Homeostasis (noun): the ability or tendency of a living organism, cell, or group to keep the conditions inside it the same despite any changes in the conditions around it, or this state of internal balance.
Following the 9/11 terrorist attacks in the United States, air travel in that country tanked. The September to December 2001 period saw an immediate 20% drop in US air travel over the comparable period a year earlier.
It wasn’t just a short-term phenomenon. It took until July 2004 for passengers to surpass pre-9/11 numbers. By 2005, with oil prices now beginning to soar, four of the five largest US airlines — Delta Air Lines, Northwest Airlines, United Airlines and US Airways – had filed for bankruptcy protection.
Researchers are looking back at the post-9/11 airline industry as they try to forecast what lies ahead for airlines post-COVID-19. I think the airline experience is also instructive as we try to understand what course of action might best serve sports, events and sponsorship.
Several factors help explain what happened to airlines after 9/11. I want to focus on one: perceived risk.
The immediate steep decline in air travel can be explained by the higher perceived risk even though statistically, air travel was just as safe after 9/11 as it had been before. That didn’t matter. Very few people assess their own risk the same way that statisticians measure it. If you need evidence, imagine spending a few moments in a crowded high school gymnasium as a scientist tries to explain how little risk there is in burying nuclear waste 600 metres beneath nearby bedrock.
When we cast our mind ahead to the post-COVID-19 event and sponsorship industry, the question now being often asked is, when will people feel safe enough to gather in large groups?
That’s where the concept of risk homeostasis comes in.
Risk homeostasis tells us that an individual will accept a fixed level of risk for a certain level of reward. If you adjust either side of the equation, the risk or the reward, people will adjust their behaviour, taking on more risk or less in order to achieve a greater or lesser reward. By maintaining a comfortable internal balance of risk and reward, they maintain a homeostasis of risk.
When four-wheel-drive passenger vehicles became popular, it was often said that drivers would now find themselves stuck in deeper mud, further from the road. That’s largely what happened. Drivers of four-wheel drive vehicles generally take more risks than drivers of other vehicles because they believe their vehicles are safer. That’s how risk homeostasis works.
A fan at a hockey game in December 2019 would have balanced the cost of the ticket and parking, the opportunity cost of the time spent getting there and back, and the perceived risk of being struck on the head by a puck or being drenched in someone else’s beer, against the reward of attending the game, and would have found that the reward exceeded the costs and risk. That same fan contemplating attending a game in December 2020 will be offered the same reward, and will face the same costs and risks, plus one more: the perceived risk of contracting COVID-19.
For a rabid hockey fan who believed that in December 2019, the reward far exceeded the risk, it may not make a difference. The reward may still far exceed the risk. But if that fan judges the risk too high for the reward (and remember, it has very little to do with the actual risk), the fan will stay home.
Event organizers will try to reduce the actual risk by introducing various hygiene measures that may assure some and anger others and, ultimately, have little impact on the risk-reward ratio. Limiting seating to alternate seats in alternate rows may reduce risk, but it will also diminish the reward of attendance. Requiring event staff to wear masks will have little impact on actual risk (they represent a small percentage of total attendance) and may actually amplify perceived risk if the majority of fans are not masked. Requiring all attendees to wear a mask would certainly reduce risk, but would also seriously erode the rewards of attendance.
These are all worthwhile measures. Of course owners and organizers should do whatever they can to reduce the risk to fans. I’m just not convinced it will be enough to put them back in their seats.
It’s tempting, of course, to hope that a man or horseback will ride in with a syringe of vaccine and save the day. Science may surprise us, but a vaccine may not be the event industry’s silver bullet. Remember that risk homeostasis relies on a perception of risk that is often unrelated to actual risk. The post-9/11 security measures worked. Terrorist attacks on airlines became a very rare phenomenon, but it took years before travellers were fully convinced that it was safe to fly.
The other option, then, is to consider the reward side of the risk homeostasis ratio. Instead of asking, when will people feel safe enough to gather in large groups, team owners, leagues, event organizers and their sponsors must ask, what can we do to raise the rewards of attendance sufficiently to overcome the perceived higher risk, and restore a favourable homeostasis of risk?
It’s an opportunity, I believe, for leagues and event organizers to think far beyond the standard suite of promotions used to attract fans. It’s an invitation to re-examine the entire event experience – pre-event, in-venue and post-event. What are the pain points in the ticketing experience that can be alleviated? What rewards, beyond the promise of entertainment, can we offer the ticket buyer at the moment of purchase? What can we do, as organizers, to ease the burden of travel from home to venue, and back? What enhancements can we make, from seating, to foodservice to entertainment, outside the field of play? Are there ways that we can safely lower the barriers that separate the entertainers from the entertained? What tangible, meaningful rewards can we offer our fans, beyond self-serving discounts on future ticket purchases, that genuinely express our gratitude for the incremental risk they have borne?
These are all questions that teams, leagues, festivals, events and causes, and their sponsors have been asking for years. Or at least they should have. Now’s the time to revisit those discussions, and to do so seriously, in order to be prepared when we finally cross the finish line.