From the industry shutdown to the virtual surge to the slow return of IRL events, the COVID-19 pandemic has impacted event budgets in some clear and hidden ways. And as in-person events come back online, calculating costs will become even more complex, with many new line items to add to the equation.
But whether you’re planning a hybrid, virtual and in-person event, one thing still remains: A budget breakdown is ultimately based on the event goals and objectives, which determine where you allocate the funds.
“We always start with the why. Why are you doing this event? Then we consider the UX. What does each of these audiences want out of the experience? Then we build out the elements from there, allowing for connectivity between the two narratives,” explains Mary Vertin, an event consultant for Liberty & Co., a New York-based editorial-first experiential strategy and creative agency.
While many event pros stress the importance of designing a separate yet connected virtual experience as part of a hybrid event (a simple livestream doesn’t cut it anymore) that doesn’t mean the budget will need to be doubled. “We think of it as a Venn diagram,” Vertin says. “Some elements will be distinct and specific to the IRL element, others will be distinct to the virtual audience—but some of the content overlaps and is in the middle of the Venn diagram. And remember, the two experiences are apples and oranges, so simply taking either budget and doubling it is not the way to start your process.”
To meet the growing demands for hybrid events, more and more convention centers, hotels and other event venues are implementing tech-forward solutions to accommodate both a virtual and in-person audience. And some agencies like Liberty & Co. are teaming up with production companies to make the planning process more streamlined. Liberty & Co.’s partnership with global video and technical producer Dreamtek allows the agency to offer a range of services including event branding and strategy, programming curation and full-service production for IRL, virtual and hybrid events.
“Working with vendors that can offer hybrid capabilities is beneficial. Not only will they help streamline the communication process, which saves additional time, money and resources, but they allow for a more straightforward transition process when needing to pivot or dial back (or dial-up) hybrid elements throughout the planning process,” explains Jamie D'Attoma, senior vice president at Shadow Experiential.
For example, hospitality service provider Convene offers virtual event packages that include features like a dedicated producer, customization such as branded graphics and interactive breakout room setups, starting at $5,000 per event, with the option to add on one of its actual physical venues in locations such as London, New York and Chicago for an additional cost.
As COVID-19 gathering restrictions ease up, in-person event planning is on the rise. But despite decreasing case numbers, we are still in the midst of a global pandemic—and planners will need to continue to allocate funds for health and safety measures.
“A good rule of thumb to consider—similar to benchmarking a contingency line item—is allocating 10 to 15% of your total production budget to account for contingency including COVID safety measures,” D'Attoma says, noting that COVID-19 compliance depends on the size and scale of the event and current CDC guidelines for each state. “Producers should use this percentage as a base minimum when putting together any event budget, now throughout the end of the year and into 2022.”
Since July 2020, Kate Levenstien, CEO of Cannonball Productions, has hosted IRL events in 12-plus cities. “As producers of food and beverage festivals, there has always been an emphasis on health and safety within planning and budgeting. The allotment needed really depends on the setting and scale of the event,” she notes. “Our events are exclusively outdoors, which mitigates a lot of hurdles and costs. We've moved everything possible to contactless from our waiver and check-in to all of our concessions and photo opportunities. In some cases, this has actually saved money and cut down our waste.”
Because outdoor spaces have become the safer option, Levenstien says that “rentals are in great demand. Tents, porta-potties, generators, heat lamps, et cetera can be hard to come by and rental companies are able to charge a premium. These aspects may seem minor but result in thousands—and even tens of thousands—of dollars in additional cost.”
Besides the added expense of equipment and supplies such as PPE and temperature check devices, D'Attoma says that “front-of-house on-site staffing needs have increased due to ensuring people feel safe with the return to IRL. It’s no longer about checking someone’s name off the list for entry. As event producers, we need to verify each attendee can safely enter and communicate and convey the safety measures taken into consideration leading up to, on-site, and post-event.”
The pandemic has not only affected event budgets in terms of actual line items but also in unforeseen, trickle-down ways, meaning planners should expect overall higher prices due to the larger economic impact. “Get ready for inflation to really hit our budgets,” Vertin says. “Everythingis getting more expensive right now—from lumber for our builds to food and catering costs—as these hard-hit businesses rebuild from losing a year of revenue.”
Even ice is pricier. “We order ice for our events and we used to be able to return the unused bags for a refund. Now, due to COVID, they're not accepting any unused bags,” Levenstien says.
Another, perhaps overlooked expense to consider: lawyer fees. “We have to really involve the lawyers and insurance brokers to make sure we're covered; there should be an increase in those admin fees this year as many of the rules have changed,” Vertin explains.
To help counter the increased costs, planners will need to get even more creative. “As with anything in our business, it's about giving your clients a variety of choices,” Vertin says. “Try a heavy-app cocktail party versus a sit-down dinner, which might not only help keep costs down but keep attendees circulating around the room and more comfortable than sitting at a table and ‘sharing air’ for a couple of hours.”
As in-person events start up again, event pros are now trying to figure out how the numbers will shake out. Will event budgets go up, down or stay the same?
“Depending on the type of event, budgets may need to be adjusted to account for larger spaces to allow people more space from other attendees,” Levenstien explains, citing attendees’ comfort levels. “For example, Cannonball Productions went from hosting 10,000-plus people in major league stadiums to 2,000 people spaced out across golf courses. Our budgets have dramatically changed as the venue and structure of our event shifted.”
The industry-wide shift from IRL to virtual to some combination of the two can equal greater gains for everyone in the long term. “I think there's going to be some education to do with our clients. But we have gone through this collective moment of rapid change and adaptability, and every single one of our clients has been forced to look at things very differently,” Vertin says.
“For instance, we have a nonprofit client who went from one fundraising moment a year at their annual gala to multiple fundraising moments throughout the year through a combination of virtual and small, intimate IRL events when restrictions allowed. They actually ended up exceeding their fundraising goals in 2020 by completely reinventing their entire strategy.”
She continues, saying “looking to next year, they are moving forward with their in-person event, but are completely refreshing the format and adding a more accessible, but highly produced virtual element in hopes of generating smaller incremental donations from more virtual attendees than could ever make it to their live event. This hybrid approach represents the best of both worlds, plus potentially a new revenue model. It's the way all brands should be thinking about their experiential strategy.”