Simple Steps to Manage Rising Venue Costs
Are you faced with rising venue costs and service charges as you plan your post pandemic events? You are not alone. Many event planners are seeing cost increases in everything from in-house A/V, Wi-Fi user fees, to electrical service charges, rigging and many more. Faced with a severe reduction in bookings and attendance, venues are increasingly auditing their service offering in order to maximize event revenue and gain back some major losses.
The good news is that there are ways for you to reduce and manage these expenses while still providing the best possible experience for your attendees. Here are some proven techniques to help you manage rising venue costs:
Implement Cost Control Now
Get a clear picture of what you’re paying now and what you have paid historically– It’s important to get a handle on how much you’re spending right now on your current event planning activities and what fees and service charges looked like pre-COVID. The pandemic is not a reasonable justification for any event space or venue to arbitrarily increase charges. Electricity doesn’t cost more, Wi-Fi has not improved, audio/visual equipment has not changed, labour costs have not dramatically increased, and unless a venue has invested millions of dollars in new infrastructure, the room looks just like it did 20 months ago. Interestingly, in the Province of Ontario (for one) it’s illegal for a third party to re-sell electricity to an end user, (Section 57(d) of the Ontario Energy Board Act, 1998 provides that no person is permitted to retail electricity without a licence), yet we still see surcharges and fees assigned to this service.
So, prepare a cost audit of your historical events, against current costs and estimates in order to gain clarity and understanding of where the increases are coming from. You can use this to inform your decision making when reviewing contracts and estimates, and by not being afraid to ask a venue to provide written explanation for any increases. Additionally, ask your suppliers for quotes, not estimates. The difference being your ability to hold a supplier to a quoted price versus being faced with an estimate that can shift dramatically at the end of the project.
Manage Service Levels
If your rates and fees have increased substantially, then so too should the service levels and delivery of those items increase appropriately. If you pay more, should you not get more? If your venue adds additional fees for Wi-Fi service, should not the speed, bandwidth, access, and reliability increase as well? Ask your venue to provide details as to how the increased fees are related to improved attendee experiences. Does their Wi-Fi now seamlessly transition from one space to another without having to re-connect? Can every attendee in a general session now stream content wirelessly without interruption?
If you are asked to pay more for what is essentially the same product or service, it’s fair to expect a higher touchpoint of service from the provider, and you should ensure you are tracking that metric as your event progresses from planning through to completion.
Avoid Micro-Charging – Variable Costs
One method being employed by venues is what I refer to as micro-charging. This is where what used to be a “rate” per event (say $1000.00/Day flat fee for Wi-Fi) has now become a “per-connection” fee, where the venue will charge a connection fee for every device that uses the system. Many attendees can use multiple devices in one event (laptop, iPad, phone, etc.) that can suddenly drive your “per-connection” fee from 500 guests to 1500 connections. Similarly, rigging fees can shift from event based flat rates to “per unit / per day” structures, where nothing has changed in the service delivery, but your costs have doubled or tripled or more for the same event. Review your contracts and estimate carefully, and if in doubt, ask the supplier or venue to fully itemize costs per day prior to signing off. Transparency in line-item costing should not be a challenge to any company, so if they push back on providing it, that may be a sign that their pricing model is hiding profit they don’t want you to see. Better yet, have your Byrne Event Technologist review the estimates and provide experienced insights before you commit.
Know Your Position
As an Event Planner, more often than not you need to balance the requirements of the client within the constraints of the venue you are working in. Both have their respective positions with regard to each other as well as their own internal stakeholders. Clients want an exceptional event that runs flawlessly, makes attendees go “wow”, comes in under budget and makes them look good. Venues want happy clients that enjoy their time, spend more than their F&B minimum, with guests that utilize all the other amenities on premises that generate revenue (restaurants, bars, spas, shopping, etc.). Knowing the common ground between these two groups is critical in successful planning. Work with your venue manager to understand where their needs can be met harmoniously with those of your client. Planning to host a welcome dinner offsite? Perhaps bringing that in-house but asking the venue to prepare a custom menu designed to wow your guests is a better option, from which you can gain other concessions. Remember that expensive Wi-Fi charge? Perhaps the welcome dinner you have now brought in-house merits a rate decrease in Wi-Fi charges.
It’s OK to Push Back
This is your event, your money, and your client. It’s OK to politely push back while negotiating with venues and suppliers. The key is to partner in a positive way to ask for solutions or concessions while planning. Do not accept a contract or estimate at face value if you feel there is a greater value to your client to be realized through a bit more conversation. Every clause in a contract can be negotiated or possibly removed if you feel it does not serve the needs of your client. Read your contracts, review your supplier quotes, audit your line items, and then go back and ask; “Can we talk about this particular charge listed?” “If I offer this adjustment or concession, can we shift that cost to better reflect this particular event?” “Can you suggest alternatives that may be more cost effective to my group?” It’s also important to know what things actually cost, which goes back to your cost controls. Knowing the true market value of an item or service can help you avoid inflated fees and give you a stronger position when negotiating line items.
Avoid the Extra Cost
It’s a conversation we’ve all had when right in the middle of executing an event. Your set-up is taking longer than anticipated and you need an additional hour to be ready. Unfortunately, you’ve hit the dinner break time with your crew and are facing heavy penalties if you eat into it (pun intended). Be proactive with your team and have these conversations before you are at the last minute. In my experience, everyone is willing to work to a satisfactory solution and avoid extra costs if you engage with them proactively. There are always options available, provided you know the limits and constraints of the supplier and work directly with them to create solutions.
Take the time to talk to your suppliers and walk through your plan. Ask them to provide input on your schedule (is it reasonable? do you see any issues?) and ask them to suggest options that can save extra costs and avoid surprises. Can you shift your load in start time to avoid early start penalties? Can you break the day crew and bring in a fresh load out crew to avoid overtime? Could the lighting be switched to all LED to reduce venue power charges? Could the staff meals be added to the same menu as the guests to avoid additional prep charges? These types of questions open up the discussion and can often lead to further insights that improve your bottom line, as well as the guest experience.
While the techniques described above can be employed to manage your overall venue costs, ultimately, it’s all about asking open questions that encourage dialog. Those questions come from your knowledge and understanding of the process and tools used by all your suppliers to get their jobs done. Without questioning the process, suppliers and venues will eventually default into what works for them with the least amount of change.
While there are many Planners who can successfully navigate these waters on their own, many more would benefit from an event partner that works on their behalf to provide experience and insight into the myriad of decisions throughout the process. Having an event partner like Byrne Production Services ensures that you have an experienced and passionate team of dedicated professionals whose singular focus is on producing and exceptional event for you and your clients. Reach out to us today to book a consultation with our team.