- The $100 billion conferences and events industry in the U.S. is on edge amid the recent surge in Covid cases
- Attendance levels for major shows such as CES in Las Vegas will likely depend upon corporate travel policies and venues' health and safety protocols.
- The National Retail Federation said this week that its "Big Show," scheduled for the Javits Convention Center in New York City next month, is still a go.
Canceled Broadway shows. Shuttered restaurants. Lines of people wrapped around the block at walk-in medical clinics. Businesses sending their employees home.
It sounds like a flashback to March 2020. The highly contagious omicron variant is driving a surge of infections. In New York, the wave is particularly pronounced, with a seven-day average of new Covid-19 cases nearly doubling over the past week, according to a CNBC analysis of Johns Hopkins University data.
The ability of this variant to break through the defenses of Covid vaccinations has prompted people to rethink everyday activities like eating out at restaurants. That's put the $100 billion conferences and events industry on edge. The pandemic brought the industry, which revolves around large gatherings of people, to a screeching halt last year, as social-distancing measures were enforced.
The conventions industry has been getting back on its feet in recent months. Over the summer, billionaires like Jeff Bezos and Bill Gates retreated to Idaho for Allen & Co.'s Sun Valley conference. And the Bitcoin 2021 event brought thousands of cryptocurrency enthusiasts to Miami in June.
The Center for Exhibition Industry Research estimated that conferences, which drive business for hotels, airlines and local restaurants, contributed more than $101 billion to U.S. gross domestic product in 2019. CEIR's chief economist Dr. Allen Shaw projected in September that these gatherings would return to about 75% to 80% of 2019 levels next year — with a full recovery by 2023.
But that was before omicron, now the most dominant strain of Covid in the U.S., entered the picture. So far, event organizers have mixed feelings over whether or not gatherings will proceed as planned next year. Attendance levels will likely depend upon corporate travel policies and venues' health and safety protocols.
The World Economic Forum, which brings together heads of government and business executives from around the world in Davos, Switzerland, had been scheduled for next month, but was postponed until the summer. The group said it made the decision "in the light of continued uncertainty over the omicron outbreak."
JPMorgan Chase changed course on its big annual health-care conference after key attendees dropped out on Covid fears. It had intended to hold it in person in San Francisco next month. The event, known as one of the largest gatherings of health-care executives in the world and a hotbed for deals activity, is now being held in a virtual format.
Increasing Covid protocols
The National Retail Federation, however, said Tuesday that its "Big Show," scheduled to take place at the Javits Convention Center in New York City from Jan. 16 to Jan. 18, is still a go.
The leading trade group for the retail industry is asking that all attendees be fully vaccinated against Covid-19 and wear masks at all times in the building. NRF is also advising attendees to test themselves for Covid at home before traveling to Javits. The group said it will be offering PCR tests at the convention center during the event.
"Like all of our attendees, we are closely monitoring the external health environment," said NRF President and Chief Executive Matt Shay, in a statement. "We will continue to work with local, state and federal health officials to ensure we meet and exceed safety guidelines and mandates."
In a separate email sent to speakers who are lined up for "Big Show," NRF said as long as the Centers for Disease Control and Prevention, New York state and Manhattan deem it safe to hold the event, it will proceed as planned.
"We do not have plans at this time to go virtual, but if that decision is made, it would likely be on a delayed basis given the complexity of that pivot," NRF said in the email, which was seen by CNBC.
The Consumer Electronics Show is also still on track to be held in Las Vegas from Jan. 5 to Jan. 8, according to event organizers.
A spokesperson for the event said that CES has received several thousand new registrants since last week, even amid omicron fears. CES is requiring attendees be fully vaccinated and wear masks. It's also lowering capacity and keeping some social-distancing measures in place.
"We are confident that attendees and exhibitors will have a socially distanced but worthwhile and productive event," the spokesperson said.
Still, major tech companies including Amazon, Meta Platforms, Twitter and Pinterest said they won't be sending teams to CES this year due to Covid fears. But others like Google, Qualcomm and General Motors say they're still on track to attend and show off new products.
A representative for the Las Vegas Convention Center, where CES is slated to be held, said there are currently about 45 trade shows with at least 5,000 attendees on the books at the venue for next year.
'We're getting there'
David DuBois, president and CEO of the International Association of Exhibitions and Events, said that provided adequate safety measures are taken at venues and local mandates are followed, large-scale events should proceed. Individuals, of course, are free to make up their own mind about whether to attend or not, he said.
"Over the past several months, the exhibitions industry has demonstrated ways to hold events safely," said DuBois in a phone interview. "We have had hundreds of them in the last three to four months."
Even with omicron, DuBois expects the industry to recover, he said.
In Orlando, Fla., conference activity started to pick back up in July before it experienced a slight downtick during the fall due to the delta variant, said Mark Tester, executive director of the Orange County Convention Center. Behind Las Vegas Convention Center and McCormick Place in Chicago, the Orlando-based convention center is the third largest in North America.
The pace of conventions tends to slow down over the holidays, said Tester, and so far Orange County hasn't seen any cancellations for January shows. Not only are there financial penalties for calling off these events at the last minute, but it can damp industry morale, he said.
"We have not heard any questioning or thoughts of going virtual or doing something with [an] event due to the omicron variant," said Tester. "It may effect some attendance. ... But we work with everyone on their protocols."