Economic Issues and Challenges in the UK Event Industry: A Report

This report provides a comprehensive overview of the economic issues confronting the event industry, particularly within the United Kingdom. It delves into various challenges such as the impact of increasing taxes, changes in industry structure influenced by brand power and consumer loyalty, and the effects of inflation on event costs and consumer behavior. The report also examines the implications of exchange rate fluctuations on the industry, including their effect on international tourism and revenue generation. Furthermore, the analysis considers the impact of government regulations, consumer protection laws, and visa restrictions on event organization and the broader tourism sector. The report underscores the interconnectedness of economic factors and their profound influence on the viability and growth of the event industry, offering insights into the complexities faced by event organizers and businesses operating within this dynamic sector.

ECONOMIC ISSUES IN EVENT INDUSTRY

TABLE OF CONTENTS
Introduction..........................................................................................................................................3
Overview of event industry..............................................................................................................3
Current economic issues are faced event industry...........................................................................3
Increases in Tax................................................................................................................................4
Changes in industry structure...........................................................................................................5
Inflation............................................................................................................................................6
Exchange rate fluctuation.................................................................................................................6
Capital investments-.........................................................................................................................8
Conclusion............................................................................................................................................9
References..........................................................................................................................................10

INTRODUCTION
Economy of nation plays important role in event sector in the world. It helps this industry to
grow further in the country. It also contribute effective role in generating better growth for this
industry in United Kingdom (Boykoff and Olson, 2013). Mainly, this sector is major source for
nation to generate better revenue. Many event organisations and events help countries in generating
higher income which assist the nation to manage its government operations. The present file defines
overview of event industry and issues associated with it. In addition, it also states present economic
problems like taxation and inflation which is faced by companies in this industry. In the present
case, talent gap related issue which was faced by event industry was taken. In addition, it also states
present economic problems like taxation and inflation which is faced by companies in this industry.
In the present case, talent gap related issue which was faced by event industry was taken.
Overview of event industry
Generally United Kingdom is developed country in the world. This thing attracts more
people to come in this country. There are many ancient historical places which increases frequency
of visitors in the nation and organize events there (Leleivai, 2014). Events introduces in country has
increased as per comparison of previous years in United Kingdom. It plays important role to
enhance the business of this industry in the United Kingdom. This industry also integrates with
hotel sector which provides effective facility to consumers in the nation. As per WTTC (World
Travel and Tourism Council), it revealed records of percentage for employment which were
provided by UK government in 2013 during organizing many events (Du Plessis and Saayman,
2015). Mainly travel and tourism of UK generated 1 million jobs for its citizens. Generally, Britain
was ranked 8th as per economic ranks in the industry (Nanau, 2014). United Kingdom will be ranked
7th for travel and tourism sector till 2023 in the world and it was possible due to organize event in
successful manner. It is also contributed £58.4bn to UK GDP. This sector helped country in term of
increasing contribution. From the study, it is clear that in order to meet the growing number of
vacancies in the UK events sector, enterprises is facing different types of economic issues. It is
bigger than the contributions of activities like construction of buildings management consultancy,
legal and accounting services which were 2.2%, 2.4% as well as 2.1%, respectively (World Travel
and Tourism Council, 2013).
Current economic issues are faced event industry
There are many economic issues which are faced by event organized in UK in 2015-2016..
Some of them of are followed below the paragraph.
Changes in Legislation
The UK event industry has appeared as one of the key industries driving growth of the

