The Cost of Doing Business

A friend of mine hosts a community conversation for Certified Meeting Professionals (thank you Joanne Dennison, CMP¹). Recently a question came up related to how much hotel, air, and meeting costs have increased over the past five years. Someone was asking what is contributing to these increases and how do planners explain the rise in costs to their attendees. I can speak from experience for at least a span of seven years booking a large conference in Orlando with a resort, convention center, air travel, hotel rooms, and food and beverage (F&B), that all of these costs have gone up.

A conference I helped organize had a $199 room rate in 2020. The same hotel room rate in 2024 was $249. Not so bad, right? Can I just tell you how grateful I am that we chose to sign a multi-year contract in 2018 for 2020-2025? I can only imagine what others paid for that same night. The price of coffee is also ridiculous. Check out my blog The New Liquid Gold for full details, but I paid $75/gallon in 2019 (which in it’s own right is stupid) and the price of coffee in 2024 now ranges from $165-$185/gallon.

I went to a leader in the industry, Amex GBT², to get their take on hotel costs in the past few years. In 2018 they predicted that in 2019 hotel rates in Atlanta, Boston, and Chicago would increase by 4%, 5%, and 6% respectively due to hotels reporting strong business travel and group growth. In Amex GBT’s same report for 2020, they cited flat occupancy and a full pipeline of rooms in construction limiting the ability of hotels to increase prices, however, for 2020, they still predicted costs in Atlanta and Chicago to increase by 1% and 5%, but New York to decrease by 3% (Boston’s statistic was not reported). In 2023, they continued to predict increases for Atlanta, Boston, and Chicago at 5%, 5%, and 4.5% respectively due to strong recovery by hotels in 2022 and increased corporate demand.

For 2024, Amex GBT predicts the largest increases I’ve seen, citing a return of major trade shows and impending legislature of short-term rentals driving up hotel prices in major cities with convention centers. They predict in 2024 an increase for Atlanta, Boston, and Chicago of 7.5%, 11.3%, and 12.6% respectively.

The news is not only grim from Amex GBT. I am a member of industry associations and to stay current, subscribe to several publications. It seems this is the hot topic everywhere. Michael Dominguez, who is one of the most respected leaders in the hotel industry and one of my personal superheroes, says midweek occupancy is on the rise which means hotel rates are going up as well.³ And, in a recent article from Meeting Mentor Magazine by Conference Direct, it stated that bookings are forecasted to increase in 2024, and F&B and AV are anticipated to increase by 50%.⁴

So what’s a girl to do?

Sadly, there’s no one-size-fits-all answer, however, all is not lost. To answer the question of how to explain the rising costs to attendees, I have found that educating them helps. This is not their world, it’s ours; they don’t understand F&B+++, rigging costs, and some of the crazy taxes and fees we’ve seen lately. People can be very understanding once they know what is behind some of the decisions we make. Explain how you are working to save the attendees money. For example: once we explained how a full room block helps the organization negotiate better contract rates for future events and ultimately saves the attendees money by not having to increase their conference fees, the room block started to sell out, and early! The room block continues to sell out years later.

In my experience, multi-year contracts are beneficial for both the venue and the organization as evidenced by the hotel room rate example earlier. Since hard costs are what they are, negotiating concessions with venues where you can such as complimentary internet, parking, and resort fees can save an attendee money and be an expression of good faith when other costs are going up. And, finding ways to add value to the conference experience that don’t cost the organization much such as digital download packages of the most attended sessions helps cushion the financial blow for the attendees. These bonuses make for great marketing tools as well.

I don’t claim to be an expert, but I have several years of experience in nonprofit event planning. When working with nonprofits and associations, many decisions are made based on budget. It takes creativity and ingenuity to continue to organize meetings and events with quality and excellence amid rising costs without pricing it out of an attendee’s budget.

Sharing ideas and information with other planners is incredibly important. If you would like to chat about ways to trim costs or how to talk to your stakeholders about handling rising costs of events, email me and let’s set up time to talk.

Please share this blog with planners you know are struggling with the rising cost of events or how to communicate it to their stakeholders! Like it and share it on your social media!

1.Joanne Dennison, CMP. The Meet Guide.

2.Amex GBT Hotel Monitor 2019, 2020, 2023, and 2024 https://experience.amexglobalbusinesstravel.com/hotel-monitor/2024/north-america

3.Michael Dominguez, CEO and President of Associated Luxury Hotels International (ALHI) from an article in prevue meetings + incentives, February 21, 2024.

4. Meeting Mentor Magazine by Conference Direct, February 2024 issue. Article “2024’s Biggest Challenge: Soaring Costs.”