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Budgeting for food and beverage (F&B) is a crucial aspect that can significantly impact an event’s overall success. While planners meticulously outline expenses to ensure everything runs smoothly, hidden charges often lurk beneath the surface, threatening to derail carefully crafted budgets, especially when prices for almost everything are on the rise.

Hidden charges in F&B services are not just minor inconveniences; they can dramatically affect the final bill and a planner’s overall budget for an event. These unexpected costs can range from service fees and gratuities to corkage and cake-cutting charges, each adding up to a substantial sum that can catch even the most seasoned planners off guard. These charges are often buried deep in contracts or mentioned in fine print and can vary widely depending on the venue and the service provider, making it challenging to predict and manage.

Understanding and anticipating hidden charges is essential for accurate budgeting for your events. Let’s look at potential hidden charges event planners may encounter and strategies for identifying and avoiding these charges.

Common Types of Hidden Charges in F&B

While event planners may be able to estimate their F&B budget based on how many attendees the event will have, several variables can throw that budget off track. “As planners, we like to control everything, and we’re usually on top of all the details. But food and beverage is the one thing you really don’t have a lot of control over,” says Barbara Gould, CMP, senior marketing and events specialist for The Alliance in Madison, WI.

Here are a few hidden charges in F&B that can surpass your budget limits:

Bartender or Chef Attendant Fees

Reggie Driscoll, CMP, senior meeting professional with the State Bar of Wisconsin and president of the Wisconsin Chapter of Meeting Professionals International (MPI), says the most common hidden charges he has encountered when planning events are bartender or chef attendant fees. These fees are incurred when bartenders or chefs serve drinks or prepare food at your event. Fees are usually charged per hour, but that varies depending on the venue.

Some venues also require one bartender per a certain number of people. “You could be budgeting $150 for a bartender or attendant, then find out that the policy requires one bartender per 50 people,” Driscoll says. “You could be paying for three or four bartenders when you’ve only budgeted for one.”

Gould says planners should also be wary of hidden bartender charges when hosting an open bar. “If you don’t have enough in sales for that evening, you don’t hit a minimum, they’re going to charge you for the bartender on top of whatever the beverages cost.”

Taxes and Gratuity

Oftentimes, the menus a venue presents to a planner for an event don’t include costs for taxes, service fees and gratuity. Alison Huber, CMP, senior manager of travel and events for Baker Tilly in Madison, WI, says, “We have recently seen service fees as high as 31% and taxes as high as 10%. For example, a breakfast buffet at a high-end Las Vegas resort is listed at $72, which becomes $98 after tax and service. Not factoring this in will have a significant budget impact.”

 Corkage Fees

If you think you can save money by bringing your own alcohol to an event, think again. That may not be the case. Some venues charge a corkage fee for serving guest-provided alcohol to cover costs such as storing, serving, using venue glassware and disposing of it.

Cutting Fees

Cutting fees are also known as cake-cutting fees because they are fees a venue charges if you bring your own cake or other dessert to the venue. However, these fees can apply to things other than cake. Gould recalls a meeting she planned in the Chicago area where she considered bringing in Chicago-style pizzas from one of the popular pizza joints. The hotel didn’t have a problem with her bringing in the pies, but they reminded her that they would charge a cutting fee for doing so.

“Anything that you’re bringing in that’s not coming from their kitchen, they’re usually going to tack on a fee,” Gould says.

Security

Facilities may also charge fees for security provided at events. “These (fees) may not show up on your catering event orders but will be added to the meeting space rental,” Driscoll says. “Many times, these charges are not seen until the invoice appears.”

Huber says she has also seen fees charged at larger events for fire marshal room diagrams.

Not Meeting Minimums

Another potential pitfall is not meeting the minimum F&B bill for the event, which can result in additional charges. “You may have 16 people, but your lunch event has a minimum of 25, so you’ll end up paying for the additional lunches,” Driscoll says.

“Sometimes, you don’t pay a meeting room fee, but you have a food and beverage minimum or vice versa,” Gould says. “Not every contract has food and beverage minimums, and sometimes you can negotiate those out.”

Administrative Fees and Service Charges

Many venues will also charge administration and service fees to cover their administrative and labor costs during the event. These fees are typically a percentage of the total F&B costs for the event, and those costs may be hidden in the fine print of the contract.

“I was just looking at a hotel that I used to do business with in the Chicago suburbs, and they have a 3% admin fee,” Gould says. “If you don’t read the fine print, you wouldn’t know, and if you’re doing food and beverage for a lot of people, that really adds up quick and can bust your budget.”

