How do you handle banquet guarantees at your functions? Does the process cause you stress because you have a financial commitment to the facility and they have early deadlines? Also, do your attendees procrastinate until after your guarantee deadline, before deciding to register?
Guarantees are one of the trickiest event planning processes to learn when you become an event planner, so let us discuss the entire banquet guarantee versus registration deadline process and come up with a solution.
Reason for Guarantees - first, let's discuss why there must be a deadline to turn in guarantees. Hotels, convention centers and banquet halls have to get ready for your event. When you signed the contract for a number of guests to come, the facility probably had a clause in the contract that stated "minimum guarantee is xx% of the contracted number." That clause is there for a reason. Each facility has to book space wisely.
They want to maximize usage of their meeting and banquet space and bring in revenue to meet their budgeted projections. So, it is real important, if they commit a room for 1000 persons for lunch at an estimated $20 per head ($20,000) and budget for close to that amount, they can not afford to have only 300 show up. Three hundred would only give them $6,000 in revenue and leave them a $14,000 deficit in budgeted projections.
Hence, contracts specify minimum numbers. Also, based on preliminary numbers, they have to schedule staff including cooks, servers and set-up staff.
So, you now know why facilities require minimum guarantees, but that doesn't help you with your numbers. So, let's discuss a scenario that will help you.
Example - let's assume you commit to to rent space for 1000 for an all day event and have a planned luncheon as part of the contract.
Obviously, costs are banquet rental and an estimated 85% of the 1000 for lunch. Your registration fees are set at $22.00 per person to cover space rental and the luncheon.
Complications - difficulties to the planning process arise because guarantees are needed by the facility one week prior to the event (to order staff and food) plus the fact that your history says 70% of your registration occurs with-in that last week prior to your event. Also, you allow registration up until 48 hours prior to your event.
The Problem - you want increased attendance, so you really want to be flexible with your prospective members, but what you are trying to do does not match up with specifications by your venue. You hesitate to totally shut off numbers seven days prior to the event to meet guarantees by the hotel or convention hall. So, you have to guess at the numbers you turn in for guarantees.
Suggestion - force the issue without losing attendance. Your members have no reason to sign up early because you have allowed it. Why should they commit to you prior to a week out and then lose their money if something comes up a few days later. You have allowed them a grace period to wait until two days out even if it causes you problems.
So, force the issue, but do it in a way that they get to make the choice. If they have already decided to attend, but are waiting until late to sign up, most likely they will come anyway.
Set a Deadline - give your attendees a choice. Charge the original registration fee of $22 until one week out. Then charge a higher fee for late sign-ups. The amount you decide for late sign-ups could be $27 or $30 or even $35 per person.
You have to pick a number that will say to the attendees "I will save money if I commit early." However, the late registration fee should imply "I still want to sign up late even though it costs more."
What you want to avoid is pricing it at the point the attendee says "It is now too cost prohibitive to sign up versus the value of the program."
Your Options - increasing your fees to $27 or $30 for late registration may force your attendees to sign up early, yet still decide to come to your event, if they can register late. A late fee of $35 will definitely force the issue for pre-registration before the deadline, but might cause procrastinators to make the decision to not attend.
If this is a single function, you may not get your late registration fees and deadlines set the way you want. However, if you keep track of your numbers and develop a history, you will be able to find a price and pattern that will work for you.
If you are hesitant about charging late fees, start slowly at the $27 figure. See how many now sign up early. See if that 70% late sign-up now drops to 15% or 20% or lower. Also, keep track of your total numbers and see if there have been any changes.
Summary - so, how do you handle banquet guarantees at your functions? Try eliminating your own stress. You have the ability to charge what you want and allow your attendees to make a budget choice to save money by committing earlier. It helps them! It helps you turn in your guarantees and it helps the facility plan for your event. All you have to do is give them two positive choices. They can save money by registering early or pay slightly more and "get" the flexibility of signing up a few days late. Force the issue, it will work for you.
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