Banquet Facilities
Most facilities have in-house event-planning
professionals to assist clients in identifying the “look and
feel” of an event and to take care of many of the details
associated with hosting an event. Listed below are the
primary decisions that event planners help clients make:
Industry Overview
Banquet facilities -- also called “event sites” -- and
related services are found in several different types of
food service operations:
Event-Planning Activities
•
Concept or theme. What’s the message conveyed
by the event and does it relate to the company’s or
client’s vision or strategy?
•
Venue. Planners consider location, size, style,
ambience, parking, price and catering options in
choosing a site.
Restaurants that host special parties and other
events in their own catering and private dining areas.
•
Invitations. Well-designed, creative, memorable
invitations can set the tone for the event.
•
Historic homes, museums, concert halls, stadiums,
country clubs and other spaces that rent out their
banquet facilities and do catering for special events.
•
Food and beverage. Caterers and facility
operators should have experience with the style
and size of the event being planned.
•
Hospitals, universities and “contract employee
feeders” -- also known as non-commercial operators
-- that serve patients, students and employees and
also cater events.
•
Decor. Furniture, lighting, wall and table displays,
and accent props all combine to create a unique
environment in which the event theme stands out.
•
Entertainment. The right performers can energize,
inspire, or relax an event to reinforce the feeling the
event planner is trying to establish.
•
Budget. An initial event budget is key, to ensure
planned concepts fit into spending parameters.
•
Freestanding facilities that provide space and partyrelated service for weddings, receptions, parties,
luncheons, and religious-themed and work-related
events, among others.
•
Hotels with onsite catering and banquet sales staff
that can accommodate all types of groups.
•
Equipment rental revenue in the party and events
business in 2005 reached $1.85 billion (Event Solutions,
April 2006). Rental of party equipment and supplies is
just one of several ancillary products and services that
banquet facility operators offer in-house or through thirdparty specialists. Others are depicted below:
Ancillary Products and Services Offered by
Banquet Facilities and Event Sites
% of Facilities Offering
78.9%
Power*
Dance floor
Staging
73.6%
73.6%
73.6%
70.2%
64.9%
Audio visual
Table and chair rentals
Linen rentals
Lighting and sound
Additional decor
63.2%
52.6%
52.6%
Entertainment
Wedding accessories
Florals
36.8%
36.8%
0
10
20
30
40
50
60
70
80
Source: Event Solutions, “2006 Black Book.”
* Additional power is often needed to run sophisticated sound/light displays.
Source: The Portland Business Journal, April 3, 2006.
Issues and Trends
The health and vitality of the banquet facility business is
heavily dependent on the catering and event-planning
business. With the economy humming along, 2006 is
expected to end on a good note for most operators,
following a strong 2005, in which more than two-thirds
of all banquet facility and event-site operators saw gross
revenue gains. Average gross revenue increased by just
over 17% in 2005, and gross profits inched up to 18.2%,
from 13% gross profit margins the previous year (Event
Solutions, “Black Book 2006”).
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Freestanding banquet facilities number around 3,500,
and they generate average revenue of around $300,000
annually (according to D & B Marketing Solutions’
www.zapdata.com and 2006 Hugo Dunhill Mailing
List Company). Hotels and resorts involved in staging
events number in the thousands, and the revenue they
generate from events averages more than $1 million
(Special Events magazine, November 1, 2006).
Facilities categorized as banquet halls lost ground with
event planners, who gave more of their business to
hotels, resorts and convention centers. Banquet facilities
were used by 29% of all event planners in 2005, down
from 33.2% in 2004.
The chart that follows indicates the relative popularity of
sites used by event-planning professionals.
Most Popular Event Sites Used
(% of Event Planners Using Selected Venues)
Hotel/resort
Convention center
Tent/structure
Banquet hall
Outdoors
Corporate facility
Museum/zoo/gardens
Arena/stadium/theater
Restaurant
Private residence
Club
10
20
30
40
50
Yet there are ways to pare down banquet facility costs
for weddings, and facility operators who can advise
their clients on creative ways to trim the budget have a
competitive advantage over those who simply want to
rent space and leave all the planning to the client.
Weddings and Banquets on a Budget
• Late night weddings with receptions featuring
champagne, coffee, and desserts are elegant but
economical. A 8:30 post-dinnertime exchange of
vows shortens the reception time and labor costs,
while the food and beverages cost much less than
soup-to-nuts sit-down dinners or lavish buffets.
•
Holding a champagne-and-cake reception in the
same place as the wedding, and doing it in the
afternoon, can save the bridal couple, or their
parents, 40% to 50% on the final tab.
•
Serving lunch instead of dinner and utilizing
the banquet hall’s own centerpieces instead of
customized arrangements dramatically cuts cost.
Adding personal touches to the place settings and
centerpieces helps create a unique experience.
•
Morning weddings, with brunch receptions, allow
consumers to serve lighter and less expensive
food and avoid the full bar.
•
Mid-afternoon weddings generally are too late to
serve lunch and too early to serve dinner, so light
hors d’oeuvres or small plates would be sufficient,
and much less expensive than complete meals.
•
How the food is arranged on tables at a buffet
reception can be a money-saver. Put the most
expensive items at the end of the line and the
least expensive items at the beginning. The timetested idea is that guests will fill up their plates
before they get to the high-cost items and won’t
have anyplace to put the big-ticket foods.
