Log In
Attendance numbers are just one of the variables needed to understand your event’s gross profit recovery. (Whatever Media Group)
To arrive at your largest event’s gross profit, you need to connect the dots to apply attendance, revenue, and expense trends against your business model and industry.
Pre-pandemic, top-performing annual meetings and trade shows that we analyzed yielded a gross profit of 55–65 percent. In 2024, the gross profit for those same events was down by 20 points. For this purpose, gross profit is calculated by subtracting direct event expenses (not including salaries, overhead, or allocations) from gross event revenue and then dividing by gross event revenue.
While many major events have nearly recovered on the revenue side, the primary culprit for a lower gross profit is the significant increase — about 30 percent — in expenses. For some associations, this means that millions of dollars of funding for advocacy and member services will therefore need to be cut or reallocated. That results in increased oversight and pressure for event leaders like you.
We’re Not There Yet
Most reports claim that our industry has recovered to pre-pandemic levels. While that may be true for our hospitality partners, only 29 percent of the event planner respondents to PCMA’s Annual Meeting Market Survey said attendance at their largest in-person meeting was on par with pre-pandemic levels and one out of five planners said attendance was lower than 2019. On the flip side, nearly half (49 percent) said attendance was higher — a rosier picture than CEIR’s Q3 2024 Index Results, which found that only 34 percent of events surpassed their pre-pandemic performance levels. In Q2, attendance performed better — 44 percent surpassed their pre-pandemic attendance levels.
CEIR further reports that Q3 2024 total performance was 11 percent below that of Q3 2019. Net square feet and exhibitors fared much better than the attendee and real revenue categories — the two most important metrics. Expo performance will usually lag your attendance trend. If your metrics are similar to the ones below, you have a greater risk of declining participation for your expo without attendance recovery first.
When Will We Get There?
In 2023, CEIR forecasted “a full recovery” for the industry in 2024, which seemed like a reasonable prediction at the time. In April of 2024, CEIR updated that prediction to forecast a full recovery two years further out — in 2026. For most, this means modest incremental (1–5 percent) growth for the next two years. This aligns with what most of our clients are predicting. That being said, meetings rarely outperform the industries they serve.
External Threats
In a recent client roundtable, event professionals voiced concern over some potential external threats or disruptions that could impact their events, largely as the result of the new U.S. Trump administration. By definition, external threats are mostly out of your control, however, developing plans to mitigate the impact of these threats is a smart practice. Here are three threats your organization may want to consider:
- Decline in research/grant funding
- Impact of tariffs
- Workforce issues
Dave Lutz, CMP, is managing director of Velvet Chainsaw Consulting.
On the Web
Read the Event Industry Council’s latest Global Barometer for Q2 of 2024, which found the hotel group room nights index increased to 106 percent of 2019 levels, which can be attributed to an average 24-percent increase in group room rates, growth of leisure travel, and small meetings.