New tariffs are affecting food and beverage pricing, audio-visual equipment rental and activity infrastructure.
The 25% tariff on goods in Mexico and Canada came into effect on March 4, prompting Canada to retaliate against US$21 billion tariffs on U.S. imports, including steel and aluminum products, agricultural products, appliances and alcohol. Meanwhile, the Trump administration imposed 10% tariffs on Chinese goods in February, followed by another 10% in March.
Costs of event necessities rise
Tariffs on imported steel, aluminum and wood will increase the cost of booths, stages and other activities infrastructure.
In addition, many audio-visual components (AV) components are imported, so tariffs can increase rental costs for projectors, screens and sound systems.
To cope with these rising costs, planners responded by diversifying their supplier network to include more domestic suppliers. Budget adjustments and contingency planning have also become the standard.
Purchase of preload equipment
AV company stocked up basic equipment at the beginning of this year. “Before the tariffs came into effect, many AV companies went out and bought pre-buyed items. They bought everything they bought throughout the year immediately. Many people will have to use higher prices to offset that cost.”
Typically, AV companies allocate 15-20% of Topline revenue to capital expenditures. This year, Byrne’s company concentrated its spending to the first two months, investing nearly $500,000 early on to avoid higher costs.
Monique Rochard-Marine, head of global business services at Cordis, said AV costs were rising even before tariffs.
“AV companies don’t want to reassure them. We sent them all AV quotes for other hotels with the exact items from the previous year, at least 10% more. I can’t imagine what the new tariffs would bring,” she said. “The only thing we can do is continue to educate our leadership team and advocate for more budgets to help with those extra costs and hope they know our industry is affected like everyone else.”
Contract Challenges and Global Changes
For planners who lock in pre-engagement contracts, adapting to the new cost pattern is difficult.
Eric Burns, chief consultant at Interhouse Solutions, filed an RFP before imposing tariffs on the event later this year. An activity involved participants who assemble computers using materials from China or Canada.
“This is a problem because our offer is based on pre-promotion pricing,” Burns said. “Now, if the program moves forward, we will have to negotiate how to deal with the increased costs.”
Global event procurement becomes more challenging
In addition to direct price increases, tariffs are also reshaping global activity procurement. Some organizations are moving away from the U.S. plan due to political and economic uncertainty.
“The current geopolitical landscape is creating uncertainty, and uncertainty is fixed. It is understandable that organizations are cautious about plans to move forward when the current situation causes people to worry about currency fluctuations, corporate revenues due to fluctuations in the stock market, border concerns and travel visas,” he said.
Since Trump took office, interest in destination procurement for Canadian clients has increased. “We are purchasing programs for our Canadian customers in 2027 and 2028, and they do not include U.S. destinations,” she said.
Canadian demand is affecting prices. “As more groups stay local, interest rates are climbing,” Green said.
