Every summer, finance directors have to approve an estimated budget for Christmas parties without the support of formal invoicing. Then, when the Christmas parties occur, the budget balloons at the start of fall. For example, what staff estimated as a budget of 3,000 pounds for 50 employees can easily surpass 4,000 pounds due to the VAT, the minimum venue hire, and other miscellaneous costs.
Sure, venues may not be forthright with what their events will cost, but the more significant issue is no one thinks about what parties will cost. There are many costs that venues assume people will cover, and there are many additional costs that are hidden in the fine print of the contract.
Here is how much it costs for 50 people at venues that charge between 60 and 80 pounds. This is how much cost will have to be covered at the end of the night.
Hotel function room
There is a Christmas package for 65 pounds per person, and that 65 pounds per person includes a meal with three courses and a half a bottle of wine, and also the cost of the room. Seems like it is all in there, but really it is not.
The venue has a minimum spend of £4,000, so you are paying for 52 people regardless if two drop out at the last minute. Wine runs out before dessert. The company then either has a cash bar, which ruins the mood, or an open bar for an extra hour at £15 per head. Reception drinks are not included in the package, so expect to pay £6.50 per glass of prosecco on arrival. The venue provides a mic and speakers, and if you want background music or a slideshow, you’ll pay an extra £300.
Now the hidden line items are added. Service charge is 12.5% on everything and is added after the per head calculation. Corkage is £15 to bring your own wine and it defeats the purpose of keeping costs down. The coat check attendant is expected to be tipped and it’s complimentary, so if no one organizes it, it becomes awkward. Extending the bar after 11 pm is £500, and transport is not included, so the company either organizes taxis or staff have to expense it.
When you itemize everything, the total comes to around £4,850 plus VAT for 50 people which brings it to £5,820. That’s £116 per head instead of £65.
Dry hire venues are enticing because of the base rate offered, which charges client just for the space. If a client books a warehouse/gallary for the evening, it could cost around \u00a31,200. However, the price is subject to change as more cost is added for each service needed.
The most significant cost is catering. Outside catering is an option, though it could be \u00a345-50 per head for a three course meal, potentially \u00a25,000 for 50 people staff included. Beyond catering, a bar is another cost. An event can have a cash bar or a paid stock option. Companies, most commonly, go for a hybrid which costs approx \u00a312-15 per head. However, this will also be for three hour bar service. Next, furniture is needed. For a guest count of 50, plan at least \u00a3600 for tables, chairs, linens, glassware, all of which needs to be hired.
There are also unforeseen costs. Seasonal temperature control can be an \u00a8150-200 extra cost. Furthermore, depending the size of the venue, portable toilets may be needed, costing \u00a3300. A venue without an alcohol licence will require a cost for a license and, if the guest count exceeds 40, a security detail will be needed, adding \u00a3250. Beyond all this, expect additional charges \u00a3150 for rubbish removal and for cleanup.
The advertised dry hire option that was about £1,200 ends up being £5,150 plus VAT, which brings it to £6,180. That translates to £123 each. This amount still does not cover transportation and there are no activities included.
Buyout option for restaurants
Companies who wish for something less formal than a hotel are likely to gravitate towards a full restaurant buyout. A centrally located, mid-range restaurant offering exclusive use for £70 per head, three courses, and a drinks package sounds okay. That is, until you consider and account for the extra charges.
The drinks package is not generous, with only two glasses of prosecco, two glasses of wine, and no spirits. Upgrading to a full three hour open bar costs an additional £18 to £20 per head. Minimum spend requirements apply, typically set at 60 to 70 covers, so you either pay for an extra 10 to 20 ghost covers, or convince real people to buy extra bottles to surpass the limit. Sometimes the cost of the room hire is included in the per head cost, but this is not the case most of the time, especially for December bookings when restaurants know that people will pay extra for it. That’s another £800.
gratuity charge is applied to the total of billable services which includes beverages, and is floating around the standard of 12.5%. It is your resposibility to supply and arrange anything company desired decorative changes to the venue, anything additional to what the venue already has. Most restaurants will not allow supply drop offs until after 5pm on the event day, which creates additional time constraints. A/V is also limited, which means if you have audio-visual needs for presentations, videos, etc. you are limited to the venue’s TV screens, potentially lost A/V cable, and the time and cost of bringing your own equipment. If the venue is rented and you need to use their space before the time scheduled, that incurs an additional charge of £150. Also this space is setup at an additional charge, again more than one booking at the venue.
Setting priorities when working with a limited budget
A majority of the time when working with various companies, once the budget is established, the first thing that gets scaled is the open bars. Whether it is reduced to 2 instead of 3, or one where drink purchases are limited to a token (3 drinks and pay for the rest). Reception drinks get completely eliminated and people simply go to the table. The presentation is shortened considerably or a completely moved out to the next weeks email. The transportation is left for the staff to organized.
When it comes down to the cuts, the ones that tend to stick around are the food, the venue, and bar package because contractual obligations are governing those. Essentially everything cuts down to these three, everything else is purely optional if the budget is over-allocating, which it will guaranteed.