Budget BusinessOctober 12, 2021

Budgeting Strategies Are Fluid Due to the Pandemic By
October 12, 2021

Budget Business

Budgeting Strategies Are Fluid Due to the Pandemic
Lynette Moore, left, director, Quorum, says she is seeing an uptick in bookings for in-person events at the Philadelphia venue. Courtesy photo.

Lynette Moore, left, director, Quorum, says she is seeing an uptick in bookings for in-person events at the Philadelphia venue. Courtesy photo.

It’s been a strange time for corporate meeting planners over the last 18 months, as the meeting cancellations and the transition to virtual and hybrid company events have significantly impacted the corporate meeting landscape, thereby affecting budgets. But as social distancing guidelines have eased and more companies are thinking about getting together in person again, it means planners need to once again rethink how budgets will be affected in 2022.

Latasha Brooks, CEO, Coach Brooks Business Consulting and an event planner who specializes in government and corporate contracts, knows the best way to budget for the future is to think about what has already happened in years prior. “For the year 2022, I plan to handle my meeting budget by reflecting on what was successful in the past, and focusing on room for improvement,” she says. “Organization and transparency are vital. I will be intentional on strategies that produce growth, while at the same time, continuously challenging my areas of development.”

Meredith Smith, principal – Americas at FESTIVE ROAD, a travel and meeting management company, has seen a broad spectrum of clients adjusting budgets due to the pandemic, ranging from zero-based budgeting to a percentage of 2019 pre-pandemic spend, to a percentage increase from 2020. “Many factors influence the budget around the uncertainty of hybrid meeting costs, [and the] continued effectiveness of virtual meetings,” she says. “Ultimately, the budget still resides with the business unit, and there has never been a more important time for the meetings team to engage with the budget owners, to be their trusted partner to discuss options and to enable information to be shared with meetings partners for resourcing and delivery excellence.”

These factors include what is the “new normal,” what attendees should and can expect, what is their appetite to attend, where and how. “The biggest change is the uncertainty and the lack of control over the circumstances that can affect the event even occurring,” Smith says. “Those that have embraced this and moved fast with regaining control by determining the what, how and when on their terms will be slightly ahead of the game as we enter 2022.”

Source images via DepositPhotos.com.

Source images via DepositPhotos.com.

A New Way of Thinking

No matter how many years of experience someone has in the business, almost everyone is thinking about 2022 in a totally new way. For instance, hybrid meetings can cost much more than a virtual or face-to-face meeting. Increasing the budget to include more reach of attendees to do a hybrid meeting is one important area of change. As one CEO of a successful enterprise shared, he’s handling his budget for 2022 meetings by working closely with stakeholders, setting the goals and planning for the meetings. But due to the pandemic, his budgeting strategies for meetings have changed by cutting his meeting budget for food, drinks and entertainment. “Actually, budget allocation is becoming really difficult,” he says. “This is because the time we spent and lost evaluating and tracking individual budgets is high.”

Brooks knows that being stubborn and trying to think in the “old way of doing things” will fail. “First and foremost, the pandemic has taught us to be open to change,” she says. “Therefore, the biggest adjustment in my strategy was mental. I had to learn to pivot and shift my mindset first, before I could successfully apply these strengths to my business model. Then, I could efficiently transition the modifications needed to fit the new mold and customer needs based on the current circumstances of the pandemic. This pivot was vital to the success of my business.” The biggest changes in budgeting currently, she notes, are the electronic conversion and shared data between systems. “You can easily transfer budgeting data between multiple systems and categorize them,” Brooks says. “The efficiency of this advanced technology can minimize the hassle of filing your taxes.”

Mandi Graziano, vice president of global accounts for HPN Global, a venue procurement and meeting management company, and owner, Facetime Coaching Company, has more than 20 years of experience in hospitality and group sales, and deals with corporate planners regularly. She is also very involved in the front-end analysis of meeting costs, so she understands how planners are thinking about budgeting in the upcoming year. “Currently, my clients are evaluating budgets in many different ways,” she says. “We obviously can’t look solely at 2020 because some clients had virtual meetings only, some had hybrids and some did not meet at all. Looking at 2019 is the best measuring stick for now with a plan for growth.”

