In the current economic environment, business activity planners face huge cost pressures.
“Event execution in nearly every category, including F&B, AV, staffing, room barriers and production, is 38% realistic, and is real,” said Nicola Kastner, CEO of Exchange, event leader Exchange.
The impact of tariffs
Shawn Pierce, president of MCI’s U.S. Strategic Events, Conferences and Incentives, said tariffs and inflation quietly drive the expenses of every event detail from lanyards to live streaming. This puts pressure on planners, whose client budgets are not keeping pace.
To manage costs and deliver risks, Pierce stressed the importance of local procurement. “The only way to ensure price and on-time delivery is to find the relatively local source of your activity,” he said.
MCI USA also uses AI to monitor the impact of tariffs and supply chain disruptions on active components such as decorative materials, sponsored projects and promotional products.
Management Cost
At a recent ICHI virtual roundtable, planners shared strategies for managing in this new environment. One of the biggest changes? Structural pricing.
“Planners may have to start adding dedicated tariff order items to the cost-based multi-model models that are priced or transferred to materials,” said Liz Lathan, co-founder of club ICHI. “In this model, the agency fixer covers the service, but the cost of all physical commodities is at cost plus uncertain profit margins, as no advantage (tariff) can be controlled.”
What do you do when meeting professionals? “Build budget flexibility from the start, so if you spend a swing, you can adjust at any time without getting out of the entire experience,” Lathan said.
challenge
AV devices (many of which come from Asia) are affected. For some planners, this triggers a shift in format and creativity.
For example, some planners, instead of using high-tech AVs in group rooms, consider replacing it with low-tech, high-impact formats, such as a convenient round table, Lathan said.
“The only thing I can say at this point is that there is a lot of uncertainty. It is recognized that all of these things move so quickly that we don’t know what the ongoing impact will be. We know that as the economy is economically, globally, contracts, decisions delayed, the salary of trained employees will become more cautious and economically more cautious and 200 times, and economically more cautious on 200 times. Matthew Byrne, founder and president of Bourne Production Services, said.
The rise of hyperlocal
Local procurement has long been the best practice. It has now become necessary. But it is not without challenges.
“In theory, buying local helps reduce exposure to tariffs and international supply chain disruptions. But, in reality, this is not always feasible, especially on a large scale,” said Tracy Stuckrath, founder and CEO of Thrive! Meetings and events.
“The most important thing is to know your numbers,” she said. “If you know your room reception rate, you know how many people will actually be present for each feature and you can avoid over-ordering.”
Stuckrath offers an event for a tech company, initially expected to have 150 attendees, but the latest registration count is just 80.
“Keep in touch with your suppliers, watch your numbers, and plan in a flexible way,” Stuckrath said. “That’s how we’ll keep the activity going smoothly, no matter what the next step.”
She also recommends working with chefs and catering teams to design budget-conscious menus. Starkras said: “One of the chefs I work with can shave off my lunch time for $20.
She also noted that large-scale venue catering providers may at least absorb some ingredients through bulk purchases to increase prices.
However, she said some people may use tariffs as a reason to raise prices.
Budget Trap: Administrative Fees
Tariffs may be headlines, but conference planners say there is another cost that is quietly eroding their budget: administrative service fees. Unlike tariffs, these fees appear everywhere, from dining to meeting room rentals, with little transparency and frustration.
“Now, we see everything administrative service fees,” Mike Ferraria, founder and CEO of the conference, made it easy. “The minimum used to be paid for a 23% service fee. Now, it’s also in the conference room, and it’s never been a thing.”
He said the answer was vague at best when planners asked what exactly these costs were. “I personally think that this is just another way to make money.”
