Business Talk: Corporate Events And The Cost-Of-Living Crisis

After the disruptions brought about by the pandemic, businesses have invested heavily over the last year in reconnecting with clients and consumers. In the first three quarters of 2022, Hire Space saw average budgets for business events rise to over 25% more than pre-pandemic averages, as businesses seek to harness the renewed appetite for in-person events.

However, while the restrictions of the pandemic may have diminished, another wide-reaching upheaval has taken its place: the cost-of-living crisis. With inflation impacting consumer spending, and fuel and energy costs driving up overheads, the increasing pinch on company budgets will inevitably have an effect on businesses’ ability to put on events.

Hire Space spoke to Anita Howard, CEO and Founder of In-House Corporate Events (ICE), Kerrin MacPhie, Chief Executive of the Meetings Industry Association, Michael Hirst OBE, Advocacy and Government Relations at UK Events (previously the Business Visits and Events Partnership), Richard Waddington, Chair of the Events Marketing Association (EMA), Sophie Beasor, General Manager of EMA, and Sasha Frieze, Founder of The Business Narrative about the outlook of business events against a backdrop of budget squeezes.

Event focus - what do experts predict in the coming months?

For corporate event planners, the gravity of the unfolding situation is not entirely new territory: having navigated the Covid pandemic, and the constantly-evolving revival of in-person events, event planners are undeniably more equipped to adapt to changes in the sector than before 2020.

But a huge amount of uncertainty remains, and there’s little advice available on adapting event strategies to work in this new environment. From whittling calendars to changing the format of events, below our contributors share their insights on the changes they expect to see in the world of business events, and how these will impact event calendars.

Increased operating costs will trickle down to organisers

As the price of energy and essentials rises, venues and event operators are finding that the cost of operating as normal is skyrocketing. As Kerrin MacPhie, Chief Executive of the Meetings Industry Association, told Hire Space: “The findings from our most recent industry survey revealed that… on average, operating costs have increased by almost a third.”

Many venues and operators aren’t able to sustain these cost increases, and may have to look to offset the increased cost of their operations through charging more for their services. “To try and combat this, over three quarters have had to increase prices in the form of DDR or room rates, catering or AV provisions,” says Kerrin.

This evidently has significant implications for business budgets. “It’s a layer cake,” Richard Waddington, chair of the Events Marketing Association (EMA) told Hire Space: “Ultimately, the rise in costs will be passed on to the buyer, and margins will be squeezed.”

Sophie Beasor, General Manager at the EMA, warned that this could lead to revisions of planned events and event calendars as companies look to protect their margins: “Budgets approved months ago simply do not allow for the exponential rate at which the costs of suppliers and venues are rising.”

Initiatives like the Business Events Growth Fund may go some way towards helping offset this, but as Michael Hirst at UK Events says, a lot hinges on government support and investment in events as part of a growth agenda.

Revised budgets may lead to a more streamlined events calendar

While event spends for 2023 were predicted to rise up to 83%, according to a study by ICE, this is not necessarily a reflection of more events being delivered. In fact, the study credits much of this spend to “spiralling” costs of running events - figures suggest that the average cost-per-attendee of conferences and meetings was forecast to be 32% higher in 2022 than in 2019.

So how will this affect event strategies? Enquiry figures for the first quarter of 2023 suggested that companies were focusing their budgets on fewer, larger events, rather than multiple smaller events. According to Hire Space enquiry data, the number of attendees quoted for prospective events rose by 14.86% between Q2 and Q3, while budgets have decreased marginally.

The events that companies do put on are likely to be more strategic. As Sasha Frieze, founder of The Business Narrative, notes, “Where in the past [businesses] might have run an event because they always have, now they’re looking for clarity and focus around what part the event plays in the bigger picture and what the measurable returns are on it.”

Fewer events, of course, mean a knock-on effect will be felt by the suppliers and venues who rely on events, which is a worrying situation for the industry, and may lead to a perpetuating cycle of cost recovery. As Anita says, communication is key between corporate planners and venues, to keep costs transparent and see where different areas of the industry can support each other.

Delegate incentives will be an ever-more-essential consideration

On top of the rising cost of event operations themselves, businesses may also have delegate hesitancy to contend with, according to the EMA. As Sophie Beasor told Hire Space, delegates will be feeling the squeeze in their own pockets, which could contribute to lower attendance at events.

This translates to an added requirement for event planners to consider the delegate experience, and to invest in pull factors for events. As Sophie says, “More than ever, planners must consider the macro environment of their event. How will their delegates get to the event? Do they need to stay overnight? What will they eat or drink during the event?”

These areas are evidently among the central tenets of events, but as Sophie acknowledges, the question that these considerations hinge around is: “Who will foot the cost of these additions outside of the event itself?”.

With tighter budgets, event planners have to be conscious of where the money will make the most difference: situating events in central, high-appeal locations may cost slightly more, for example, but it’s likely to reduce push factors, and encourage delegates to make the journey.

Additionally, investing in creating experiences will likely become increasingly essential for businesses looking to attract delegates. Hire Space have delved into this trend in our guide to fully exploiting the experiential element of events.

Non-traditional event models may become the norm

Many of the organisations consulted for this article expected to see more hybrid events in the coming months, as companies cut budgets for events. As Michael states, "many companies that will be rationalising their cost structures and the first thing that goes is usually travel." This is not necessarily new: especially since Covid, people have been using hybrid models of working and networking far more frequently.

