanka Institute of Marketing with ‘Restart Sri Lanka’. This is the third discussion of the series that is meant to give that much needed boost.
The event management industry is an avenue that can have a large impact on the mental well-being of a population that has to overcome adversity. But at a time when the ‘mood fixer ’ is in a glum mood, how can it fix the mood of the country?
Speaking out in this episode is Roshan Wijeyaratne, Founder and Managing Director of Events Production Ltd., one of the biggest event management companies in the country. He is a man who has worn many hats in a career spanning four decades. A graduate from Claremount Hotel School with a Diploma in Hotel Management, he moved into the tea industry, taking on a managerial position in one of the largest state owned plantation companies. He also took on the world through the ornamental fish industry before he moved into full time entertainment marketing events in 1990, working with London Actis Company, Klass Promotions.
He was responsible in organising and managing massive events and concerts with the likes of Richard Clayderman, the Wailers, Jessie Elvis, Michael Bolton, Kool and the Gang, Olivia Newton John, the Colonial Cousins and many others. Since founding Events Productions, he has produced over 5,000 corporate and entertainment events for local and foreign companies. With 30 years of experience in the entertainment and events industry, he is the current president of the Event Management Association of Sri Lanka.
Following are excerpts:
Q: The events management industry is responsible for providing entertainment when something hits the country. So what happened last year, and what happened this year? Where did you see yourself then and now as an industry?
Our industry has gone through three severe hits in the past 15 months. It initially started with the political unrest, which we had towards the end of 2018 going into 2019. We lost a lot of work because corporates were not willing to spend due to uncertainty and things were put on hold. But by February, we picked up and we looked forward to recovering what we lost because usually by March we have the financial year end events.
By the time the Easter Sunday bombings happened, we had many bookings. But following this, we ran for about four to five months without any work, but we still sustained the business. We kept our staff with us, we didn’t ask for any bank facilities or any support from the government. Then the events started to pick up, but we were not making any money, because with what the industry went through, we were all playing the survival game. We didn’t have a pricing structure or an association at that time. The Event Management Association was formed right after this.
This year was to be the year we recover the severe losses we had, but we only survived until March. Surviving three such blows is impossible for any industry. We can’t go to the banks, there is no work and we have run through all our resources. We are currently trying to figure out how we can move forward. The government came up with a two-month working capital, which doesn’t work for our industry. Now it’s been a few months since the promise was made but no one has received it yet. Only some of the companies have got approval. In order to get a loan, you need collateral and most of us in the industry don’t have that.
Q: COVID-19 being a virus, people are afraid to go out, there are travel bans around the world. Has this time had a graver impact than before?
Definitely. There are companies that come to Sri Lanka for MICE events. There are many companies that bring their staff or clients to Sri Lanka for their conferences, award ceremonies and incentive tours. This group ranges from 50 pax to 900 pax. They are usually here for four days, so you have a welcome dinner, awards, product launches, gala dinners, and beach parties. This is a massive industry. There is definitely a piece of that cake that we can get for Sri Lanka because we are an ideal destination for MICE events. For example, India was looking at about two million outbound incentive tourists. Without any travel, we are unable to facilitate it. Globally, if you look at our industry in 2018 it was a 1,100-billion-dollar industry.
Q: Many don’t understand what event management involves; how big is the industry, how many are employed, what does it take to organise an event. Can you explain?
We have started to collect figures of the industry only now. With the entertainment industry, there is a total of about 100,000 dependents. Most see just the event management company staff. But if you take a company, we also have lighting and sound technicians, carpenters, graphic designers and drivers. We have staff at every level. Most often people only see a group of about five or six behind the controls at an event. But about 20 to 25 people have been working on the set up the night before. So if you are to put a value, this is about a Rs. 30 billion industry. People assume that an event is a stage, lights, sounds and some entertainment acts.
Usually an event plan begins at least three months prior. For example, a lot of people think that a product launch is about having entertainment items from start to finish. The company spends 10 to 20 million, including hotel charges for an event like that. What the guests remember is the song and dance, not the product. This is where event companies are important; to conceptualise your event, to plan it, position your product, not to use entertainment that will over power the product, and for guests to remember the product when they go home. So it’s not the case of putting up five people on stage, it is a lot of planning. You need to profile your invitees, what level of entertainment suits you, and even to the extent of planning food.
Q: You pointed out that last year, the industry survived without pay cuts or layoffs. But how is it faring this year? What is your opinion about the way the industry is handling it?
In my operation, I have staff who has been with me for 20+ years, a majority of them being with me for over 10 years. In March and April, we were able to pay salaries but come May, we had to reconsider things. I could go for a pay cut, but then what about the months to come? We saw that we were not going to have an income for the next 6-10 months. You also don’t have banks coming to your rescue because of many not having collateral and even if you had, they were giving only two months working capital. I discussed with my finance team and it was difficult to tell my staff that I couldn’t pay them. How will they survive the next 6-10 months? So I visited each of my employees during curfew and explained to them that the company is not going to be able to keep paying their salaries for the next 10 months without any income. Our priority was our staff and even though we were risking loosing some of them we offered them their gratuity payments if they wanted to resign. With that they are able to either start a small business or survive for the next 10 months.
It was better than not giving them any pay or cutting their salaries by 50% or sending them on no pay. I was not just thinking about the company but making sure that those who have been a part of our team could sustain themselves. It was a lot of money that I had to put across, I had to put my personal finances in, took loans that I could from banks, and paid my staff. So there were some who got up to a million rupees. They have actually started small ventures with that already.
