Plans and budgets are musts in the meetings and events world, but today, these tasks are ever more critical as inflation hits 9.1%, and supply chain challenges and product shortages become the norm. Without solid planning and realistic budgets, planners may struggle to control costs while trying to meet event goals. As an executive director for Executive Director Inc., Kristen McGuire, CMP, oversees meeting planning for the Agricultural & Applied Economics Association (AAEA). “Our budget has increased significantly,” she says. “Being a nonprofit, the current budget climate has been especially challenging.” To address some of these increased costs, McGuire started walking AAEA board members through the challenges that lie before them. Then they set and prioritized event goals together. Hybrid and virtual meetings, technology needs and event cancellation insurance rose to the top of their prioritized budget list — all of which have much higher price tags than before the pandemic.
According to McGuire, it’s also harder to find sponsors or fundraise outside the organization: “Sponsorship dollars are not there, so where do you get funds to cover additional costs without them?” Her advice to other planners facing similar budgetary pressures is to “plan and budget for the unexpected. Things will shift and change dramatically in the days, weeks and months before a meeting. Be ready to pivot.”
McGuire then offers five tips to help peers keep costs in check.
Roles have reversed from when the pandemic first strangled the meetings and events industry. Today, with space in sudden demand and prices at a premium, venues have the upper hand.
The AAEA books meetings five years out. The association inks these contracts based on the situation at the time. But now some association members remain uneasy with in-person events and attendance is down. “You may do a virtual or hybrid option to meet their needs, but you also have to consider your bottom line,” she says. “You are still on the hook for these contracts, and hotels and venues are now less flexible with contract obligations.”
Most hotels and venues set prices a year out. “Make sure they put those prices in writing in the contract itself. You can at least get pricing fixed as of a certain date so they cannot come to you a month out with a price increase,” suggests McGuire.
Get Inventive with F&B
According to research from the Professional Convention Management Association, food and beverage represents 36% of all in-person event expenses. Here, McGuire says, “Get creative.” Incorporating food that is in season, buying in bulk or offering a buffet rather than a sit-down dinner can all save money. But the choices are not always this cut and dry.
McGuire also recommends talking openly and working together with vendors. “Say, ‘This is my budget. Is there something we can do to get creative with the menu?’” she advises.
Increase Registration Fees
Increasing registration fees can offset higher prices. The AAEA raised its event pricing, and now charges the same price for virtual/hybrid and in-person attendees. McGuire explains virtual and hybrid meetings can cost more than in-person events, but the benefits of attendance remain the same.
To help gain acceptance, the AAEA’s board president drafted a letter explaining the price increase and sent it to members. “The letter was open and transparent. She explained the cost of holding a meeting and noted the association was eating some costs. She added that, in order to ensure we offer a great experience, we had to pass costs on to them,” according to McGuire.
Account for Last-Minute Costs
Keep a reserve fund to cover any last-minute expenses that were not budgeted. Increase the amount held in this account over previous years. “When the unexpected happens, you can dip into that pool of money,” McGuire says. “It’s critical to have reserve funds available so you have some flexibility.”
Pad the Budget
Though a conservative budget is always best, McGuire also proposes slightly padding budget numbers to cover higher costs during this unpredictable time. “Putting a little extra in the budget prepares you for the worst-case scenario,” she confirms.
Inflation and supply chain challenges complicate setting realistic event budgets, but pragmatic planners use realistic numbers with an emergency fund built in to pivot as challenges arise.
Guest Blogger: Ronnie Wendt - Midwest Meetings - http://midwestmeetings.com/2022/07/15/budget-friendly-tips