I can’t speak for everyone in the event rental industry but 2020 has been a hard year, #amiright?
Some of our clients have seen an 80% decrease in revenue. Others have closed up shop. Some are pivoting to home staging or other lines of business since live events won’t be allowed in their regions anytime soon. And still others are having 350 people weddings every weekend and are looking at the highest profitability they’ve ever seen. Weird times.
Before I answered this client’s question, I wanted to dive into the data. I’ve had the same sense that things are slowly getting better for event rental businesses but I always want to verify my assumptions with numbers. Thankfully, because I get to see aggregate data from our users across the industry and around the world, I have a picture of what’s really going on.
Our best indicator of the “health” of the industry in general is our credit card processing data. While it isn’t a pure number (because people could be encouraging clients to pay by check, it may not be in line with the trends overall, and is dependent on our overall number of users), it is the closest thing I have, short of surveying people. And traditionally when I’ve surveyed people, I get a variety of accuracy in responses so credit card processing is the best data source.
It is most helpful to look at the total value of all of the credit card processing for each month over the last three years. You can see that there is a bit of seasonality to the numbers (with October traditionally being the highest). But 2020 deviated significantly from the trend.
In 2020, the lowest month of credit card processing was April. All other data points on this graph are relative to that month. For instance, January 2020 had four times more revenue than April 2020. The lowest month in 2019, January, had 2.81x April 2020’s numbers.
To put all this in context, if April 2020 had $500,000* in Credit Card Payments, that would mean January 2020 was $1.96M and January 2019 was $1.4M.
Since our low in April 2020, there has been a steady climb in the total dollar amount being processed through RW. By the end of Q3 2020, in September, we were back up to 3.24x of our April 2020 low number (or roughly equivalent to July 2019 numbers).
The numbers are definitely trending up.
So, there is reason to hope. 🙂
However, the data is showing a much lower average transaction amount (larger number of transactions for every dollar generated). That means you’re likely working harder than ever before for the money you’re earning in your event rental business.
We’ll keep looking at the data and let you know if we see other trends or wayward numbers that tell a different story as 2020 closes out.
But in the meantime, please know that we have been so proud to be part of this industry. We always have been. But we are especially this year as we’ve seen your resilience, your creativity (in problem-solving, not just in aesthetics), and the adaptability you’ve demonstrated. You are still creating beautiful spaces, beautiful companies, and beautiful culture. We are humbled and thrilled to be part of it even on this bumpy ride.
*We’ve used fabricated numbers here for simplified math in our example.