The industry is set to benefit from climbing corporate profit and disposable income
Los Angeles, CA (PRWEB) June 14, 2012
The Party and Event Planners industry is highly dependent on the ability of its clients to spend money on discretionary services. Businesses hire event planners to coordinate holiday dinners, fundraisers and client appreciation events. Their demand is determined by the level of corporate profit: the higher a company's earnings, the more money it can dedicate to special events. Likewise, households hire event planners for weddings, birthdays and other similar milestone celebrations, and demand from this market is determined by consumers' per capita disposable income. Over the five years to 2012, these metrics declined as the recession set in, according to IBISWorld industry analyst Nikoleta Panteva. As a result, industry revenue has fallen at an average annual rate of 1.0% to $6.3 billion. As economic conditions have begun to improve, so has industry performance. IBISWorld expects revenue to grow by 2.5% in 2012.
Profit has followed a similar trajectory to revenue. During the recession, budget-conscious corporations and consumers opted for lower-priced event options, reducing the Party and Event Planners industry's profit (earnings before interest and tax) from 16.6% in 2007 to a low of 7.2% in 2009, Panteva says. By the same token, as spending in downstream markets has grown, so have profit margins. IBISWorld estimates that profit will account for 15.7% of revenue in 2012. The outlook is positive for event and party planners. Despite a rising number of industry participants, the industry is set to benefit from climbing corporate profit and per capita disposable income. Over the five years to 2017, revenue is forecast to increase strongly. Similarly, profit will expand as clients choose higher-priced options. However, because weddings represent a large portion of the industry's services, the declining marriage rate is likely to limit industry growth to an extent.
The Party and Event Planners industry has a low level of concentration with the top four industry companies accounting for only a small fraction of total industry revenue. The majority of industry firms operate on a highly localized and niche market basis because diversified and constantly changing consumer tastes force industry operators to constantly adapt their service offerings, which limits their geographic expansion. In addition, low industry barriers to entry allow a large number of firms to operate in the industry. IBISWorld estimates that more than 300,000 companies operate in the industry in 2012, up from 2007 despite the recession contracting industry demand over the same period. A significant number of these companies operate as nonemployers or with a high percentage of part-time staff. There are several industry firms in large geographic markets that have gained national recognition such as Abigail Kirsch, Blue Plate, Along Came Mary and A Joy Wallace due to their high profile events and the clientele they cater to. However, IBISWorld estimates that no industry firm has achieved significant market share. For more information, visit IBISWorld’s Party & Event Planners in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is comprised of companies and individuals that organize social events such as parties, weddings and other social gatherings. This industry does not include companies that organize conventions and trade show events.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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