services sector in UK. It has germinate into an industry that is delicate to the necessarily and desires
of people. The future of this industry has always been coupled up with the outlook of the present
industry (Rogers, 2013). The UK event industry has recorded healthy growth burning up by beefy
influx of abroad tourists. It has also increased tourist movement within the country and it has
become one of the star participant in the international industry.
Accordingly, millions of UK travellers visit overseas and attend this event. Holiday making
is the primary reason that UK residents travel abroad. The company trade with the both inbound and
outbound tourism. Changes in legislation bring about huge changes in event industry (Baylis, Wirtz,
and Gray, 2013). They are:
 Changes in UK rules and regulations-Legal factors have external impact on event
organizing firm and members associated with it and they include any changes in the UK
district that affect the event industry in direct and indirect ways. For example: Immigration
rules and operation of getting a UK visa becoming stricter have impact on event industry's
performance in UK in indirect ways (Duncan and Goddard, 2013). UK consumer protection rules and regulations - Moreover, event performance is directly
affected by consumer protection and employment laws in UK (Boykoff and Olson, 2013).
Changes in legislation such as consumer protection rules have also affected the nature of
competitive regulation, and risks of military invasion in the country.
 Restriction rules - there are many visa restriction rules in many countries such as the USA,
and in Australia for the international visitors and these countries plays important role in the
event industry. This in turn affects the hotel and tourism industries (Duncan and Goddard,
2013).
Legal issues such as government planning actions and taxation policy on aviation
fuel and VAT on air tickets, rail tickets affect the working of tourism and event industry.
Increases in Tax
Political factors affect the event industry in the form of taxation policies formulated by the
government. For example: decision regarding the increase in petrol prices and taxes over them has
affected the event sector which in turn affects the consumer demand in UK (Dhurup, 2012). The
impact of initiating tax on the hotel room prices mostly depend on demand price elasticity. If the
demand is sufficiently elastic, hotels will not be able to increase the room price and shift the taxes
on guests. On the other hand, they will have to bear it by themselves with reduction in the profit. If
the demand is inelastic, hotels will be able to gain the accommodation price and guests will have to
bear the newly introduced tax through increased accommodation price (Sadler, 2011). When there is

high price snap, for the hotel sector due to increased tax and non-tax burden, in final there will be a
huge reduction in the number of guests (Boykoff and Olson, 2013).
The World Tourism Organisation (WTO) cites that there is existence of much number of
taxes and fixed charge related to the event activity. These are for movement (visa fees, entry and
exit charge); air and ship conveyance (airfield and seaport charges and fees, charges on travel
tickets, endeavour and taxes on the fuel, tax on the facility, allowance for the safety); hotel and
other betterment. These taxes highly affect the event sector in UK (Pedersen and Thibault, 2014).
A major trend in recent times is the development of the event industry in cities other than
major metros. As real estate prices have been soaring, setting up and are becoming more expensive
cause of taxation policies. This in turn highly affects the this sector in UK (Nanau, 2014).
Changes in industry structure
It is affected by Brand power and customer loyalty, Multi-channel customers, and interest of
investor and responsible business of events organized in the United Kingdom. Power of brands can
be a key source to influence the event sector (Catterall, Maclaran and Stevens, 2013). For example,
many resort and organizations like Olympic game was organized in UK to attract visitors and
enhances contribution of visitors in UK economy. But these facilities are based on segmentation in
nation. This thing is increasing brand and consumers loyalty for only premium class people
(Rogerson, 2013). There is issue with middle class people in the nation. These types of people are
suffering with many facilities in the nation (Boykoff and Olson, 2013). They are not getting proper
services which are creating constraint for event sector. They are not taking interest to see tourist and
places where event is organized due to shortage of monetary funds in UK. These things are
affecting growth of event sector in United Kingdom. Responsible business is also another economic
issue of event. Rules and regulation of immigration is very strict for foreign visitors which creates
problem for the foreigners to get entry in the country (Bladen and et.al., 2012). It is also time
consuming process for other country people in the Britain. So event hositing organisations do not
able to operate proper business in the UK. This process is affecting the profit of event sector in
United Kingdom. This industry is generating limited revenue from domestic and international
tourist which directly creates bad impact on the nation. Investor’s interest also affects the event
sector by changing industry structure in the nation. Generally, Shareholders of UK are taking more
interest in developing urban area for organizing event and increasing tourism (Catterall, Maclaran
and Stevens, 2013). On the other side, they are not concentrating on improving rural areas in United
Kingdom. This process is also affecting the income of event sector which directly affects the
economy of country.