Also, many of her clients are evaluating what a global meeting looks like vs. a domestic meeting only with a virtual component for global attendees. This has meant strategies are all over the board. “Some clients are planning for regional meetings within drive markets. Some are planning to blow their numbers out of the water,” Graziano says. “Some clients are focusing on customer-facing events, [such as] external meetings, where others are really building their culture and boosting morale with a ‘wow’ in-person live meeting for their employees. It really depends on the industry and the propensity to want to travel and have events within that particular organization. Each organization’s DNA is different.”

Daniela Sawyer, business development strategist for FindPeopleFast, has seen a lot of changes to her corporate meeting structure the past 18 months, and knows that working with a hybrid module will require multiple meetings for team sync, project discussion, client meetings, etc. “We need to procure a separate budget for meetings, which will be for virtual meetings and on-site meetings as well,” she says. “Therefore, we need to spend 10% of our budget on meetings arrangement, software subscription and other things related.”

Michael Hammelburger, CEO of Sales Therapy, helps marketing agencies boost their closing rate by coaching them on game-changing sales strategies, and also advises on the best budgeting practices for meeting planners. “We’ve started incorporating spend management practices consistently in our [financial planning and analysis],” he says. “Spend management involves managing costs related to supply chain, outsourcing and procurement. Whether you are going through cash-flow challenges, or you are facing a potential loss of funds, learning how to reduce your business expenses is vital if you are to survive the storm.” He added that in some instances, a few minor tweaks here and there can help planners minimize their monthly expenditure, while in other cases, they might need to consider other major cost-cutting measures. “We’re more careful with budgeting, but we don’t want to compromise our plans at all.”

Once a planner finishes the budgeting process, one of the biggest mistakes they can make is to file it away, only to pull it out again at the end of the coming year. After all, if there’s one thing that the pandemic has taught us, it’s that anything can happen to change things. If there’s a CFO on the team, they can correctly facilitate an imperative forecasting process that reaches beyond the annual budget and includes more of a three-year plan. This can assist a business to think about future business determinations and goals. Doing this will help observe spending money during the year and help management make important decisions.

Outdoor meetings and events have become more prevalent during the crisis. Photo courtesy of Sarah Haines.

Outdoor meetings and events have become more prevalent during the crisis. Photo courtesy of Sarah Haines.

The View of the Venues

The last 18 months have been a roller coaster of closing spaces, reopening, seeing new bookings, and dealing with cancellations because of new waves of COVID-19. That’s meant the traditional slow time of year has completely changed, and venues need to budget correctly themselves to ensure they have a long future.

Lynette Moore, director, Quorum, at the University City Science Center in Philadelphia, notes the venue is taking a conservative approach on revenue budgeting. However, she is seeing more leads and bookings occurring for spring 2022. “As for expenses, we continue to look at A/V upgrades to adapt to hybrid events and make the user experience in the space as pleasant as possible,” she says. “We have always been flexible and creative in the way we think about convening people. Room layouts, food offerings and set-up take a more creative approach than before.”

The A/V elements and technology have really exploded since the pandemic started. Before it was rare to have meetings that needed video conference capabilities for people to listen to presentations, but now the venue is seeing more hybrid events that attendees not only need to hear, but need to participate and engage with others. “Also, the technology for linking events to virtual health pass wallets [is now a factor],” Moore says. “With more and more companies requiring vaccinations, we are looking into ways to have people register, and be identified as vaccinated, while keeping their information safe and secure.”

While the Science Center is seeing an uptick in clients wanting to schedule in-person meetings at Quorum, there are still a lot of new ways of thinking about running a safe and secure meeting. “We find ways to meet their goals of the meeting and keep everyone safe,” Moore says. “With more events going hybrid, we are finding creative ways to have hybrid meetings in which both people in the room and online will have a great experience.”

Even More Challenges

Despite the uncertainty that still exists with the Delta variant possibly causing more cancellations, COVID-19 issues aren’t the only thing that is impacting budget planning. The biggest challenge Brooks foresees with planning a budget for next year pertains to the additional funding from the federal government within the economy. “Business owners need to be very strategic with staying organized and documenting carefully in the event of an audit,” she says. “Budgeting and organization is even more vital when a federal entity is involved.”

One thing to keep in mind is that there are more eyes on the budget than ever before, and that can create issues when too many people are trying to make decisions. “The C-level suite is more involved in the decision-making process as full financial analysis of items are reviewed now in the site-selection phase, where [before] many items were reviewed more in depth during the planning phases,” Graziano says. “There’s definitely a lot more spreadsheets these days. There are many more people involved in the budgeting process and evaluation earlier in the process at a higher level than ever before.”