They were grateful with that option. We even gave it to those who were not entitled to it. For someone who had worked for 2½ years, we worked out gratuity for three years. So every single person got a lump sum to survive for the next few months. And we told them that when we start physical events again, we want them back. I have also given them the freedom to accept any other opportunity as well. This worked for my operation, it might not work for everyone.
We have companies who were unable to pay from April. They had to send their staff on no pay leave, some had to send temporary staff home without any payment and some had to take pay cuts. I know they can go on for 2-3 months, but how do you go beyond that when you don’t have any events happening? We have looked at various other options of income but it is not going to sustain your staff. Many companies are looking at online platforms with virtual events but there is no comparison in terms of the revenue it brings in with a physical event. However, this is just short term, we are going to bounce back. Events are going to come back for sure.
Q: It matters that you care for your team, and you consider them as part of your enterprise, and that is something we didn’t see with a lot of companies. We saw companies holding on to the higher management and letting go of the lower end. Taking a 50% pay cut is not the same for a person in the lower end of the ladder as opposed to someone in the higher end. How did you manage this?
My company has two Directors, my son and I. Since March, we have taken a 100% pay cut. We both have zero income. All expenses of the company at the moment are borne by me, because the company has run through all our resources after the Easter Sunday bombs. But we have our commitments; our leases, our rents to pay, but we wanted to take care of our staff first, especially the lower level guys. To give an example, in one house I visited, there was a young guy with an infant child, who said he had his last thousand rupees, and he got close to a Rs. 100,000. He was thrilled, because with that money he could go on for a couple of months. There were people from the labour level who got 300,000-400,000, something they had never got before.
Q: In this situation, how can you continue as an industry? How do we go forward?
We have many small companies who have invested on equipment. They find it really hard to survive. We have had discussions with the government, the Ministry of Health and obtained permission to conduct events with limited numbers. We can accommodate 50% in a venue. So we see that weddings have started, which means sound, lights, wedding decorations come to play. So business has started to flow in gradually. But we should also look at how we can work together within the industry. Until now, each one of us has been doing our own thing. But if we are to survive as an industry, we should all come together. The bigger companies can consider not importing equipment, but utilising the inventory we have in Sri Lanka already, thereby giving business to other suppliers and helping them to sustain.
With the Event Management Association, for the first time in history, we have arrived at this cooperation.
Q: The Association was formed after the Easter bombing last year. Was this the objective of it from inception?
Yes. One problem we had was that some were offering services for low prices, purely to survive. Since this is detrimental to the industry in the long run, we wanted to look at bringing certain standards to the industry. Standards don’t mean mere pricing structures, it also entails things like quality improvement and safety standards. We are not an industry that caters to only local companies any more. We do international level events. We have to be specific about our safety standards, accountability, training of staff in terms of light, sound and sets. We want to conduct workshops. The basic idea is also to support the smaller companies.
One issue with our industry is that when you invest on equipment, before you recover the cost, the technology changes. For example, those days we bought a P6 LED screen. Before I could recover the cost, the P4 came out, followed by the P3. So you’re not recovering your money on equipment. What we charge is low, so our margins are not enough to recover within a short term. Therefore, right now it is basically about us trying to work together, supporting everyone in the industry. Corporates should also look at that.
There are multinationals who have 200-300 million advertising budgets. Don’t work with just one event company. For instance, don’t work only with me, because then you’re channeling your total budget towards my company only. Yes, my 20 to 30 staff will benefit, but we have another 100,000 people out there. So spread your money out. If you have a 200 million budget for events, spread it across 10 companies. Give the activation part to one company, events to another, audio and video recording to yet another. Then at the end of the day, these people also become your clients. If you’re a multinational and in FMCG, whether it’s your toothpaste, or soap, they will buy it. If they don’t have an income, they can’t buy your product.
Q: So whose responsibility is that? Should the client take that decision, or could it be your responsibility as the association to disperse the income?
Ideally the client. What they should look at is, if they have 20 brands, they have 20 product launches for the year, let’s give it to 10 companies, so that more people benefit.
Q: Such a call for action would be a revenue loss to your company. Are you looking at it from the point of view as the president of the association?
We need to sustain. This pandemic is a worldwide thing. It’s going to take a while for things to get back to normal. We are going to bounce back, but it’s not a time for us to think of just ourselves, our company and us making money. We’re a small country, we’re islanders. We need to learn to co-exist and help each other. We need to see how we can grow together because we are fighting COVID-19 extremely well. As far as what we can see, it’s under control in Sri Lanka.
Q: All these that you referred to were probably part of your initial idea when you formed the association last year. But once things got back to normal, and you started getting events, this was forgotten. People started to go back to the old ways of under-cutting and taking jobs for lower budgets. So, what now? Do you think they’ll go back to that, or will people actually come together and work together?
With the three hits we’ve taken, I think we are going to work together. I can see the enthusiasm amongst the members wanting to do things, coming up with suggestions. This is just a start. We began our membership only in January this year after getting the final approval from the registrar of companies. Therefore, the association has legally been there only for about six months. We will definitely be together and move forward. There is so much unity now. We need the support of the government at this stage.
Entertainment is something that is definitely needed, to avoid people being frustrated and going into depression. But if you are to organise a musical show, the municipal councils charge a certain percentage. So it’s not feasible for us to organise an event because we’re paying the entertainment tax and on top of that many other taxes, and companies are not going to invest money as sponsorships at present.
So the government needs to help us to get this industry back on its feet. It’s not just the event companies; it’s the bands, DJs, dancers. When you put all that together, it’s a massive industry.
We know that we can definitely Restart Sri Lanka. Every industry has to come together, put our differences aside, unite and we can move forward as a country.
