Recession is a dirty 9-letter word. No one likes a recession and almost everyone is negatively impacted by it. But a brief look back at history suggests the event industry gets a particularly brutal beating when the economy struggles. That’s because as companies learn they need to tighten budgets, business travel and conferences are usually the first to be cut.
Inflation, Supply Chain, and Labor Shortages Oh My!
As event planners, we may all want to ignore the looming recession. We may want to continue to bask in the glorious fact that after two long years of planning through and around Covid lockdowns, we are finally back in business and back to in-person events. But keeping our heads in the sand will not prepare us for the next battle.
The truth is analysts from Deutsche Bank, J.P. Morgan, and RBC have been warning us since early April that a recession will most likely hit sometime in 2023. And while we’re waiting for that, we’re currently dealing with three other formidable foes.
- Soaring Inflation
We are witnessing in real time the cost of just about everything skyrocket. This includes fuel prices. As most of us know, corporate travel is a discretionary spend and most organizations are once again reviewing their travel policy after having just relaxed it. The cost of food is also going up, which will have big implications for catering menus. While planners need to prepare for a possible recession in the future, they need to start managing costs NOW.
- Supply Chain Issues
Empty store shelves are becoming more common place. Small business owners are struggling to find suppliers who can meet their needs. And event planners find themselves in the middle, wondering how to plan with such uncertainty.
- Labor Shortages
A tight labor market is causing wage prices to skyrocket, adding costs onto an already sagging budget sheet.
Tips for Managing Costs and Preparing for a Slowdown
So how can event planners deal with current costs and supply chain issues while also planning for a possible recession in 2023?
Rethink Profit Expectations
Organizations may need to sacrifice some up-front profits in order to hang onto employees. Think long-term revenue, not short-term.
Invest More in Marketing
It seems counterintuitive, but with so many companies tightening their own budgets, planners will need to increase their marketing and sales efforts to convince people to come to their events.
If there’s one skill event planner gained over the past two years it’s agility. Now is not the time to slack off. Remain agile so you can overcome these new challenges.
If inflation continues to cause food prices to soar, how can you alter your catering menu? If transportation prices remain high, how can you mitigate these costs? Perhaps by selecting hotels that are closer to the main venue? By keeping incentive trips domestic this year?
Adopt Asynchronous Hybrid Events
Something many of us learned during Covid was that asynchronous hybrid events give you the most bang for your buck, and you need less bucks! While these events take a bit more work, you can dramatically cut on-site costs.
There has been a big push over the last few years for planners to adopt a more sustainable approach to their events. While certain aspects of green events may have initial higher upfront costs, overall you should be able to reduce event costs by leveraging the efficiency that sustainable events are known for. As an added bonus, you will give your brand a boost as the majority of people these days demand brands go green. Planning a sustainable event could potentially draw a bigger crowd.
Many event planners are feeling weary at this point. Just when we thought we were out of troubled waters, here comes another crisis. But the thing to remember is, what does not kill us makes our events more profitable, or something to that effect. These crises force event planners to remain creative and agile. Those who do will rise to the top and come out way ahead.
If you need any help navigating the current (and future) economic crunch, please reach out to us. Often working with professional planners can help you find ways to give attendees a memorable experience on a tighter budget.
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J.Shay Team is the generic alias for our event staff that want to submit work anonymously.