Sawyer adds that there’s closer dissection of budgets as well, and every item has to be looked at carefully. “We are considering our present financial situation, present fund condition, upcoming invoices and revenue predictions, along with our business goals,” she says. “As we had faced delayed payment from our clients very often last year, it’s better to keep this in mind and plan primarily according to present funds.”

Another thing to consider with budgets is that hotels that may have been used in the past and available for certain prices, may either no longer be operating due to pandemic pressures, or had to raise prices. “Staffing is a concern at hotels within vendors and on-site,” Graziano says. “Low staff means it may be more expensive. [It’s] tough to budget for this. Also, since it’s many people’s first meeting back, many clients want the meetings to be as high-touch as possible, which physically means more people/staff at the meeting, which has to be budgeted for as well.”

Food and beverage costs are also rising due to supply-chain issues and other seasonal issues. Planning for higher costs, new hotel add-on costs, and unexpected travel-related costs are all factors that planners must consider. “The unknown of everything is the biggest challenge,” Graziano says. “Most of my clients have a plan A, B, C, D and E for everything, and have to be ready to pirouette at any moment based on when travel is booked, the limited number of direct flights, the availability of hotel costs, rising hotel room rates, vendor pricing, etc. Be ready for everything, and add on a buffer to all the budgets to compensate for all the changes.”

For example, transportation seems to be all over the place. At one point during COVID-19, instead of putting everyone in one vehicle, the client had to get four vehicles to adhere to social distancing guidelines. Most planners budgeted for one — not four — but needed to be compliant, and so did what they had to in order to make it work. Things like that need to be considered for 2022 planning purposes.

Los Cabos, pictured, and other destinations have not only been managing the pandemic well, but have also remained open to meetings and events as their economies depend heavily on them.

Los Cabos, pictured, and other destinations have not only been managing the pandemic well, but have also remained open to meetings and events as their economies depend heavily on them.

 Tips for Success

Some of the best tips Graziano offers to those planners considering 2022 budgets now are to plan for expenses to increase due to supply-chain interruptions and shortages, plan for expenses to increases in staffing, and if the plan calls for a hybrid meeting, plan for more expenses. “Doing a face-to-face and virtual at same time will cost almost twice the meeting,” she says. “Estimates are 1.5 [times what an in-person] meeting costs.”

For those who have been successful as planners in the past, budgeting is not intimidating, it requires a strategic plan, utilizing proper resources and staying organized. “To plan accordingly for budgeting, I plan to stay organized throughout the year,” Brooks says. “Being proactive is less stressful than being reactive. Going into the new budgeting year with a plan is key. Knowing your resources and supporting applications helps alleviate stressors.” She suggests adding a cushion to the budget of at least 35% just to be safe.

For Graziano, her advice is to “Communicate, communicate and communicate,” she says. “Be in contact with all your vendors so you know what’s changing and what’s available. Be in contact with your internal teams on the realistic costs and availability.”

For 2022, Smith recommends a bottom-up approach vs. the traditional top-down approach. “Determining why you need to meet, how and who needs to attend, with directionally correct costs based on meeting type ultimately gives you an end figure,” she says. “If you plan to a number, you’re executing events for the sake of meeting that number allocated. This is the time to be applying focus to the effectiveness of the content and ensuring the outcomes of the meeting are achieved.”

Also, for those in charge of meetings at a company, the advice is to engage, talk and have a seat at the table. “Listen and ask really great questions about what meetings need to occur and why,” Smith says. “It’s also OK to ask the tough questions, like ‘Is the budget decision coming from the leaders, or can it be developed by the individual in charge?’ ‘How can we maintain the positive outcome the pandemic has had on the dramatic decrease in carbon emissions?’ or ‘Can we rethink how we execute meetings?’ The answers to all these questions will affect both the budget and actuals.”

And most importantly for any planner, if you want to have a meeting in the future — and are sure you can do it — book it now. Availability is going to continue to be scarce in 2022, 2023 and 2024 due to the amount of programs that have been lifted and shifted out of 2020 and 2021. “If you have a bucket-list location you’ve always wanted to go to, make that list; book it now,” Graziano says. “It’s possible to get better packages now to the end of 2021 for future years. But, be OK to consider something new — a new city; a new way of doing your meeting. Being flexible is the name of the game.”   C&IT

Back To Top