Inflation
Increasing inflation also has negative impact on event sector in United Kingdom. It also
increases prices of raw material in the nation which directly enhances cost of products and services
in the country. For example Inflation was witnessed in the year 2008 in UK. These things increased
the cost of commodities in nation was affected cost of event (Steyn, Hollander and Roux, 2012).
This process also obliged event organisation to raise price of services which created negative impact
on travellers in the nation which was attended event. It decreased the frequency of visitors in United
Kingdom. Increasing inflation also obligated the people of UK to reduce necessary expenses. It also
affected flow of money in the country (Moital and et.al., 2012). Further, it reduced the demand of
products and services in the nation. This process negatively affected the travel and tourism sector.
At that time, event hosting organization produced very low revenues as per comparison of previous
years in United Kingdom. These things affected the economic level of nation due to shortage of
monetary fund’s in the country (Getz, 2012). This process also reduced frequency of foreign
customers in nation which decreased business of event sector in the country. These complexities
created big issues for event hosting organisation in UK. For example, Hilton and many other
enterprises generated negative cash flow during this year because of increasing inflation in the
United Kingdom. This process also obliged the travel and tourism sector to import services to
accomplish their operations in the nation. Event organisation was unable to invest any type of
capital investment due to loss of income in United Kingdom. Currently, inflation level is stabilized
in UK (Rogers, 2013).
Exchange rate fluctuation
Generally the floating exchange rate system is the regulation among all countries. This currency
value is fluctuated by foreign-stock exchange which is based on economic performance of nation.
For example, performance of UK is positive in all sector including travelling and event sector then
value of currency rises as comparison of other (Spenceley, 2012). Otherwise, reduction is also
possible in pound. Mainly this factor is affected of by event organizing trends and depreciation of
currency of UK. Mainly Britishers gives higher priorities for travelling on the other countries to
view evenets. This process also reduces the monetary funds which directly affect the economy of
nation. Currency rates impacts various fundamental and technical factors in the nation. These things
also associate interest rate differentials, economic performance, supply and demand of the two
currencies and inflation in world 12. (Pedersen and Thibault, 2014). Mainly, multi national
hospitality organisations are also affected by these affect in the all nations. This process also
reduces their revenue generation which affect the income this industry in the United Kingdom
(Wellington, 2015). Mean organisations will conduct its transactions by using the various currency
payments from one to other nation. This process includes foreign currencies between two countries.

If the value of pound is fluctuated sharply or unexpectedly in the global market then it also affects
profits of hospitality organizations. This process affects the services of travel and tourism sector in
the United Kingdom. Government of UK gains less income from this sector as tax (Moeran and
Pedersen, 2011). These things also create many complexities for hotels and resorts in the nation.
Fluctuating value produces issues on currency futures markets as well as economic uncertainties. It
makes difficult to secure estimated profit margins of hospitality organizations in the Britain.
Unfavourable exchange rates oblige the travel and tourism sector to change in travel patterns, rules
and regulations for hospitality corporations in the United Kingdom and affects success of events
(Baylis, Wirtz and Gray, 2013).
Natural disasters-
It is one of critical issue for event sector which affect economic condition of the UK very badly.
This thing also spoils the budget plan of nation because it occurs unexpectedly in the country. It
generates so much expenses of United Kingdom. These things affect the other operations of the
government in the state. This process also impact heath and tourism sector in the nation (Leleivai,
2014). Natural disaster is come in the form of earthquake, flood as well as heavy storms which
harm social assets and people in the nation. It also damages event area in the country. These things
also create fear in the mind of local and international tourists in the United Kingdom. This process
is reduced travellers for many years in the nation. In addition, government also apply huge efforts to
improve affected area as well which create so many expenses to repair and renovate them in the
country (Dhurup, 2012). This process also affects income of event sector in the UK. It also reduces
business hospitality organisations in the impacted area for many years. This process also generates
less income for these corporations in the country. Natural disaster also creates unwanted situations
for the government of Britain like enhancement various diseases which oblige them to provide
different medical facilities to cure the people as well within nation. So natural disaster affect the
economic situations so much badly which directly impact on revenue of event area in the United
Kingdom (Moeran and Pedersen, 2011). It also affects event areas and also reduces business. So
these types of things impact the profit margin of hospitality organisations as well as tourist places in
the nation (Du Plessis and Saayman, 2015). In addition, it affects income of government by
collecting less income from event sector in the United Kingdom. For example, due to increase
taxes many event planning organizations are facing several issues such as lack of availability of
talented people and it will create negative impact on the canvas of the mind of customers who will
attend event Due to negative change come in economy conditions, event planning organization are
spending less amount of money in recruiting talented employees.

