- Conference and events space provider Convene lost nearly 70% of its revenue in 2020.
- As the flex office space sector suffers, Convene is switching 50% of its business to digital gatherings.
- But so far, the company's effort to make virtual events a robust revenue engine has fallen flat, earning just $1 million.
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Meeting and event space provider Convene is planning for half of its business to migrate online, CEO Ryan Simonetti told Insider.
The shifting focus to remote gatherings using custom software developed by the firm — which had specialized in flexible-term office space, coworking locations, and conference venues — comes in response to the growing realization that it may take years for business travel and in-person events to rebound from the pandemic.
"Once we come out of the pandemic... we see a 50-50 split," Simonetti told Insider. "Meetings will be more local. The biggest cost of a meeting or conference is not the space, it's airfare and the hotel accommodations. We believe business travel coming out of this will be impacted."
Simonetti said he was hopeful that virtual meetings could, one day, be as lucrative as in-person events. Convene, he said, earned about $15,000 in revenue per virtual event in 2020 — the same as it did hosting traditional in-person meetings.
The company's digital offerings, however, still represent just a tiny fraction of the income it reaped from in-person gatherings before the coronavirus crisis.
A Convene spokesperson said that remote events have generated $1 million in total revenue so far and that it had about $4.55 million of worth of upcoming digital bookings.
Convene earned $123.9 million in revenue in 2019, according to a spokeswoman for the company. The spokeswoman, Hannah Bergh, said that 2020 revenue had fallen by 66% to roughly $42 million, a dropoff that she attributed to a sharp decline in Convene's core business of hosting in-person events, which comprises the bulk of its earnings. The company, Bergh said, hosted 80% less in-person gatherings and events in 2020. Convene also operates flexible workspaces, another area that has been hit hard by the pandemic.
"It was a challenging year, last year and there were a lot of tough decisions, including layoffs and furloughing and shutting locations," Simonetti said. "The next few months will be tough too. What we're hearing from customers and seeing in the data is [during] the second half of the year, as vaccines are administered at scale, we'll hopefully see the core of the business come back."
Convene laid off 150 employees and furloughed another 421 at the start of the pandemic in March. It currently has roughly 200 workers, its spokeswoman said. It also closed three locations, leaving it with 29 spaces, the spokeswoman said, 10 of which are in New York City. In addition to New York, it has locations in Boston, Chicago, Philadelphia, Los Angeles, Washington DC, and London.
The company has raised $410 million in investment since it was founded in 2009, including a $150 million credit facility from a group of banks led by Goldman Sachs. Simonetti declined to specify how much it has drawn down from that facility.
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Correction: In a previous version of this article, Ryan Simonetti, Convene's CEO, stated that the company's 2020 revenue had declined by 80%. In fact, the number of in-person events hosted by Convene dropped off by 80% and Convene's revenue fell by 66% in 2020, a spokeswoman clarified.