Hub-and-spoke models, where two venues are connected and speakers in each are able to interact with each other are lauded as a potential solution to bridge the distance between audiences in different geographical locations. Aside from budget concerns, sustainability is increasingly on the agenda, and as international business travel is reevaluated, trends suggest that these formats will take on a more central role.

However, hybrid is not the budget option if you want to do it right, warns Sasha Frieze at The Business Narrative. For a meaningful, impactful, and purpose-driven hybrid event, where online and offline audiences can engage and connect with each other, costs can be the same or often higher than a large in-person event.

Even so, taking into account international travel and accommodation (for which costs are set to rise in the next year), it’s likely that hybrid events will make up a larger proportion of event calendars in coming months. Done right, they can provide significant returns, and increase the reach of brands.

Events are more relevant than ever...

While the events sector has been buffeted by two major disruptive scenarios in the past 3 years - first a pandemic and now a nationwide downturn - events aren’t going anywhere. The recent AMEX Global Event Trends Forecast reported "booming optimism and focus on in-person meetings and events", which, as Michael explains, is down to their reliability to facilitate business activations and foster connections.

For businesses, events may even be more relevant than ever before. As Anita points out, in recent years, many businesses have seen their revenue go down without events, and many have seen the growth that has come along with audiences’ renewed appetites for in-person connections. As Michael notes, events drive people from their homes and offices to take part in something that enhances their knowledge, connections, and ways of doing business.

And will have a renewed purpose

With tighter budgets comes more strategic decision-making, which is generally a good thing for business (though perhaps not so much for innovation). Sasha from The Business Narrative told Hire Space: “Inevitably, businesses are more aware of budgets and spending their budget well, and what that means is making sure events have a real purpose and absolute clarity on what the next steps are.”

This means that companies are likely to be more thoughtful about which events they stage, when they put them on, and what the format might be. As Sasha acknowledges, in being more intentional about purpose, some events may drop away. “That’s ok,” she says: “We should only be putting on events that take campaign programmes to the next level. There may be slightly fewer events but they may be significantly more impactful.”

The organisations we spoke to generally agreed that businesses will still invest in events, and have a renewed focus on producing streamlined, strategic, and measurable events as a channel to build brand awareness and contribute to wider conversations.

Event planners will have to lead with content that really draws audiences in, which makes events stronger overall. And marketing teams are becoming much more entwined with events, working to develop their value as an essential marketing channel, and to clearly calculate the ROI of each event. According to ICE, in 2020, 49% of in-house event organisers reported to a marketing department; in 2022, this number is 55%.

The impact of budget squeezes is yet to be fully realised, but as Anita Howard told Hire Space, event professionals will still be in high demand, and will be able to adapt to the changes ahead: “Events will be very different - the rush to get back to events may not be as colossal [as it has been since Covid], but we’ll run better events.”

"I believe that our robustness, innovativeness, resilience, and creativity will allow us to overcome the significant hurdles that are in front of us." Michael Hirst

How to make events do more for your business

Revise previous year’s calendars

First and foremost, for the modern corporate event planner, leaning on strategies from previous years will likely not work as effectively in a dramatically different climate. Instead, it’s essential to reevaluate which events contribute most to your company’s goals, and be strategic and creative to make each selected event do more for the money.

Foster creativity and connections

In times of tightened purse strings, one of the first things to take a hit is innovation. Often in times of cautious spending, businesses play it safe and fall back on what’s worked in previous years. However, in times of upheaval, doing something novel can be the difference between your event inspiring your attendees, and slipping under the radar.

It’s about looking at what opportunities there are for new formats, innovative content, and creating experiences that drive attendance, interaction, and ultimately, business. As Sasha says, “Every event specialist has to respond to the world as it changes. [Now] we need to flex that muscle again - it’s about finding creative solutions to briefs.”

Often the most creative, successful solutions are developed through community collaboration. EMA’s Sophie reminds audiences of the value of associations in crunch times: “Over the last few years these networks have become an invaluable resource to the event professional as a safe space to share ideas, seek guidance in these ever changing times and follow industry news and trends.”

Double down on purpose and measurable returns

Every event should be a means to further your brand, from ensuring that your event nails the experiential imperative and gives your delegates a memorable experience, to making sure you leverage your event content to maximise its reach.

As is always the case, each event planned should be considered carefully against the objectives of the business, but in the current climate, it’s more important than ever that an event has measurable KPIs. Whether this return is financial, or reflects the number of leads generated, or the size of the audience reached, evaluating the return on investment is critical.

Work smarter

With stretched budgets and teams, it can be difficult to confidently put forward the case for events as an opportunity for growth rather than a drain on resources. If you’re looking for a solution that provides support across your event delivery, without the cost of a new hire, Hire Space 360 can help.

As well as providing event experts to advise on events strategies, Hire Space 360 offers a full-scope event planning and procurement service, which cuts down the time and cost of organising events. Get in touch to find out more and see how we can help navigate your event calendar going forward.

The events industry has been hard hit over the past few years, and many will be concrened at the impending effects of the current crisis. But the prognosis isn’t entirely devoid of hope: as the industry adapts to these new challenges, there are likely to be significant learnings that will help to push our sector forward, and create stronger, more considered events.

For more advice and support on planning streamlined events calendars, get in touch with Hire Space's event experts. We can help to source and deliver strategic, streamlined events to drive forward your business objectives, in any climate.

Author

Jessamy Cowie

Jessamy channels her passion for sustainability and cultural events into shining a spotlight on innovation and inspiration in the events world, and heading up Hire Space's sustainability committee.

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