Rental Trends: Despite Consumers’ Cautious Spending, Companies Continue to Invest in the Future

January 5, 2012 No Comments

When it comes to special gatherings, families, schools, corporations, and other organizations consistently want to create the perfect celebration, party or event.  But for those in the industry, meeting that demand can be a complicated business. After all, it can be challenging, from changing economic conditions and the need for new product awareness to addressing risk management issues, developing strategies for building the right staff and creating the right business image. And the list goes on.
Fortunately, the American Rental Association (ARA) represents a central resource for proven business development tools, education, training and networking.  It also provides those in the industry with an opportunity to see the latest products and technology all in one place.  Just as importantly, it provides a chance for members to share what is and isn’t working.

Chad Cooke, one of the owners of Cooke Rentals in North Carolina, photographed with a photo booth. “Right now it seems like corporate parties are still going on and for the amusement end people are still renting inflatables,” Cooke said.

Amusement rental professionals from across the country recently provided a glimpse into the current forces they see shaping the industry in their regions, issues and trends that will likely resonate at the ARA’s upcoming annual convention and trade show in early February in New Orleans.
One common factor across the country has been the weak national economy.  It’s impacting everything from revenues to buying decisions.  “We saw the recession hit the east coast, then the Midwest and finally us,” said Larry Steele, owner of Aurora Rents based in Shoreline, Wash., a suburb of Seattle.  Steele, who indicated he plans to attend the annual ARA, added, “So, we were the last in and I think we are going to be the last out.”
According to Damon Holditch, owner of the Marquee Event Group in Austin, Texas, “People are being more selective in what they do.  They have been hoarding their money for a long time and it has not been politically correct to do things like have a Christmas party or for businesses to celebrate making their goals.  So, they just don’t do it.”
Doug Wall, the owner of All About Fun in Rockwall, Texas, agreed and added, “We are a very small company and for us in this economy people tend to spend their money on simple inflatables, if they spend money at all.  We primarily do family parties and some corporate events.  But things like renting inflatables are luxury items and like other luxury items the industry in general is struggling.”

The experts, though, see things changing.  “I believe the upcoming elections are going to signal changes in Washington,” said Holditch.  “We are very optimistic and think 2012 will be a year of rebound and celebration.  And, we have invested heavily the last four years because we know it can’t stay down forever and think it will come back with a roar.”
And, at family run Cooke Rentals, with three locations in North Carolina at Mt. Airy, Cornelius and Denver, Chad Cooke, one of the owners noted, “Right now it seems like corporate parties are still going on, and for the amusement end people are still renting inflatables.”  But he added, “We are not doing as much with things like bounce tents for family and social gatherings as we are with corporate.”

A wedding setup with rental equipment from Cooke Rentals. Companies need to stay abreast of trends and plan accordingly, one of the company’s owners said.

Companies need to stay abreast of those types of trends and plan accordingly.  Cooke advised that, “One way I stay on top of things is through the ARA.  With things like seminars they are very informative.”
According to Cooke, “The general public doesn’t seem like they have that much money to spend on parties so we are doing more corporate events.”  He illustrated his point by saying, “We recently did an event for a large bank, about a $10,000 job, and they rented not only tents, tables, chairs and linens, but also inflatables and we brought in battery-powered bumper cars, more adult-related items because the event was for grown-ups.”
He continued, “And, I’ve got an event coming up for a new hospital right outside of Charlotte, requiring about 8,000 square feet of tent.  They are spending about the same amount and are bringing in a couple of inflatables and Santa Claus.  It’s the whole nine yards, tents, chairs, linens, portable generators, staging, carpet and more.  That’s why I say corporate.  We do the small jobs, but it seems like companies are really the only ones with money.”
But some family events never go out of style.  “Weddings have not taken a hit for us because they are going to happen,” said Holditch.  “People are going to spend money on daughters and granddaughters. That’s just the way it is.”
“We do a little bit of everything,” said Scott Hirsch, owner of Your Event Source based in Pineville, N.C., “including schools, colleges and professional sports teams.  For us it’s mostly novelties and inflatables, bounce houses, slides, rock walls, mechanical bulls, which are very popular, and those types of items.”
Others have targeted different market segments.  Scott Bryant, owner of Bryant Rent-All in Lexington, Ky., said, “Weddings and universities are key elements for us. These are the two driving forces that make our business. And, I’m optimistic and think 2012 is going to be a good year.”
From North Carolina, Hirsch’s company handles events at many of the colleges up and down the east coast.  To meet this market they have individual sales reps, for example, one for Virginia Tech and another for the University of North Carolina at Charlotte.
Consistent with staying current with changes in the industry, Bryant noted, “We go to the ARA show every year.  We get an educational benefit through their seminars.  The networking aspect is also huge for us, talking to our peers.  And, we do a lot of our buying of items at the show.  I enjoy looking around and finding new products.  That is a big draw for us.”
“We are very diverse and always looking for new ideas,” said Cooke.  “The newest things we added recently were two 60-inch flat screen TVs because my brother does a lot of things with a company in Charlotte that brought in a $450,000 Lamborghini to sell and they needed a TV to show video of it.  And, we have an old time photo booth.  I also often need choral risers and tiered stages.  They are expensive, but when you look at all the labor involved to build the individual pieces it can be worth it to invest in the latest.  You just roll it in and hit a button and it unfolds the tiered pieces.”
He added, “We have over 30 inflatables, a rock climbing wall, wet slides and jousting where you knock the other person off a pedestal. You would think those would be a huge draw, but it is expensive in these times for families.”

Piping used for trade show booths photographed in the Cooke Rentals warehouse. The company also rents drapes for the booths.

Cooke also collaborates with others to offer his clients complete event packages.  As he noted, “We recently provided another rental company with a tent and they provided us with bumper cars.  So, we try to work together a lot like that to provide a total event.”
Despite the weak economic news, there are signs that the industry is poised for a rebound.  According to Bryant, “In terms of changes and trends, we have noticed that a lot more upscale items are starting to really take off in our area.  As far as staples, they are still great rentals, things like traditional table linen, but now specialty linens are becoming big.  That is, different patterns and material.  More upscale chairs are also gaining in popularity.  So is lounge furniture.  Those types of products are getting hot.  Those are probably the biggest changes in our market I’ve seen in recent times.”
Hirsch agreed and said, “I think corporate events will bounce back in 2012.  We definitely saw corporate events decline and then start to come back.  Overall, though, we have been very fortunate and have seen our operations increase by about 20 percent a year.”
Others agreed.  Steele said, “Our business trends are showing a little bit of an uptick over last year, but last year was down 30 percent so at this point it’s all relative.  But I do think that we hit the bottom and are starting to come back.”  He predicted, “We will probably end up with our total rental volume increasing by 8 to 10 percent this year over last year.”
While it appears that corporate and school events are gaining strength, less clear is when family gatherings, like reunions and birthday parties, will turn around.  This is due to the health of that segment of the market being tied closely to housing values and employment numbers.
The experts said it is clear that the industry is being driven by new products, efficient operations, being able to offer complete event solutions and smart marketing. But success in today’s marketplace requires knowledge and flexibility to ensure informed decision making by business owners. They are essential in efforts to find ways to develop winning marketing strategies and effective strategic and operating plans. That’s where the experts also said ARA can help. –


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