For a recent event Gould held at Loews Chicago O’Hare Hotel, the fine print detailing the hotel’s fees reads: “All food and beverage pricing is per person and subject to a 22% taxable service charge, 3% taxable administration fee and 11.25% sales tax.”

Increase in Menu Prices

There is also the chance that the menu you ordered may increase in price by the time your event is held. More venues are adding language in their contracts that states they don’t guarantee prices or availability of their menu items, Gould says. The fine print on the Loews Chicago O’Hare Hotel states, “All prices subject to change without notification. Menus are subject to change based on seasonality and product availability.

“Every venue is different, and even from meeting to meeting, they can update their policies and change things,” Gould says. “With the venues I’ve been working with in Madison, the prices seem to be going up every six months because that’s the economy right now.”

“In today’s environment, budgets are tight and may be planned well in advance,” Huber says. “When it comes time to work on logistics with the venue, prices have jumped from initial plans and planners are having to find ways to reduce in other areas to provide meals and snacks that fit their goals.”

Driscoll says he usually includes a contract addendum for prospective facilities before signing a final contract that states, “There shall be no additional mandatory charges added to any invoice if not specifically set forth here in this contract. The facility shall not charge or post to any charges or master account any amount except what is agreed to and signed by both parties in advance of, or set forth in this agreement.”

Strategies to Address Hidden Charges

Planners can take steps to prevent hidden F&B charges and address them if they do show up on the final bill. Here are a few strategies to address hidden charges for F&B services:

Review Contracts Thoroughly

To minimize hidden charges in F&B for events, it is essential to thoroughly read and understand contracts, including the fine print, before signing. “You can’t just gloss over and sign at the bottom line,” Gould says. “The terms and conditions in the fine print of the contract are super important because they tell you things that are going to be charged like the service fees and the tax.”

Huber says she asks the venue to have all the fees spelled out in the contract from the start. “If they are not, we ensure we have introductory calls with our vendor partners to get a listing of all fees, preferably in writing.”

Track Expenditures

Tracking your expenditures and taking inventory of F&B items throughout your event is a wise practice. This approach helps you identify any discrepancies in consumption, allowing for better planning and budgeting for future events.

“It is good practice to review billing onsite daily,” Huber says. “It is easier to discuss in real time rather than 30 days later when everyone is on to the next program.”

“I always get a history from the venue after the meeting to know how much I went through,” says Gould. “Did I have to order more coffee onsite? Did I have to order more brownies? Then, I  track that over time so that I can see a pattern, and ordering becomes more spot on as time goes on.”

Huber and Driscoll use spreadsheets to keep track of catering costs for their events. Driscoll says he uses a spreadsheet to compare budgeted costs to actual. “You can see on this spreadsheet where any unexpected charges from the previous year popped up,” he says.

Ask Questions

Don’t assume anything when planning F&B for an event, says Gould. Planners should ask the venue directly about what they offer and the costs. “Don’t assume linen and tableware are included. Don’t assume set up and tear down is included,” she said.

Some key questions Huber asks F&B vendors include:

• What additional fees should I anticipate? (Some potential items could be attendant, bartender or set-up fees, a fire marshal diagram fee, permits or small group fees.)
• Are any items, such as liquor, taxed differently?
• Are there options for us to avoid these fees, such as sharing menus with other groups, reusing a room for another purpose, etc.?

“It is helpful to just ask about charges straight out before contracting with a facility,” Driscoll says. “Keep asking until you get a cost or minimum for each and every item. If the facility isn’t open to providing these costs right away, this should be a red flag.”

Consult With Other Planners

Other event planners can be a great resource for finding out about a venue and their potential hidden costs. “If you are in MPI or another association, ask around for any other members who have had an event at the facility,” Driscoll says. “You can also see if anyone you know has worked at the facility and what they have experienced.”

Negotiate

When it comes to F&B contracts, everything is negotiable, says Gould. For one event she organized, she says the conference service manager was able to help her meet her F&B budget by suggesting cutting out dessert items, which are usually left over. “The catering menus they send you may not fit your needs, but what they send you isn’t necessarily all they can offer. So talk with the venue about what your budget limits are and have them help you customize something that’s a win-win.”

Navigating the complexities of budgeting for F&B services in event planning requires a keen eye for detail and proactive measures to avoid hidden charges. With rising costs and unpredictable expenses planners must remain vigilant, thoroughly reviewing contracts, tracking expenditures and asking pertinent questions to ensure no surprises disrupt their planned budget.

“You always want to be looking out for the win-win so that it’s good for your organization, but it’s also good for the venue. You’re kind of partners in it together,” says Gould. “Everybody wants (the event) to be a success. They’re not trying to nickel-and-dime you for the sake of it because they want your business back as well.” C&IT