Consider these expenses when deciding whether to cancel your event
Have you gotten “the question”? Sometimes it is a surprise that hits you out of nowhere and derails you for a moment. Usually, you can feel it coming and have braced yourself for the blow. You know the query we are talking about. After the latest news story about a spiking variant or travel restriction, you get a note from the CFO or even the CEO asking, faux-casually, “How much would it cost us if we canceled the meeting we have been planning for two years?”
I know, just reading those words can send shivers down your spine. Of course, the easy answer is to look up the cancellation clause in the contract, calculate the number of days out on the sliding scale to see how much you are liable for to the venue and type it in the return email. But that is just the tip of a very expensive iceberg.
Consider the following.
Sunk Costs
How much have you spent on marketing the event, planning the event and buying branded hoodies and eco-friendly thermoses that will sit in the warehouse? How much will you have to spend on therapy for team members who will see a year’s worth of work undone in a day? More seriously, what will this mean for the relationships you have built?
Switching Costs
How much will it cost to communicate the decision to cancel with registered and potential attendees?
Opportunity Costs
What will you do instead to keep the marketing funnel full, fulfill your duty as an association to come together for official business, stay relevant with your audience?
Community Costs
What will the decision to cancel mean for the community where you were planning to hold the event, the taxi drivers, servers and CSR charities who were expecting you? Destinations International offers an Event Impact Calculator (EIC) that your CVB can help you use to quantify that deficit.
Sometimes, canceling is the right decision, but you are going to want to consider all of the ripples from that go/no-go moment when you debate other possibilities, including negotiating room and F&B attrition to facilitate a smaller, possibly hybrid meeting; or rebooking for a later date if available and mutually agreed with the venue as a possibility.
See also: ‘Postpone, Don’t Cancel’ in Action—and Lessons Learned
