WRITTEN BY EDWINA STORIE
Small audio-visual companies are crying foul of venue operators charging huge technician-on-duty fees, with a number predicting some will close unless a fairer system is created.
While the Meetings & Events Australia (MEA) annual conference in Sydney was regarded as a great success, one issue of major importance to AV companies fell flat with only five attendees.
Representatives from three AV companies and two venues attended the discussion which centred around the technician-on-duty (TOD) fees that are being blamed for putting some small and medium-sized AV companies’ backs to the wall.
The TOD fees are charged to external AV companies by venues with in-house AV suppliers. The legitimacy of the fees are refuted by some AV companies when the technician on duty is often inexperienced and unhelpful. They also question why they receive the charges instead of their clients, speculating that the venues know the clients would refuse the added fees on top of their event bill. Companies such as Microhire, AV1 and Scene Change are all concerned about the fees.
One of the attendees at the MEA conference session, Microhire’s Queensland general manager Russell Bennett, is extremely concerned for the future of the independent AV industry, believing that the TOD fees are making unfair and fatal blows to their business.
“Many small and medium AV businesses are close to going under because these policies prevent them from holding onto existing clients, or from competing on business going into these venues. The number who charge the fees is growing considerably… There are reports of $7000 charges,” Mr Bennett says.
Across the board, there is little dispute over a fee for event bump in and out, but believe being charged per hour is “unjustifiable”.
“Not to mention certain venues who, then trying to hide a similar grab-for-cash as ‘facility charges’, bill direct to the AV company who doesn’t have the booking. They know they won’t get away with charging the client a fee to use the loading dock covered in years of ingrained fat, a very stinky goods lift, and the use of power,” Mr Bennett says.
Despite the impact it is having on independent AV businesses, Mr Bennett reports that the MEA representative at the discussion said the association could not comment and that the issue must be raised with the Australian Hotels Association.
Scene Change co-founder Ian Whitworth believes the issue has implications across the entire meetings industry.
“It’s not simply about AV companies complaining for loss of revenue. It’s damaging hotel brands in the eyes of event clients. They invest a lot of money promoting luxury and service, but when you force clients to pay for a surplus junior technician to sit playing with an iPhone next to the real crew, that’s the image conference managers take home from their hotel experience,” Mr Whitworth says.
Mr Whitworth spoke at a series of PCO forums on the topic earlier this year and felt a groundswell of anger toward the recent rise of TOD fees. Numerous PCO and corporate clients stated that these fees are a driving factor in selecting alternate venues. There was also concern that protectionism will lead to a decline in professional standards, as in-house suppliers don’t have to work hard to win business.
“I believe MEA understands that this is an issue that affects the entire industry, and look forward to taking a collaborative approach with clients and venues to solve it,” he says.
Managing director of AV1 Keith Wootton reports receiving warranted and unwarranted TOD fees on a weekly basis, occasionally factoring them into a quote, or absorbing them solely for the sake of the event, rather than the bottom line.
“I do object to non-descript blanket charges being imposed. Sofitel Brisbane to name one, imposed a $75 per hour charge for lift and electricity use to be paid to the hotel directly by the visiting AV suppliers. I see this as completely anti-competitive and can understand why small operators in and around Brisbane are suffering. The question is where does all that money go? Why only AV suppliers? Why not exhibition companies, bands or DJs – all of whom lug large amounts of equipment through lifts and docks and use electricity. If there was a resident DJ in the Sofitel Brisbane, would other DJ’s be charged this mysterious fee?
“This is an example of a charge imposed purely to make up for lost revenue from their own supplier.”
The WHS argument
The issue is a touchy one among venues and external AV suppliers due to the work health and safety requirements the technician’s presence reportedly fulfils. Microhire, AV1 and Scene Change all report that the technicians assigned to assist are usually inexperienced and of little assistance.
“When you speak to in-house operators, the story is the same in terms of logistics,” AV1’s Mr Wootton says.
“No senior technicians want to take on the TOD shifts – they want to be working the shows. With an industry-wide labour shortage, crew planners will usually assign the TOD shifts to junior inexperienced crew. The work health and safety argument goes out the window,” Mr Wootton explains.
“I think somewhere along the line the industry has lost the plot. Instead of imposing these penalty charges, we should be collaborating, for the sake of our mutual clients, for the sake of the event and for the sake of the industry, not the bottom line.”
The venue’s side
In research for this article, Sofitel Brisbane – the only hotel in Brisbane with in-house AV – was named several times as having enforced these fees.
In direct response to the fees, Sofitel Brisbane’s general manager Tony Chisholm says the charges are a right the venue reserves.
“Given the hotel’s permanent AV facilities, at most times it is necessary for us to remove our own in-house equipment in order to facilitate new equipment provided by an external AV operator. So the hotel does reserve the right to charge in order to re-coup future costs incurred by the hotel for the removal or alteration of what is permanent AV equipment available at the hotel.”
Mr Chisholm says before the venue introduced in-house AV in 2009 it had covered the costs of the use of electricity, loading dock, elevators, cleaning and general wear and tear.
“In the long run, this is a courtesy we could no longer afford to extend to external suppliers.”
He says the issue of charging TOD fees not only comes back to wear and tear, but the additional resources required ensure fulfilment of legal occupational workplace safety requirements.
“The hotel service charge may actually soon also be adapted to cover a more traditional TOD facility, which we acknowledge is more of an industry standard.”
Having a technician on duty to ensure equipment is being used correctly is a responsibility that Sofitel Brisbane is unwilling to give away under any circumstances as it fulfils the minimum legal requirements.
The largest in-house AV operator, Staging Connections, understands the rationale behind the TOD service, says general manager of sales, Fiona Pascoe, because it provides a level of protection for venue assets and infrastructure and guidance for an external company working in the venue.
“It is a charge that we face often as our relationships take us around the country,” Ms Pascoe says.
“We, however, are not qualified to comment on the impact of these charges on small business.”
Microhire’s Mr Bennett believes that MEA should step in and take a stance like it did for the issue of secret PCO commissions.
“AV companies are always willing to help out and sponsor MEA and other industry events, but when they urgently need the help of the association over policies that have been exploited by many venues to the point of blatant robbery, it appears MEA see nothing to stand up for on behalf of PCOs and AV companies,” Mr Bennett says.
Mr Bennett is seeking legal advice, and is creating a petition to be signed by PCOs and AV companies demanding MEA take action.
But MEA CEO Linda Gaunt says that contrary to what a few people may be thinking, MEA is not overlooking this situation.
“This issue was also covered at the AV Special Interest Group. Once MEA receives the minutes back from the group we will work with industry on this matter and act upon all viable recommendations. MEA is already in dialogue with some practitioners to get the ball rolling.”
AV companies, especially those in regional areas with less business are reportedly at a make or break stage, and if no solution is found soon, it is feared that small AV companies will shut down and the market will be run only by the main players who have in-house contracts or who can absorb the additional fees.
AV1’s Mr Wootton believes having a technician on duty should be at the discretion of the external provider for each event.
“If they decide against it, the production company may bear the consequences, for example, if they can’t find the rigging points, and have to specifically call in someone. If they accept the fees, everyone wins – the venue, the in-house supplier, the production company,” he concludes.