One of the few organizations that is dedicated solely to serving the needs of professionals working in the rental and staging business is the ICIA Rental and Staging Council. The Council is spearheaded by Donald Guzauckas, Jr. who's in the middle of his second year as chairman of the group. Guzauckas has been involved in the A/V industry from more than 12 years and is also general manager of HB Group, a mid-sized staging and rental firm based in North Haven, Connecticut. In the following interview, Guzauckas shares with us some of his thoughts on the mission of the Council, the state of the rental and staging industry, and the challenges facing rental and staging professionals in today's tight economy.
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SRO: What is the mission of the Rental and Staging Council?
Guzauckas: The council is a resource for the members and it helps promote and organize the rental and staging industry. A lot of people don't believe that the rental and staging industry is a respected industry. What we do is invisible. They don't see a value to it. So one of the things the council does is promote rental and staging services both within the A/V industry and in the public arena.
SRO: So the perception is that A/V equipment is just simple technology that you just have to plug in?
Guzauckas: A lot of people perceive it that way. Of course, there are a lot of people who understand what we do and how difficult it can be, and they understand the value to it. But many don't.
SRO: How does raising respect for the industry change the market or the practices of staging professionals?
Guzauckas: It comes down to perceived value. So instead of a client looking at the price and saying, “I don't see any value here, why are you charging so much money?” they will see the bottom line as an investment in their business and that we are providing value to their business as opposed to just providing a projector or display or sound system.
SRO: How would you define what that value is?
Guzauckas: In staging, especially for a corporate event or meeting, it's important that the message be delivered clearly. If there are flaws in the display system or the projectors are out of convergence or things fail, the focus comes away from the message and ends up on the equipment. By focusing on value instead of price, customers can get better equipment or better technical staff or use a better company overall to put forth a better image and, therefore, their audience gets the message instead of paying attention to all the technical issues. What I tell people is that the best compliment in my business is when somebody says, “Everything went very well, we didn't even know your guys were there.”
SRO: What else does the Council do?
Guzauckas: We promote education in the industry. ICIA has many educational resources available, including courses specific to the rental and staging market. We try and promote standardized education in the industry. Right now, in parallel industries, like systems integration, there are design schools and programming schools and industry certifications. ICIA provides the only rental certification, if you will, in the world. Many people don't know about that, but we are promoting that education, and companies that use this education and are certified by the ICIA in rental and staging are going to be slightly better than those that are not.
SRO: What is the focus of the education?
Guzauckas: Course work covers technology, sales, and show planning and coordination. So there's some sales, some operations, some technical, some logistical — there's a little bit of everything in there so that staff that goes through it will have a well-rounded knowledge of the industry as opposed to the guy who's just delivering and picking up gear who doesn't really know about the industry.
SRO: How long does it take to do the course work?
Guzauckas: There's two parts to it. There's an online course, which takes approximately 40 hours to do the work. And there is a 4- or 5-day hands-on class that culminates in two days of training, which includes a written, verbal, and hands-on test.
SRO: Although every ICIA member involved in the rental and staging business is technically a member of the Council, you've said there are only about 25 active members. Why is that?
 A peek inside the warehouse at HB Group. |
Guzauckas: I think it is a multi-faceted problem. For one thing, rental and staging people tend to be very busy. People are constantly traveling or doing shows, so they can't participate in some of the things we do, like online chat meetings or audio teleconferences. They want to, and they'll provide some input through email and posting to our list server, but they are not personally active at the time of the chats or event.
So that's one thing. Another is what I call a marketing issue. In the past, the Rental and Staging Council hasn't been excessively promoted by the ICIA. For example, I've been in the industry for 13 years, and up until 5 years ago, I never knew the council existed. And we've been ICIA members the entire time. So there was a marketing aspect to it, but I think now we are becoming more well known.
SRO: Tell me more about these teleconference sessions you sponsor.
Guzauckas: We run these Tech Talks, which are audio conferences backed-up with PowerPoint presentations online. In the past, we've done a lot of them on technology topics, like streaming media. More recently, we've discovered that our members are very astute when it comes to technical issues, so we need to address business issues. Our most recent audio seminar was on insurance and risk assessment specific to rental and staging companies. Assessing insurance for a rental company is different than for a general business because customers take temporary custody of the gear and there are issues as to whether they have adequate insurance for using it in different locations. So the seminar focuses on how you evaluate things and protect yourself from loss. That was very well received. So we've discovered people are much more interested in business issues for which there is no real formal training or grounding.
SRO: I understand the Council has also gotten involved in the issue of hotel exclusivity contracts. What are those?
Guzauckas: What happens is a hotel or venue — be it a trade show hall or concert hall — will contract with a single A/V vendor and they will require through a contract that the end-user use the services of the inhouse vendor to the exclusion of any out-of-house vendors. Otherwise, they'll pay a penalty in the form of a commission expense or surcharge or some other fee that would not be charged had they used the inhouse A/V provider.
They are essentially discriminating against the outside vendor with these surcharges. If one of my clients has used my company's services extensively, say on a road show, and they then come to a venue that has an exclusivity contract, the surcharges might prevent them from using my services, especially if they are on a budget. Additionally, what can happen is that, as an outside vendor, I might have to pay extra loading dock fees, freight elevator fees, extra labor fees, electric drop fees, any number of surcharges that would not be charged to the inside vendor.
SRO: What does the Council plan to do about that?
