When COVID hit in early 2020, everyone was impacted for the first 3-6 months from major shutdowns. Factories, shipping and receiving docks and warehouses were limited in their capability to produce, receive and store goods due to a short supply of labor. Shipping companies took ships and crates off of the supply and delivery chain. Even as we begin to open up, the impact of the shutdown is felt across the youth sports and travel industries.
Here are some expenses that you can expect to increase next season and how your volleyball club can plan ahead:
Uniforms and equipment
Jason Kra of Li and Fung Supply Chain Management, Hong Kong’s largest export trading company, is responsible for the entire North American territory. On a recent forum he spoke about the effects that COVID had on the supply of soft and hard goods to North America. He stated that 75% of the fabric (uniforms) and 80-85% of the hard goods (balls, sports equipment) in the world comes from China.
Current challenges for the U.S. economy include tariffs affected by the trade war, which is expected to continue; the exchange rate is a 5-6% swing against the U.S. and is expected to stay in place for at least one year. The price of corrugated boxes has increased by 100%. Spandex is up 120%. Sea freight is up 100%. These issues are not permanent but are expected to continue for another 9-12 months.
431 Sports, the Official Team Dealer of the JVA, predicts ongoing supply chain issues, which is why it is essential to forecast your uniforms in advance of try-outs, especially if you are ordering sublimated jerseys.
Interestingly, these issues are not solely based on supply and demand, people are not buying 100% more goods. They are related to the loss of workers, loss of flow of immigrants, factors of where supplies are made, where they are sewed (in the case of wearables), and where people want them to go. There will be shortages and delays. Whether your uniforms are sewed in Asia versus Mexico will affect availability due to shipping issues. Custom uniforms will take longer to produce than stock designs. Jason’s suggestions to help clubs navigate these hurdles are to plan much more in advance, be able pivot and make quick decisions.
Another budget item that could impact your club travel costs are hotel rates. Depending on how your club structures club dues, as a club director, you may need to make some adjustments. Clubs that team travel will need to account for probable increases in hotel and transportation costs.
As the U.S. continues to open up for travel, the youth sports market has contributed to the hospitality industry recovery. Popular meeting and conference locations are seeing much higher rates due to all the meetings that were relocated from 2020 and 2021 are now booked into 2022-23 and 2024. This has created a lot more compression than usual.
Fortunately, many of JVA’s hotel contracts for the coming season have already been negotiated, most with none or minimal increases. We would expect this to be the case with other major volleyball events.
Tournament entry fees
A number of factors will impact tournament entry fees. Larger events held in convention centers may need to increase tournament entry fees. Convention centers were shut down during COVID and are looking at higher facility rentals. The Convention and Visitors Bureaus who depend on hotel fees to provide incentives to event hosts will need to recover and may offer lower incentives. Tournament sponsors may have to cut back their support. In a recent survey of JVA clubs hosting tournaments, 25 percent of clubs said they are planning to increase their tournament entry fees, while half are undecided.
Expect increases in food and concession costs. Food costs have also risen an average of 8%. This is due to weather issues in the south, rising cost of shipping and need to pay higher wages due to lack of warehouse workers. It is minimal but is important to factor in when ordering large quantities.
Concession stand food vendors have raised costs as well. Local businesses who sponsor your hosted tournaments and club have seen their budgets decimated, which could impact the opportunity for trade outs such as athletic trainers on site at events and practices, as well as local restaurants to cater meals for your event staff. There is still a heightened sense of cleanliness among the youth sports population so you may need to keep paying more for cleaning supplies and the labor necessary to perform the cleaning services. Additional costs to continue to factor in are the administrative costs to manage on going health screening and ongoing cleaning services.
To offset the increased costs, clubs may have to raise their dues. Clubs who host events may consider raising admission fees. Hosting a club fundraiser can help offset higher costs. Clubs may have to temporarily cut out some of their “free” or “included” amenities such as recruiting assistance, positional training, strength training and provide a menu of options for families to “add on” for additional cost.