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Budgets are a perennial issue for meeting planners and the companies they work for. But in this post-pandemic era and current period of significantly increased costs of critical meeting elements, budgets may be even more challenging for planners. Adding to the challenge is that while prices have definitely increased, many corporate budgets have remained stagnant.

Steve Bova, CAE, executive director of Financial & Insurance Conference Professionals (FICP), offers insights into what, exactly, is happening right now related to meetings and budgets.

“Meetings and everything else today are more expensive because of higher than typical inflation everywhere around the globe. Goods and services are always getting more expensive, even when there’s low inflation, but we feel the pinch more when inflation is higher than ‘normal’ (i.e., above 2%). Everything is up — from airfares to Uber rides, to hotel rooms, to F&B and especially AV, not to mention labor and benefits costs.”

A 2023 FICP Industry and Perception study shined a light on where hospitality partners (HPs) predict increases of more than 15%.

• Staffing and labor costs (41% of HPs)
• Room rates (39% of HPs)
• Food and beverage costs (37% of HPs)
• AV costs (25% of HPs)

In fact, all of the planners we talked to are seeing exactly those same increases as the most problematic. Knowing that costs generally increase, Bova says, “Expenses need to be put into the context of growth and impact, whether revenue, meeting attendance, number of meetings, length of stay or multiple other factors. Additionally, what goes up does not necessarily come down, and deflation, or decreasing costs, are not necessarily good.”

And sometimes — like now — he points out, “It’s the anticipation, uncertainty and conservative approach to running a company that has many companies dialing back. More frequently, I hear FICP’s planner members say they are having to tighten their budget belts. This is not only related to increasing costs but also to the fact that companies, especially large public ones, must perform to the expectation of their ownership or shareholders.”

Bova cautions that it’s important to look at the full context of a business — the bigger picture — and not just the budget for a particular program or event. What are the business’s priorities? Is the company willing to spend more to grow? If so, in what areas? If not, why not? “This is why it is so important for meetings professionals to have a seat at the table and have a voice on what is happening around them that impacts the company and its priorities,” he says.

One tricky area in particular is site selection, in part because it’s a bit of a guessing game. “There’s a lag with site selection,” Bova notes. “Decisions are made today in anticipation of what the future might look like. Although meeting times are generally shorter today than in the past, many events are still booked well before the budget is established — or assumptions must be made based on trends and speculation. The current budget, in many ways, is a prediction. That’s why conversations need to happen throughout the year to ensure the company’s goals are being met.”

With shorter booking windows the norm, and a challenge throughout the meetings industry, the 2023 FICP Industry and Perception Study looked and found that the majority of financial and insurance meetings and events are being planned six to 12 months out (52.9%), with 22% of events being planned less than six months out. However, availability is expected to decrease, with one out of three HPs noting a significant decrease in availability through December 2024.

Bova notes that the word ‘budget’ itself is a buzz word that never goes away, regardless of the time. “This topic has been the highlight of education programs for as long as I’ve been in the business. I’d like to challenge the emphasis on budget and instead question how the work meeting professionals contribute to achieving corporate priorities, elevating performance and growing the bottom line.

“If meetings are a key driver for the business, as we know they are, then I would make the argument to fight like hell to make sure the appropriate funding is approved to accomplish the business objectives. Although the meetings’ budgets are a fraction of the overall company budget, it’s important to know how the budget contributes to the overall business goals. At the end of the day, it takes money to make money.”

Emily Fletcher, CLU, CLF, FLMI, AIRC, ARA, PCS, director of sales and promotions with Southern Farm Bureau Life Insurance in Jackson, MS, says many of her meetings are held in the company’s home office, which can help reduce some costs.

“This allows us to control venue, AV and F&B costs,” says Fletcher. “We have local restaurants and hotels who offer us an incredible room rate and F&B options, so we haven’t seen much of an increase in these areas.”

But that only helps so much. “The biggest change to our budget for meetings has been the increased cost of speaker fees,” she says. “Whereas we used to find a speaker in the $7,500 to $10,000 range, we’re now seeing these prices start between $10,000 and $15,000. If the speakers have any type of celebrity status, whether sport, social media, military, etc., they’re starting at $20,000 or higher.”

Additionally, Fletcher lists F&B, room rates and AV as the costs that have increased the most for her meetings. In terms of incentive programs, she says the budget has changed significantly since 2020.

“Room rates and F&B have had the biggest impact on our budget,” says Fletcher. “We take 3,000 to 4,000 people, depending on the requirements set and location offered, which makes a huge impact when F&B has increased 35% or more in the last three years. We offer breakfast each day as well as a welcome dinner. The budget hinders our creativity with our menu, as well as offering fun items for our kids who attend the July family program. Creating a menu for this many people is already challenging, but the lack of flexibility within our budget makes it extremely difficult.”

Adding to the challenge, the number of qualifiers has also increased since 2019. “Our biggest unexpected change is our increased number of qualifiers. For our family trip, we went from 750 qualifiers in 2019 to 1007 in 2023. We’ve had to add a third wave to each destination or another property to accommodate all our qualifiers. Currently, we’re reviewing all requirements and discounts for our incentives trips to help alleviate costs,” says Fletcher.