Guzauckas: Our goal is to generate a campaign to the end users — the meeting planners and production coordinators or whatever — urging them to review the contracts at the venues prior to signing them. If there is an exclusivity clause, we want to encourage them to remove it so that they have the option of bringing in an outside vendor to any degree with no penalty.
SRO: Are there other projects the Council is working on that you want to talk about?
Guzauckas: One other thing we are working on is a worldwide cross-rental database, which is a database of members and their equipment or services. It'll be an online database that will be searchable by other members. We are hoping to get this online by Q1 next year.
SRO: How big is the rental and staging market?
Guzauckas: There are no definitive numbers. On the basis of a bar side chat amongst several large rental companies, we've deduced that gross revenue in the U.S on an annual basis is $750 million to $1 billion in equipment and services strictly in the rental and staging market.
But it's really hard to put a finger on it. In fact, one of the things the Council is hopefully going to generate this year is a worldwide survey of the rental and staging business. We want to get some revenue numbers, some employee numbers, growth rates, that sort of thing. We've really just started working on this. To the best of my knowledge no one has ever done such a survey.
SRO: Would you characterize this market as a rapidly growing market or a stable market?
Guzauckas: I would say over the last 10 years we did see some very generous growth, but as the economy has contracted, so has our business. Over the last 9 months we saw a dramatic decrease in business, even prior to 9-11. I know a number of national rental and staging organizations that had layoffs in August. And then 9-11 was the icing on the cake. That really hurt people. In talking to a sample of people in the council, people lost an average of 50% of their revenue for the last quarter of 2001. So it was a huge amount of money that went by the wayside. However, 2001 was not racking up to be a great year anyway.
But every segment of the market sees different things happening. For example, a staging company in a major metropolitan area that usually gets a lot of meetings and conventions might see its business decrease, whereas a company in a nonmajor metropolitan area might see its business increase because people, instead of traveling to the bigger cities, are doing their events locally.
SRO: How are things shaping up now? Are people hopeful looking forward?
Guzauckas: Yes, people are positive. Nobody has seen any rapid growth this year. People have either seen it flat or a little slower than last year. Typically in this market we run a couple of months behind the economy. And what's going to happen is as companies start to plan their summer and fall events, things will start to pick up for us. For staging companies that do production as well, business will pick up sooner. So the forecast is for a better 2002 than 2001, though nobody's expecting any major growth.
SRO: Would you say the rental and staging market is one that is characterized by a lot of little players or as one that is dominated by a few big firms?
Guzauckas: The market has several segments. There are different size events. There are events that I call box rentals, where somebody just rents a piece of gear with no labor or services. Then there are small meetings, or what's known as a break out room, which require a single projector and maybe a sound system. That's a very small rental. Then there is a mid-size meeting leading into an event. That gets into maybe multiple screens, more equipment, and runs over 2-3 days. Then you get into the large staging events, which could be considered a full-blown production. Something like the Democratic National Convention or a big Ford product roll-out. So there are different ranges in the industry. And there are plenty of things in between that are just too hard to define. So to serve those different segments, there are different types and sizes of rental and staging companies. There are probably 20 staging and rental companies serving the very high-end of the market and maybe a 1,000 serving the lower end.
SRO: Are the business challenges facing the smaller companies different from those facing the biggest companies?
Guzauckas: Absolutely. In my opinion there is always going to be enough small business to go around because, in a soft economy, people don't have the budget to purchase equipment, so they rent. So, in a lot of cases, you'll see an increase in box rentals or small events because companies will tend to do things locally or do a lot of smaller events rather than one big event. So for the small guys, the issue is going to be maintaining market share as other companies scale down their services to go after that market. The challenge for the big guy is that they've got to diversify. If they are not getting the big events they've got to find something to do with their gear and their people in order to stay in business. What we are seeing is large staging companies who would normally never cross-rent their equipment to other companies are now doing that just to get revenue in on their equipment.
SRO: How have the technology advances of the last 10 years changed the kinds of things people are doing at their events?
Guzauckas: We're definitely seeing more and more multi-screen events. And people's expectations are higher. In the past, especially with data projection, it didn't bother people if there was a glitch in their switches when they would change from one source to another. Now the technology has given us a chance to bring production effects into graphics display. People are making their events more of a show. They're really trying to make it an entertainment event, to a degree. They want the flash, they want to do something a little different, and the technology has given us the opportunity to do things we could never do before.
SRO: Is it difficult for staging companies to keep up with the technology advances?
Guzauckas: Oh yeah. Very difficult. Everybody's coming out with something new all the time. Bigger, better, brighter, cheaper.
SRO: How do you manage your inventory efficiently in such an environment?
Guzauckas: Actually, I'd love to hear other people's comments on that. (Laughs) In my market, in my size business, it's fairly easy to do because we have not made an excessive investment in the really high-end gear. But from a national standpoint, especially with the softening economy, it can be a problem. A lot of people dumped a lot of money into high-end technology a couple years ago, and they havent't seen the return on investment that's required to pay it off. How they are managing that? I don't know. For obvious reasons, a lot of people hold that information close to their chest. But it's a challenge for people. You want to have the latest, greatest gear, but then you need to finance it and get it out there to get the return on your investment in a reasonable amount of time. But the life expectancy of high-end systems is similar to that of computers these days. In 18 months, it's obsolete. If you haven't gotten your return on it by 24 months, you're not making it because now people want the newest thing.
Stephen Porter is editor of SRO. He can be reached at [email protected].