As well as dealing with a couple of thousand e-mails per day and holding a phone in one hand and a chequebook in the other, balancing budgets can be the toughest challenge for any event planner.
While no one disputes the importance of local, regional and international meetings, other factors like finding skilled staff and covering increasing rent costs can put a squeeze on the amount of cash available to event planners.
An experienced and trained meeting planner and a creative supplier can do wonders to a budget
International polls show that the amount of cash put aside for meetings and events varies according to the nature of the function.
The American Express and Meeting Professionals International Future Watch 2008: a comparative outlook on the global business of meetings survey found that association planners predicted a 9.3% decrease in meetings budgets, while corporate planners believed that they would see a 27% increase in their meetings budget.
But whether the trend is up or down for planners around the world , budgets still need to be managed.
For TraVision Inc. group president Bicky Carlra, budget management is all about making sure that the right person is doing the job: "As the spend of any corporate grows, it is critical to recruit professionals in-house to manage meetings/incentives - even if they still deploy a travel management company (TMC) or a professional meetings company to implement the same - thus using in-house expertise and a TMC's buying power," he explains.
This will cut some of the unnecessary margins added. An experienced and trained meeting planner and a creative supplier can do wonders to a budget.
But planners should consider the profit strategy of the TMC or event organizer before they select one. There is no motivation for an agency to reduce cost if they earn their revenues from a commission on the total budget.
With a cost-plus structure you are aware of the real cost and management fee paid, which is based on the value addition the agency/TMC/professional congress organiser brings to the table.
Accommodation and venue are generally the highest cost factor of any event, but a little flexibility goes a long way toward reducing the cost of a meeting, particularly in high-cost Grade A cities.
Companies may still try to focus on tier-one cities or cities that have special interest to their groups, but it's getting harder, as room rates have climbed 20-30% in the past year and there seems to be no low season anymore for cities like Dubai. Things have changed now; it’s the other way round.
The easier solution is of course to go to second- or third-tier destinations, where rates are lower and there is availability. However we all know business-meeting attendance can drop significantly, especially with incentives, if the destination is not right, as it plays a critical role in drawing the right people, off course entertainment is also considered a vital element.
One solution is to choose four-star accommodation for delegates and hold meetings or gala dinners in a superior venue.
The other way is to use the twin city advantage, recommends Imran.
Other factors such as hotel or transport options can also have a considerable impact on costs: "A lot of the time you find cheaper hotels in the city, one of the reasons being you hardly find any three or four star hotels on the beach. If you go to the city you have much more choice in the three and four-star category. Over the years companies have been widely dependant on the Far Eastern region for those reasons, where you can find hotels on the beach of the same category.
Also there are a lot of periods where the beach is full but the city is not, Imran says.
You can find that one particular venue - one room in one hotel on one day - will be able to charge more on that particular day for whatever reason, so by switching to another place it can be cheaper.
Imran also warns against using the hotel group's event planning department to organise a multi-day itinerary, since venue and F&B options will be limited to facilities managed by or partnered with that group. You may face this in many cities.
"When the client wants something cheaper we can come up with alternatives; it can be a cheaper dinner menu, cheaper mode of transport," according to Imran.
Does everyone need private cars or can you put several people in one car or bus, or can you find a cheaper venue? It is value for money even though it is a lot of money, especially in Europe.
And the money dedicated to certain aspects of an event is not always money well spent: "One last tip that I see all the time is wastage of food and beverage during meetings,"
"Free flowing food, water, tea/coffee or premium beverage can add to the cost in a big way, however, if served during fixed breaks, brings down the cost significantly. Depending on the type of delegates, if the attendees can't tell the difference between standard and premium beverages, I suggest don't invest in the premium!
Last but not the least corporate often think that have done so many meetings they can still handle the next one, i advice they are mistaken. Let the Travel Management Company (TMC) do their job. They have the updates, they are familiar with the destination or else I would say choose a good Travel management company though.
The next very imperative element is the budgeting, kindly consult the TMC when it comes to budgeting. Normally companies take the last year’s expenditure as a benchmark and enhance it with some percentage, where as talking in real terms the air fares goes up every forth month and so are hotels with their activities and periods of fairs and exhibitions. Ever since the world has transformed into global village, people have starting to converge on those points. Visas are again the third world countries problem. So coming back to the point of setting standards for your planning I would suggest to pay attention to four components, they are as follows:
- Choice of Hotel
- Venue for Meeting & Conference
- Price of Air fare
- Visa