66.4%
38.1%
30.1 %
29.0%
20.9 %
25.9%
11.7%
18.9%
13.5%
24.0%
15.7%
0
and a reception typically accounting for 50% of the
cost, it’s a major challenge for clients, banquet facility
operators, and event planners to hold receptions that
are memorable without breaking the bank.
60
70
80
Source: Event Solutions, “2006 Black Book.”
While the banquet facility and event-site industry overall
is heavily dependent on corporate events, the consumer
side of the business is vitally important to most smaller
banquet facility operators.
Free-standing banquet facilities provide party planners -be they corporate types or consumers who need to rent
space for a wedding or other celebration -- with certain
advantages when they book those venues, including the
following:
Advantages of Doing Business with
Freestanding Banquet Facilities
•
Dedicated staff fully accustomed to event
planning dynamics and pitfalls.
•
Full kitchens onsite.
•
Well-established relationships with party-item
vendors.
•
Multiple areas, each with its own style, where
different events can be held concurrently.
Consumers use banquet facilities primarily for wedding
receptions and other celebrations -- like golden
anniversary or Bar Mitzvah parties. With wedding
costs in the U.S. averaging in the $27,000 range,
Source: Association of Wedding Planners International (AFWPI)
“Tips for the Banquet & Reception,” 2006.
As in most industries, attracting clients is dependent on
generating positive word-of-mouth, highlighting what
differentiates one banquet facility from another, and
using a variety of advertising vehicles to communicate
meaningful messages to target markets.
Banquet facility operators spend an average of 5.4%
of gross revenue on advertising and marketing, using
traditional media as well as online marketing (which has
become standard practice in the industry). According
to Event Solutions “2006 Black Book,” 95% of banquet
facilities and event sites have websites, up from 80% in
2000. Among those that have websites, more than 80%
use Internet marketing to attract clients, up from 55% in
2000.
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The chart that follows provides details about the
marketing and advertising methods used by banquet
facility and event site operators.
Marketing Methods Used
(% of Operators Using Selected Media)
Internet
81.3%
Local print media
79.3%
Direct mail
62.1%
Yellow Pages
36.2%
National print media
28.0%
Local TV
19.0%
National radio/TV
3.4%
0
20
40
Banquet facilities typically have higher “average
invoice” amounts, because most clients use facilities
for more than simply renting space. Catering, party
equipment rental, valet parking, wedding planning,
floral arrangements and other decor is often included in
the final invoice that banquet facility operators send to
clients. Event Solutions “2006 Black Book” reported that
the average banquet and event site invoice is $25,560.
Critical Success Factors
31.0%
Local radio
several times that, and simple wedding receptions in
small banquet facilities can cost much less.
60
80
100
Source: Event Solutions, "2006 Black Book."
Selecting the right banquet venue and handling logistics
efficiently can make all the difference between a
successful occasion or a failed one. Listed below are
a few guidelines that facility operators should follow to
ensure that events happen as they are planned:
In advertising to attract new clients, the owners and
managers of banquet facilities mention characteristics of
their businesses which they believe will appeal to clients’
desire for reliable products and services. Some of the
characteristics they mention can be categorized as
“confidence factors” and some as “convenience factors.”
Examples follow:
CSFs for Banquet Facilities
•
Be cognizant of and ready to explain labor costs
and the logistics that will be required to transport
people to and from the site -- and be up-front about
any activity restrictions associated with the site.
•
Be flexible and accommodating when clients
make special requests. Events often require
that equipment is delivered in tight “windows of
opportunity,” so staff should always be on hand
to oversee delivery and ensure that equipment is
secure and installed without problems.
•
Make available technical, design and audio team
personnel before and during all phases of the
event, to help make planners comfortable that the
event will occur as they envision.
•
Be creative in adapting the facility to reflect the
theme that the planner or client has chosen.
•
Ensure that any technical aspects associated
with providing the entertainment can be hidden
from view when the space is in use, to maintain
ambience and a clutter-free environment.
•
For corporate events, thoroughly understand
the goals of the meeting or event: Will there be
intensive training sessions? Will attendees need to
use laptops or take notes? Is the meeting formal
or casual? How much free time will be built into the
schedule? Is there flexibility as to when lunch or
dinner can be served?
Confidence Factors Mentioned in Ads
Free and Ample Parking
Years in Business
Professional Party
Coordinator
Professional Menu
Planning / Event Planning
Hotel Affiliation
Non-Smoking Facility
References
Professional Staff
Specialty - Weddings, etc.
Renowned Food, Quality
Source: 2005 Comparative Ad Analysis Survey, Norbert J. Kuk & Associates
Convenience Factors Mentioned in Ads
Phone Estimates
Toll Free / Fax Number
Location Data / Maps
Days / Hours to Call
Square Footage Given
Valet / Validated Parking
Free Consultation
Website / E-Mail Address
Complete Convention
Facilities
Order Online / Virtual Tour
Menu Online
Source: 2005 Comparative Ad Analysis Survey, Norbert J. Kuk & Associates
Value of Products and
Services in the Industry
According to the Event Solutions “Black Book 2006,”
the average cost to rent a facility for an event in 2005
was nearly $6,000 ($5,927). Corporate events can cost
Source: Event Solutions, May and July 2006.
Industry Resources
Event Solutions, www.event-solutions.org
Special Events, www.specialevents.com
Catersource LLC, www.catersource.com
National Association of Catering Executives, www.nace.net
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