What are some of the biggest budget challenges facing meeting professionals today, and how are they coping? Here’s some expert opinions and, even better, some advice from the meeting planning and hospitality trenches.

Challenge 1: Hyper focus on expense management and budget cutting

Why is this a problem? Bill Reed, chief event strategy officer for the American Society of Hematology, said during a recent Professional Convention Management Association (PCMA) webinar, “If we only focus on addressing the expense side of the ledger, we in essence turn many of our events into the equivalent of a budget-category airline” where it may get you where you need to go, but it’s a pretty joyless drudge of a ride. When you cut your way to profitability, you’re basically teaching your marketplace to stay home, Reed said.

Solution: As planners did during and after the pandemic, keep your focus on being prudent in the short term — and use it as an opportunity to lose some of those low-value, high-cost sacred cows — but also look at ways to grow revenues to counterbalance the cost increases. This even could mean, for associations, to (gulp) consider raising registration rates, which have not been keeping pace with cost increases. Be sure to explain to all your stakeholders about today’s realities when it comes to labor, food and beverage and other related costs so no one is surprised when they see the proposed budget — and keep them up to date on how, for example, labor rates compare in different destinations under discussion. Also, talk to your hotel partner about what they can do to help, said panelist Alexandra LaLoggia, area director of sales and marketing with InterContinental Chicago, who also supports the sales efforts at the Kimpton Journeyman Milwaukee and Kimpton Gray Chicago. You may be able to get concessions if you can be more flexible, for example by bringing the option of a multi-year contract.

It really helps to understand the business models of the vendor community, added Reed. “I don’t know that we are doing a good enough job about asking questions to better understand what impacts their financials to the same degree that they’re asking us about our financials.” This is especially important in current hospitality market which, while improving, still is lagging in key areas, especially for properties and destinations that rely on on the international market, said panelist Isaac J. Collazo, vice president, STR Inc., a division of CoStar Group that provides market data on the hotel industry worldwide, including supply and demand and market share data.

Challenge 2: Managing expectations

Everyone wants to out-perform what they did for the last meeting, to make it bigger, more spectacular than ever. But unfortunately, that sometimes can lead to over-promising and under-delivering, which again just teaches attendees to stay home.

Solution: Flip that and under-promise and over-deliver, Reed suggested. “Lowering expectations is not a bad idea right now. If you’re realistic on what is possible, and if you can over-perform on that, no one is going to complain.” Another solution: Think meatballs versus lamb chops, meaning look for places you can make incremental cuts that no one will really notice, suggested Reed. Two years from now, will anyone really remember or care that you had meatballs instead of more-expensive cuts of meat? Probably not.

Challenge 3: Knowing how to pick your battles

Today’s tough financial environment makes pricing discussions with key stakeholders more difficult. Hoteliers in particular say they are getting so beat up over pricing that it’s hard to have a productive conversation, especially now that their margins are razor-thin and they may not have a lot of flexibility in some areas.

Solution: Planners may be feeling pressured to be able to swoop in to fix any and every budget woe, but the reality is that no one person can fight every battle equally. Be mindful of the big picture so you can set priorities and know when it’s worth the effort to put on your full budget-busting superhero cape. “Honestly, it’s about overall perceived value of the whole package, not just the rate,” said LaLoggia. From the hotel’s perspective, “We  want to make sure that everyone fully understands what they’re going to get when they come to the hotel, what overall value they receive by choosing our hotel.” Reed added, “Don’t cash in all your negotiating chips on things that could have been avoided, like if one of your internal stakeholders forgot to budget for AV. Save them for what really matters to achieving the primary objectives of your overall event. There’s nothing wrong with someone having to learn a lesson. Be realistic and work together to find solutions that will work for everyone.”

Challenge 4: Managing the reality of declining international attendance

Some planners, especially those who plan for medical, scientific and academic organizations, are facing significant drops in international attendance due to a variety of political and economic realities.

Solution: Remember that one month, one quarter, or even one year does not necessarily make for a long-term trend. “You want to be able to manage your loss without over-correcting,” said Reed. Identify the off-ramps in your existing venue, AV and other contracts — cut-off dates, attrition rates, cancellation dates, etc. — and look at whether you can reduce or maybe postpone if you have flexibility with rates and pattern until you have a better idea of what the new normal may look like longer term, he suggested. Don’t overreact but do talk to your hotel to see if you can adjust room blocks for close-in programs you know are likely to take a hit in international attendance.

Also, don’t treat your international contingent as if they were a one-size-fits-all t-shirt. For example, attendees coming to a U.S. meeting who come from visa-waiver countries versus those who come from non-visa waiver countries, where you’re more likely to lose attendance. Consider creating campaigns to build attendance for places like Europe or Canada, for example. Also, Reed suggested registering with the U.S. Department of State. If they know who’s coming from which countries, they can align their resources in their consulates and embassies to handle the influx of people seeking a visa in that country to go to your meeting.

A lot of budget woes boil down to how to diplomatically, yet effectively, communicate budget challenges with stakeholders. To boil it down to a bullet list:

• Start early with education: Begin communicating market trends and cost drivers well before budget season. Share insights about labor costs, location-specific expenses, and economic factors.
• Be transparent and provide context: Explain why costs are increasing by sharing specific data about inflation, labor rates, and industry-wide challenges.
• Use scenario budgeting: Develop multiple budget scenarios (e.g., 15% or 30% attendance variations) to help stakeholders understand potential financial impacts.
• Create regular updates: Provide weekly dashboards or updates that track conference metrics, ensuring no surprises for board members or leadership.
• Focus on value: Emphasize the importance of maintaining event quality while making strategic, incremental cost reductions.
• Be proactive: Share articles, market reports and insights that help stakeholders understand the broader economic context driving price increases.

The key is to educate continuously, be transparent about challenges, and demonstrate a strategic approach to managing costs while maintaining event value.

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