I recently read an article published by MeetingsNet entitled “Why Choose an All-Inclusive for Your Meeting?” Jean LaCorte, the author, raised some interesting points in favor of purchasing events this way.
For clarity, an all-inclusive plan is one employed by a venue (usually a hotel), in which customers pay room, tax, gratuities, and food and beverage included in one package price, on a per person basis. There are variations to this methodology, at some facilities, and other services and products, such as audio visual, in-room amenities or recreation, may be bundled into the package. Most commonly Conference Centers utilize this business model.
The premise of the aforementioned article is “Variety and cost-effectiveness are the two main reasons” for opting to use this type of plan. While I agree that an all-inclusive package typically offers budgeting convenience, and variety with food and beverage selections, I don’t necessarily agree that it is cost-effective. Here’s why…
In the realm of hotel food and beverage, the profit margin is usually very narrow, usually somewhere in the neighborhood of 20-25%. Hotelier friends, am I on track with that statistic?
To offer food variety, means the facility has to purchase, hold in inventory, and potentially prepare a broader selection of items, resulting in higher food and beverage costs. Secondly, with buffets, there is less portion control, so more food must be prepared and put out to maintain the integrity of the customer experience. So, as with any good business, the pricing for delivering these goods and services must be developed in consideration of these factors, in order to meet profitability goals.
The Upside and the Downside
From my perspective here’s a quick look at the basic upside and downside of “all-inclusive” style packaging:
|Greater Food Variety||
In my experience, as an event professional, all-inclusive pricing is only an economical option if all attendees use all or a majority of the services bundled into the package. With many events, it does not play out that way, particularly with food and beverage.
My comments in this article are absolutely not intended to alienate, or diminish the value of “all-inclusive” packaged facilities. In fact some of the finest meeting and conference venues operate successfully, using this business model. I believe what is most important is to match up an event to a facility that meets its historical needs and personality.
If quality is your event’s primary objective, and you have limited event management staff, and ample financial resources, then all-inclusive priced facilities may be the best solution for your situation. If your meeting has a history of low attendance at meals, and your organization is operating on a tight budget, then it may be wise to consider alternatives. Make sense?
Question: How do you perceive your event fits into this scenario? What factors do you consider? Have I missed something in this article? Please add your thoughts!