All of this has an impact on the team planning and executing the meetings and incentive programs. Efficiency is the biggest effect the increased budget is having on her team, she says. Instead of having the creativity to plan their menus and entertainment, they’re having to make multiple changes and have numerous calls with the DMC to cut and revise the budget as much as possible.

In the past, Fletcher says, “It would take two to three months to source a DMC company and plan our welcome dinner entertainment. This is now taking six months or longer because we have to negotiate back and forth on prices, activities, etc. Our team discusses in depth whether the expense incurred has a true impact on the experience of the event. If so, we keep the expense and understand we must then find other ways to cut costs.”

They only want to cut what the qualifiers won’t notice, says Fletcher. They’ve found they were spending money on items or situations that weren’t as important. Sending a post-event survey has helped them to collect this information. The events team also has a great relationship with their agency force, which allows an open line of communication to receive feedback.

One positive, Fletcher notes, is that the company executives are listening to the team’s concerns. “They see the impact the increased prices are having on our incentive programs. We meet with them on a regular basis and provide budgets and historical data to communicate our concerns. Even though it’s highly discussed that we’re to be as budget conscious as possible, our executives don’t want to compromise the integrity of the trip by cutting costs. They’ve given us permission to continue sourcing locations as we have in the past.”

Ohio-based Ann M. Luketic, CMP, CMM, agency marketing specialist with Progressive Casualty Insurance Company, agrees that budgets remain a persistent challenge for planners, who are tasked with achieving equal or greater results with budgets that have remained stagnant for the past three to five years.

“The escalating expenses associated with travel, food and beverage, and labor have compounded the difficulty of meeting budgetary goals,” says Luketic, adding, budget challenges have affected all aspects of meetings, creating the need to thoroughly evaluate the choice of meeting venues and timing throughout the year.

And like others, she says incentive programs have undergone significant changes. “While I haven’t observed a direct impact on my incentive destinations, I have noticed planners shifting more events back to the United States, thereby constraining hotel availability.”

Luketic lists flights, F&B and labor costs as the top three meeting components that have increased the most, and says she’s been able to anticipate some budget adjustments, particularly with the rising costs of certain aspects such as travel and accommodations.

“There have been unexpected changes, such as fluctuations in demand for certain destinations and services, which have required adaptation and flexibility in our planning strategies,” says Luketic. “My primary budget concern revolves around managing the increasing costs of essential elements such as venue rentals, food and beverage, and accommodation, while still delivering high-quality experiences for our events within the constraints of allocated budgets.”

She adds that navigating unforeseen economic shifts or industry changes that could impact budgetary planning is also a key concern. She has had to make some tough choices. This has included having to scale back or remove some of the additional embellishments for their events. “Planning has required an earlier start, and I’ve found myself engaging in challenging discussions with vendors about unexpectedly high costs,” she says.

To offset some of the challenges, Luketic says she secures her venues well in advance, negotiates discounts or fixed rates for food and beverage, as well as for hotel expenses.

It’s not just individual financial and insurance planners who are dealing with the effects of increased pricing and industry changes. Barb Feds, senior director, strategic meetings operations with AMEX GBT Meetings & Events, has worked on many events for the financial industry. She lists lodging, F&B and AV as the top three elements that have increased the most in price.

Additionally, she says, sustainability policies also impact meetings and incentive programs of all kinds. “Budgets are often focused on CO2 emissions rather than finances. Teams allotted CO2 budgets can determine when and where meetings take place. And more careful consideration is put into selecting the location for meetings — taking into account the carbon footprint of attendees’ journeys and their modes of transport.”

For this year, Feds says the significant mark-up of guest room rates and venue hire in first-tier cities is a primary budget concern. “These cities are often the ideal location for the meeting, so it’s a budgetary challenge when and if the client can’t increase their budget. They may even cancel the meeting.”

For meetings with these kinds of budget restraints, Feds says her team can usually find suitable lower-cost hotels that still offer decent quality guest rooms, meeting spaces and F&B. But it does mean there are less options available. “Sourcing and planning can take longer. Planners should anticipate this and try to secure longer lead times,” she says.

Her go-to strategies include making sure companies and those in charge of the budgets are aware of the year-over-year cost increases across different elements of a meeting or event prior to making a final decision.

“Depending upon the agenda and venue, we suggest having a dinner or two onsite to help with the F&B minimum, to avoid fully paying the minimum and restaurant costs on top of that,” says Feds.

Other F&B strategies include eliminating the food during the evening break and serving the lunch dessert instead. “It’s also key to provide alternative options to the planners and companies we work with, options that still meet the needs of their budget and their program,” she adds.

There’s no one-size-fits-all solution for effectively dealing with dual challenge of increased prices and stagnant budgets, which are concerns for planners across the meeting spectrum. Financial and insurance companies are no exception, and planners for these companies often have to be particularly careful about costs.

FICP is an excellent resource for planners in the insurance and financial spaces. To learn more about the results of FICP studies, visit ficpnet.com/Education-Resources/Industry-Research. I&FMM.