Sunday, April 21, 2013

Meal Guarantees Make or Break Association Meeting Budgets

As a prelude to starting my own association management company, I served as a contractor to help a major corporation hold educational conferences for customers. We held these throughout the country.

My experience with association and nonprofits had ingrained me on the importance of meal guarantees. And, I really disliked it when we had to pay for meals that were guaranteed but not eaten.

Here’s what my experience showed:

  • most exhibitors don’t eat convention meals
  • many attendees (depends on group’s history) don’t eat convention meals
  • most hotels set 10% more than you guarantee
As a result, we had success in guaranteeing meals at about 80% of attendance. 

I used that formula for this corporate client.

It worked pretty well until a meeting in Memphis. 

My guarantee was a bit too tight for the lunch. We didn’t have enough seats or meals for everyone.

After the meal, my corporate manager came to me and said, “Steve, we need to guarantee more meals tonight.” I responded, “That would be a mistake. A lot of people – including your sales reps – will be skipping the dinner and going down to the casinos.” He said, “I don’t care. Set extra tables.”

So, I upped the guarantee with the hotel.

And, sure enough, we had about 100 too many places (at about $45 per plate). 

At the end of the banquet, my corporate contact came up and said, “Ok, you were right. I’ll never question your meal counts again.”

While this may be obvious to professional meeting managers, many clients and association executives really haven’t paid attention to the strategies behind meal guarantees nor how it helps your bottom line.

As a meeting planner, it is in your best interest to be sure your key leaders understand.

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