Unexpected added costs when planning an event

added costsAt one point in every event planner’s career, there has been the situation of receiving a final invoice from a venue with added costs that were never included in the budget. This refers to power costs, internet costs, extra catering labour costs, and so on. This is especially problematic when a third party such as a DMC has given an inclusive price to the client and must absorb the extra costs or an in-house planner must go back to their client and advise them the costs are unexpectedly higher.

Why does this happen and how can this be avoided? First of all, it is a matter of educating the venues on how the budgets are prepared. As a third-party planner, I always advise the venue that I am submitting a budget to my client that must include ALL potential costs, including power, security, cleaning, set up and tear down.

The venue needs to advise which costs are fixed and which are variable. Security, for example, would be a variable cost as the final price would depend on when the event ends. If the guests are enjoying themselves and the client/planner approves a later closing time, then additional costs will apply, such as for security, beverages, catering labour costs, entertainment costs, and so on.

When submitting a budget to a client, I always indicate which are fixed costs and for those that are estimates that may increase, I also include their hourly costs. I review the budget with the client and discuss the possibility of additional charges so that the client is well informed as to the possibility that the budget may increase.

added costs

For host bar costs, there are venues that quote a per-person price, regardless of the amount consumed. This is especially advantageous when producing a charity event with a reception, dinner and an after party. You know what the costs will be upfront and can adjust the admission ticket accordingly. The other option is being invoiced based on consumption, at which time I advise the client that the cost is an estimate only. For a standard one-hour reception and seated dinner, I usually estimate two drinks for the reception and half a bottle of wine per person, unless the client advises me that they are large consumers.

If the client is very budget-conscious, I ask the venue to give me notice if we are reaching the estimated budget of wine with dinner. We can then slow down the pouring of wine. Another recommendation is to pour one glass when the guests sit down and then return to pour a second glass but not keep continuing to pour unless requested by the guest.

About the author:

Roni Feldman has been involved in the meeting and special event industry since 1979. She is President of Roni Feldman & Associates Inc. which provides a wide variety of services to the hospitality industry including conference and special event management, marketing, training and education programs. Roni Feldman holds the Certified Meeting Professional (CMP) designation, the Destination Management Certified Professions (DMCP) designation and the Certified Incentive Specialist (CIS) designation. These certification programs are only available to senior industry professionals who qualify and they were developed to define a high standard of proficiency in meeting management. In addition, Roni Feldman is the only planner in Canada who holds these certifications as well as a professional degree and experience in the areas of theatre and film production. This knowledge and experience provides a unique perspective on all aspects of meeting and event management. Roni continues to be in demand nationally and internationally as an instructor and workshop leader. She has been involved in the CMP study groups and has been a guest speaker at two of Meeting Professionals International (MPI) Professional Education Conferences, MPI’s first Canadian Educational Institute I & II as well as several of the Toronto Chapter monthly MPI and Professional Convention Management Association (PCMA) meetings; the Canadian Society of Association Executives; and the Life Insurance Management Research Association's Annual Conference. Roni spoke at the 16th International Meetings & Incentives Conference in Greece on Partnerships and was asked to address a group of DMC’s in Lisbon on selling and servicing the North American Market. Roni was asked in 1994 to serve as a member of the task force set up by the Ontario Tourism Education Council to establish and validate Standards for the Special Events Industry across Canada. Roni was also chosen to be included in the Nationwide Register’s Who’s Who in Executives and Business in recognition of achieving a level of recognizable success in their respective field. In 2012, Roni was inducted into the M+IT (Meetings and Incentive Travel) Hall of Fame with the Industry Veteran Award. THE INDUSTRY VETERAN AWARD recognizes a planner or supplier who has, during a long career, distinguished themselves by demonstrating leadership and innovation in all facets of their own job and the industry as a whole.

Venue & Supplier Profiles