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SEPTEMBER 2012 issue of
Rental Management

Helium shortage deflates balloon business
08/30/2012

Seeing 99 red balloons going by could soon be a memory of parties past if an ongoing helium shortage doesn’t get resolved. Several rental store owners say the shortage has taken a huge toll on their balloon business as the cost of helium has more than doubled and access to tanks has been sharply reduced.

Helium is the second-most abundant element in the universe, but most of it hovers above the Earth’s atmosphere — not exactly a convenient location for extraction. Helium, which is used in everything from magnetic resonance imaging (MRI) machines and scientific research to balloons, is a byproduct of natural gas extraction from underground mines. One-third of the world’s helium comes from the U.S. and one of the largest sources for helium — the Federal Helium Reserve — sits just under Texas, by Amarillo.

However, helium is a finite resource. Produced by the decay of radioactive elements in the ground, helium is the result of some four billion years of natural processes. Now, officials say, the helium reserve is running low. Hospitals usually have first dibs on helium resources. While balloons make up maybe 10 percent of helium usage, helium use for balloons is at the end of a long line.

Rental store owners have seen the shortage and resulting higher costs, first-hand, from helium providers.

Tim Cahall, CERP, director, The Main Event, Mount Airy, Md., says obtaining helium now is beyond a challenge. “We had the same helium provider for 12 years. We average three to four tanks per month in the off season, and in April, May and June, we can use eight to 10 tanks in a month. Because of the helium shortage, they began to reduce the number of tanks we could have. Now, we get one tank per month and it’s 90 percent filled. We found another provider, but they charge three times the price,” Cahall says.

Steve Reitter, manager, Robinsons Hardware, Hudson, Mass., says he has had the same experience. “Because I get all my industrial gasses from my supplier, he is able to provide me with helium, but the price has quadrupled. I used to do balloon structures. We used to do a lot of air-filled structures,” he says.

As of this spring, Reitter says his store stopped offering helium-filled balloons, at least for now. “We put a note on our website. My concern was that customers wouldn’t want to pay for that. If we’re not going to have happy customers, we’re not going to do it,” he says.

Tammy Loza, owner, Careli Party Rentals & Balloons, Durham, N.C., says she has had the same problem getting tanks. “My provider is okay about selling one, but not if I order very many. The price has doubled or tripled,” she says.

Loza began using a special valve to preserve helium and keep costs down. “The 40/60 valve mixes regular air with helium. If you use it with a regular balloon, it lasts eight to 10 hours, but if you use a high-float balloon, it lasts five to seven days. With 100 percent helium, the balloons can last for two weeks,” she says.

She says the 40/60 valve wasn’t easy to find, but that it should be available from balloon providers.

Cahall says one silver lining to the challenging economy was that it helped them prepare for the helium shortage.

“We have a huge balloon business, but it took a real hit with the economy. We used to do a dozen weddings in a weekend with balloon décor. Now, we do a dozen a month, maybe, in a busy season. So, we have already adjusted our investment and the money we have in this. Because we’ve taken that hit and adjusted, we’re in a better place to endure this helium shortage. Had it been 2007 or spring of 2008 when the helium market seized up, that would have been extremely difficult,” he says.

“The reality is that we’ll never go back to the old world of helium. The days of getting a tank at a reasonable price and getting as many as you want are over,” he says.


 

 

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