Tips for Managing the High Cost of Planning Events in New York
“In New York, we have seen clients spend double what they spent for the exact same event pre-pandemic, and that would be inclusive of venue, food, AV, and other expenses,” says Liz King Caruso, CEO at techsytalk.
Inflation has been dominating the news headlines not just in New York but all over the globe. And event planners are certainly feeling the pinch of the 8.3% inflation rate. Caruso adds, “In general, it seems that severe staffing shortages are leading to very high price hikes and a lot of unavailability in New York.”
And it’s not expected to get better anytime soon. According to the 2023 Global Business Travel Forecast, the cost-per-attendee for meetings and events in 2022 is expected to be around 25 percent higher than in 2019, and it’s forecast to rise a further 7 percent in 2023.
With price increases causing event planners to re-strategize and reprioritize their programs, here are eight tips to manage the high cost of planning events in New York and elsewhere.
Take a Close Look at Every Budget Item
During Allseated’s recent The State of the Industry Inflation + Its Impact on Events webinar, Heather Klein Rouffe of Atlas Event Rental said that even with the fast pace of work right now, it’s time to go over every business detail with a fine-tooth comb.
“There have probably seen some areas of the business that have been neglected over the years, and you’re just on autopilot. Now, all of a sudden, you’re getting hit up with paying higher labor fees, higher product costs, and extra fees that you may not even realize where you were losing money on or eating costs as a business.”
Once you’ve done that deep dive, Chanda Daniels explained during the webinar that it’s more critical than ever to loop clients into a discussion about higher event planning costs. “I have to educate my clients more and more about the estimates and invoices and why they’re a little bit higher than normal.”
Even though clients likely have heard the news stories, it doesn’t mean they connect the dots to higher event-related prices. Explain all the event goods and services areas seeing increases – from higher demand for venues and increased food and beverage costs to higher staff wages and labor costs and added production, transportation, and shipping costs for manufactured goods.
Hand-in-hand with educating clients is the notion of transparency – having open communication and working together to find a workable solution.
Caruso says her long-time transparent business approach has helped ease the process of addressing price increases with event clients. “All quotes get run by our clients before vendors are chosen, and they end up paying the bill. In this way, we can keep them in the loop about increased costs and challenges.”
Because we’ve been transparent throughout the entire process, even if we must exceed their budget due to higher costs, “they understand we are on their side,” Caruso explained.
Caruso described a recent situation with a New York service provider with an exceptionally high price hike. “We were working with a client with a straightforward A/V need: a projector, a screen, and a sound system with a single mic. For three days, we were quoted $45,000.”
She explained how the planning team pushed back, and somehow the price came down to $26,000 without much of a change in service. “We were flabbergasted,” she said.
While the savings as Caruso experienced might not be as dramatic for your event, asking all vendors to sharpen their pencils on estimates is the best event planning practice, even in lower inflationary periods.
Get Ready to Pivot
During COVID, everyone got tired of the word pivot.
But event planners shouldn’t be ready to retire the word quite yet.
For example, certain food costs are significantly higher, like chicken wings, which are up over 30% during the last 15 months, and others still remain flat, said Clint Elkins of SB Value. “We’ve been working with our clients to have a menu pricing clause on their contracts that they can adjust based on inflation of what they’re buying, so they can substitute a cheaper protein or another item if needed.”
Work Together to Prioritize
When it comes to event planning, there’s always a difference – sometimes more so than others – between the client’s wish list and their budget. It’s no different in inflationary times when it comes to event planners working together with clients to prioritize and strike the right balance between the two.
For example, during the webinar, Adam Leffel explained how there is always a give and take. “If there are certain financial limitations, [thereis value in] having an event planner help them figure out what they can and can’t do, like using the more expensive linen, but incorporating more basic tabletop items for budget reasons to still achieve that impact they’re looking for.”
Research and Vet Other Supplier Sources
Even before inflation began to rise, COVID drastically altered the event landscape. Some businesses were forced to close for good, while others shifted to providing different services. Coupled with the large demand for event services, now some suppliers simply can’t handle more work.
Caruso explained that to continue delivering the best events possible under current cost circumstances, her team is spending more time than ever researching and vetting other supplier sources. “We’ve had to do a lot more outreach to new vendors to find the best price, so this has found us working with people that are new to us and no longer working with some of the vendors we had always relied on. Sometimes it’s because of staffing issues, but mostly having to find better pricing for our clients.”
Start Fresh for 2023
As budgeting for next year’s events is in full gear, remember the doubling of event costs in New York from pre-pandemic that Caruso mentioned.
While you can use historical numbers as a gauge, past budget numbers are rarely accurate these days. Ballpark vendor estimates don’t suffice, either. The best advice is to start with a new budget.
As part of the re-budgeting process, make sure to revisit production timelines. Due to a variety of shortages, many last-minute decisions are simply no longer possible. And if an unexpected request or change can be accommodated, it is likely to add substantial extra cost. Having a realistic timeline that avoids rush charges or fees helps keep costs under control.
Lastly, consider putting a deadline for how long an estimate is valid. Many event planners haven’t used a quote expiration date and would still honor the original price even if months had passed. Given rapidly fluctuating prices, lock in fixed costs as much as possible by putting an expiration date on the estimate.
During COVID, event planners weathered the stormiest time in modern history. And the recent high event planning costs are certainly another significant bump in the road. During these inflationary times, education, negotiation, transparency, and flexibility are vital to managing the high costs of planning events in New York.