More With Less: Managing the Modern Event Budget

From staffing shortages to supply chain issues, many factors contribute to rising costs worldwide, meaning businesses and people generally have less budget to spend on meetings and events. As a result, now more than ever, venues must offer competitive packages for prospective clients while maximizing revenue, driving profits and delivering memorable event experiences.  

In this post, we'll review the current events economic climate and how it impacts event spending. We'll also explore different strategies venues can and should implement to maximize their profits while remaining competitive for prospective buyers with a limited event budget. 

3 primary factors impacting event budgets

According to Technavio, the global events industry is projected to grow by USD 614.33 billion with a compound annual growth rate (CAGR) of 10.59% between 2021 and 2026. Yet, despite this estimated growth, venues will face three primary challenges impacting event spending in the coming years, including: 

1. Rising Costs

The International Monetary Fund revealed, in this post, the average cost of living increased more during the 18 months between the start of 2021 and July 2022 than the preceding five years combined. Food and energy prices were the main drivers of inflation, which is bad news for venues as these play a significant role in events. 

2. Limited Funds

Rising costs continue to have ongoing impacts on both companies and individual consumers, resulting in less disposable funds allocated to meetings and events. Therefore, venues must find creative ways to deliver memorable event experiences with limited event budgets.

3. Threat of Virtual Events

Companies and individuals hosting small-scale events are leaning towards virtual or hybrid events due to their cost-effectiveness. For large-scale events with global audiences, virtual events provide a more sustainable option to bring large groups of people together while significantly reducing the associated carbon emissions (i.e., travel, food wastage, electricity, etc.). 

How can venues feasibly cater to reduced event budgets? With the top strategies every venue can implement to reduce costs, drive profitability and consistently deliver successful events and good customer experiences. 

How venues combat rising costs and limited event budgets to drive profitability

There are several key areas that can help venues overcome rising costs and cater to limited event budgets while boosting profitability. These include minimizing costs and increasing turnover, productivity and efficiency. Here are some practical examples venues can implement to address each of these four areas and drive profits and growth: 

1. Leverage automation to reduce costs and increase productivity and efficiency

Leveraging technology, venues can automate event management processes, significantly cut labor costs and enhance productivity and efficiency. This streamlined approach mitigates human error and optimizes event management, leading to better event delivery and enhanced customer service. 

2. Maximize occupancy and manage yield

Venues should maximize occupancy and optimize yield management to boost revenue and profits. Capitalizing on off-peak periods and offering incentives to drive off-peak bookings is one example of maximizing your occupancy. This strategy is particularly beneficial for clients with constrained event budgets, allowing them to select cost-effective dates that align with their requirements. 

Optimize the yield of your venue by evaluating the utilization of your space offerings. Dig into the “why” of the top utilized space vs the least utilized. Making less desirable spaces more appealing and evenly spreading your events occupancy across your venue will even the yield of each space. Evaluating the yield of each room also will expose which rooms may need a refresh on interior due to wear and tear on the most utilized spaces. 

3. Offer hybrid event formats

Venues should prioritize in-person events, but considering a hybrid format expands their potential audience and boosts revenue opportunities. Offering remote or virtual event packages not only caters to sustainability-conscious clients, but also broadens the reach and impact of events, all while being mindful of the event budget. 

4. Reduce food costs and carbon emissions with plant-based menu options

For venues that offer catering, plant-based menu options are an excellent solution for accommodating limited event budgets. Not only do meat-free menus reduce food costs, but they also contribute to lowering carbon emissions tied to in-person events, aligning with sustainable practices. If possible, farm-to-table restaurants or venues offer a number of benefits. With farm-to-table, you support local farms, reduce emissions caused by food transportation, and ensure food is quality and responsibly sourced. 

Reduce food costs and waste by getting the most accurate headcount possible. If you can, have people reserve their food ahead of time, leaving a little extra in case last-minute additions arrive. A limited menu will also help reduce food costs, as you can more easily forecast food costs because of fewer food variables. 

5. Competitive event packages

Venues should craft competitive event packages catering to limited budgets to enhance appeal to potential clients. This could involve reduced pricing for off-peak periods, seasonal menus and special offers/promotions. These strategies are vital to maintaining competitiveness and attracting prospective event bookers by maximizing what they receive with a limited event budget. 

6. Ticketed events

Ticketed events are a simple way for venues to diversify their revenue streams, instead of relying solely on external client bookings. By managing in-house events, venues have ultimate control over pricing and event details, allowing for better cost management and increased revenue potential. Taking this approach not only drives profitability, but also enhances venue occupancy and improves profitability. 

7. Partnerships, collaborations and pop-up events

If ticketed events aren't an option, venues can opt to partner or collaborate with an external events agency, brand, chef or caterer to host a pop-up event. With pop-up events, the external party manages the event details, and the venue simply offers the space and accepts a venue hire fee or percentage of revenue. Without the need to directly manage the event, your team resources are freed up to focus on other additional revenue streams. 

Minimize costs and drive profits with an effective venue and event management platform

The events landscape is evolving, emphasizing sustainability and more memorable unique events, making cost-efficiency a crucial aspect. While the future remains uncertain, it's clear that utilizing venue and event management software is vital for thriving in today's environment and cost-effectively future proofing your organization. 

Ready to save costs and streamline your event operations?  

Contact us today to discover how Momentus can drive profitability for your venue.