After a nearly two-year hiatus due to COVID-19, the events industry returned in all its glory this year. But just when we thought we had overcome the most difficult hurdles both as humans and as an industry, new external pressures waited around the corner. A war in Ukraine, an inflation surge, and supply chain issues will impact event budgets in 2023.
More than simply stretching our pre-existing 2022 budgets thin might be required in this climate. The Annual ICE Report estimates that event-related costs will increase by 83%.
On the bright side, higher costs aren’t just a consequence of inflation and other economic challenges. It’s also a sign of a returned confidence in event planning. Of course, our event marketing budgets will need to be higher in 2023 than in 2021 or 2020. After all, most events were virtual and demanded lower budgets.
This blog post explores why your event budgets will need to increase in 2023 and where to allocate that extra money.
The Return of Large-Scale In-Person Events
Let’s start with the more uplifting reason why you should increase your event budget in 2023. We’re predicting that in 2023, we’ll see more corporate events, conferences, and exhibitions than in the last three years.
More events with more events mean more food, room blocks, entertainment, production equipment, and travel – and those all cost extra money.
The Rise of Energy Costs
The global recession is causing energy prices to rise. And unfortunately, events are energy-hungry creatures. Increased energy cost makes it difficult for events to maintain their budgets, but some solutions can help you mitigate the costs:
- Reduce the use of energy at your event by using more efficient AV equipment, such as LED lights instead of fluorescent bulbs
- Hold your event in the daylight hours or outside venues (and get an extra point for COVID compliance)
- Book venues with renewable energy sources like solar panels
The silver lining is that the energy crisis can motivate our industry to start implementing sustainability in more significant, meaningful ways.
Higher Food and Beverage Costs
Global crises, such as the pandemic and the war in Ukraine, have dramatically affected the costs of food and beverages. The US Department of Agriculture reports that the food index increased 11.2 % in the last 12 months, with the expectation of climbing another 3-4% in 2023.
Consequently, catering prices have increased in 2022 too, and you should budget for those price hikes.
Alternatively, you can switch hotel catering for local restaurants, as suggested in our Event Trends Guide 2022. But keep in mind that the prices of restaurant menus also rose 8.8% in the last year.
Labor Shortages and the Great Resignation
Hospitality and event industry workers were among the most affected by the pandemic. Many people began looking for jobs in other industries that were more resistant to the epidemic due to the unstable environment. Consequently, event planning and operations staffing levels have dropped to record lows.
Labor shortages have left many venues and service providers without sufficient staff. Due to limited options and staffing challenges, event labor costs have also increased.
The Event Brew podcast discussed labor shortages and the great resignation in events in greater detail. Make sure to listen to their episodes if you’d like to get into the nitty-gritty of this topic.
Higher Event Production Costs & Standards
Event production costs, too, have increased since the pandemic. In an era of virtual and hybrid events, outstanding production has often been the event’s saving grace. Audiences have grown accustomed to a better standard in live streaming and consuming event content online.
Wouldn’t you agree that you need high-quality footage that will attract your audience? You also need effective tools to edit your footage into a cohesive story showing what makes your brand special.
Every event you produce is a brand-building opportunity. So, you can either wring your hands at the new costs of producing events or reframe this as an opportunity for a better ROI over the long term. For example, you can repurpose your event content for future marketing efforts or monetize your live stream.
The Prices of Raw Materials
Prices of raw materials have skyrocketed. The ripple effect of this fact affected the entire global economy. For example, products like furniture and AV equipment now cost more to make.
If your supplier finds it challenging to source raw materials for your event, this could affect both your costs and delivery timelines – which could compromise the success of your event if not handled well.
So, to make the most of your event budget in 2023, make sure you choose your vendors far in advance. This will ensure you have enough time for price negotiations.
Event Technology: A Worthy Investment
Since event marketing will cost more in 2023, event marketers must develop comprehensive event marketing strategies and prove the ROI of their events. Measuring event success is one of the biggest challenges event professionals face. How can they do that?
At Endless, we believe that event technology should be the building block of every event strategy. By investing in event technology, event planners get invaluable data insights into attendees and the marketing success of their events.
However, event technology can be quite an investment, which brings us back a full circle. Event budgets in 2023 need to consider this added expense, or shall we say, investment with huge returns.
Make Your 2023 Event Budget Go Further with Endless Events
Events are an essential part of marketing budgets, and their influence will continue to outshine other marketing tactics. To make the most of them in 2023, event planners should develop a new approach that reflects the outlined price changes.
We’ve always recommended planning events far in advance. That piece of advice alone can save event planners significant amounts of money. So, start planning now and get creative with your event budget in 2023 — and don’t forget about sustainability!
And finally, lean on your trusted event management partners to make the most of your event budget in 2023. Endless Events has an impressive track record of hosting profitable events. If you’re interested in our services, reach out to us. We’re here to help you through every step.