Capital investments-
There are many issues in this event industry. Generally government of UK does not
emphasizing more concentration as comparison of other sector like renewal energy as well as
defiance. These types of approaches are also affecting income of event industry in the Britain
(Rentala, 2012). These things are also creating less interest in shareholders regarding this industry
in the country. Many other investors are investing their money on the other sectors in order to earn
more profit in the nation. So event organizations needs more monetary fund’s to develop new tourist
areas to improve these industry in the United Kingdom (Ward, Yates and Song, 2014). In addition,
these types of things are also affecting the operations of its industry which is generating fewer
revenues as comparison of other sectors in the nation.
Generally, events planning firms are facing so many problem in the United Kingdom because these
firms do not getting better talent in the nation. Organisations are suffering management problems to
manage its operations in the UK. Due to this effect, corporations are feeling problems to manage the
events. These things are affecting the client services in the nation. In addition, complaints of
consumer have increased as comparison of previous years in the firm. This process is also reducing
customer’s orders in the nation. There is no better college in this area. So organisations are not
getting better talent in workplace in the country. Event planning corporations also facing training
problems with hired employees. Generally new trainees do not have basic knowledge regarding
event management in the United Kingdom (Chappell, 2014). Due to this effect, expenses of event
organisations have increased as comparison of previous years in the country. Many of staff
members also leaving the job due to lack of event management skills in the work place. These
processes are increasing work pressure in the organisations. Therefore, there is need to manage all
activities in the event management corporations.
Due to changes come in economy, entire event industry has been reflected and lack of
availability of talented employees created issue for event organization to host event in a proper
manner. This approach also reduces the profit of small event planners in the United Kingdom.
Foreign investor will get more profit as comparison of domestic shareholders which increases
transactions of currencies (Ward, Yates and Song, 2014). This process will also decrease economic
value as comparison of the other nations. Foreign direct investment will be very costly expensive
and risky option for hosting event which will reduces income of this sector by increasing more
rivalry among the more enterprises in the United Kingdom. After implementation of Foreign direct
investment, this sector has to follow many rules and regulation of FDI which creates so many
complexities to handle these operations in the United Kingdom ((Matei, and Chirita, 2012). This
way, capital investment highly affects the economy which creates many issues in organizing event

and influences the entire event sector.
CONCLUSION
From the report, it is found that overview of event sector provides the brief information
about this industry in the country. It is giving optimistic advantage to understand further economic
knowledge in the nation. Further, brand and customer loyalty also provides fewer opportunities for
small event planner as comparison of premium class people consumers in the event field within the
United Kingdom. Fluctuation in exchange rates is affecting operations of event industry in the UK.
It also creates complexities to earn profit for event planning organisations in the nation. In addition,
natural disaster and economic issues highly affect the economy, event industry of United Kingdom.
They also impact financial budget plan of the nation and entire event industry. It can be concluded
that foreign direct investment and changes come in event industry will also create negative impact
on income of event hosting firms due to high competition in the nation.

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