Venues that host private events like weddings and parties tend to encounter the same problem: They don’t know how to price an event space. If you have a hotel or restaurant, you likely understand how hard it is to maximize your revenue without scaring away potential clients.
So, how do you decide how to price your venue? With over two decades in the event space, TCFLinen knows there isn’t just one factor to consider. You need to think about everything from your value proposition to your competitors (not to mention pricing strategies).
To help you set the right price for you and your clients, our industry experts are sharing our tips for pricing an event space.
Event Pricing Factors to Consider
Before you can determine how to price your event venue, you need to think carefully about your venue and market. This information can help you select pricing that will be profitable for you and appealing to your clients.
Venue Type
Take a moment to think about what type of event space you have. This information plays an important role in helping you select the price for your venue.
- Venues like restaurants that offer food and beverages should consider implementing minimums. This ensures you always bring in a certain amount of money and doesn’t cap the amount of money you can earn.
- Other types of event spaces might want to charge room fees by the hour or the day. Doing so gives your venue the option to host more events.
Venue Occupancy
Thinking about the occupancy trends at your venue can also help you set the right minimums to rent your space.
- Venues that aren’t usually fully booked should base their minimums on how much it costs to operate the space. This strategy keeps your doors open and ensures you don’t operate at a loss.
- Venues that are often full should set their minimums based on their projected revenue. With this approach, you can capitalize on high-demand times and enjoy more profit.
Venue Room Sizes
Venues that have multiple rooms should set room minimums that help keep the entire space profitable. Deciding on this number involves math, not magic.
You just need to rely on the following formula:
Room Occupancy x Average Revenue (Per Guest) = Your Estimated Room Minimum
Venue Competitors
Every event space has competitors. Rather than viewing them as a threat, you can look at them as a source of information.
While you might not be able to learn the nitty-gritty of their finances, you can often find out how they charge for rooms and spaces similar to your own.
With that insight, you can work to determine whether your proposed pricing is in line with what clients expect to pay in your market.
How to Analyze the Competition
The thought of analyzing your competition can sound intimidating. However, it’s a vital process (and easier to do than you may think).
By analyzing the following points, you can find ways to differentiate yourself and determine how to price your event venue.
Direct and Indirect Competitors
To start, you’ll want to identify the direct and indirect competitors in your market.
- Direct competitors offer similar services and target the same clients.
- Indirect competitors aren’t identical but provide alternative spaces.
Analyze the Competition
Once you have a list of your competitors, it’s time to start analyzing them. As part of your analysis, you’ll want to consider more than just their pricing.
- Strengths and Weaknesses: From location to amenities, think about what competing venues do well and where they fall short.
- Marketing: Exploring your competitors’ websites, social media, and other promotional materials can help you learn how they attract clients.
- Market Share and Reputation: Review their online reviews and any available information about their market share.
- Types of Events and Clients: A little research can help you learn what types of clients and events your competition focuses on.
How to Develop a Value Proposition
Armed with a deeper understanding of your competition, you can start thinking about your own value proposition.
Strengths and Weaknesses
Consider how you compare to the venues in your market. As you do so, it’s smart to think about the following features of your venue:
- Location
- Visual appeal
- Unique amenities
- Special services
- Overall experience in your space
As you develop your value proposition, strive to highlight your strengths and address any weaknesses that you can.
Your Target Audience
Next, it’s time to consider your target audience. Think about what they’re looking for in an event space and what they’re willing to pay for it.
With this information in mind, start putting together your marketing plan. Your goal is to communicate that your venue is the perfect fit for your ideal clients’ upcoming events.
How to Price an Event Space: Event Pricing Models
Once you’ve thought about your competitors and value proposition, you can start looking into different event pricing models.
Each pricing model works best for different types of events. As a result, you’ll see there’s no single pricing method that offers the best return on investment (ROI). Rather, it all depends on the types of events you host at your venue.
Flat Fee
As you decide how to price an event venue, one of the simplest event pricing models is the flat fee arrangement. With this strategy, your venue charges a fixed price to rent it.
This pricing model is appealing to both venues and clients because it offers predictability. The venue knows how much money the event will bring in, while the client clearly understands the price.
A flat fee tends to produce the best ROI when an event has a well-defined scope and is longer. It can also work well if your venue offers an all-inclusive package for events like weddings and parties.
Hourly Rate
Charging by the hour to rent a space is a popular option, especially for events like weddings and parties. With this model, you simply decide on an hourly fee to charge for your venue. Like the flat fee arrangement, this model offers some pricing predictability.
For the best ROI, it’s wise to use the hourly rate for shorter events like corporate meetings and workshops. It can also be helpful to consider this model if you think the event will run longer than anticipated.
Ticketed Pricing
For certain events, it can make financial sense to opt for ticketed pricing. Let’s say you own a hotel that’s hosting a conference. You can decide to charge a set price for each attendee.
Within ticketed pricing, you can set your pricing structure in several ways:
Ticketed pricing tends to offer the best ROI for functions ranging from conferences to shows.
Demand-Based Pricing
In addition to the other pricing strategies, you may want to consider demand-based pricing. Using the model is a great way to maximize your revenue throughout the year.
The concept of demand-based pricing is simple:
- During high-demand times like weekends and holidays, more people may want to book your venue. As a result, you can charge more.
- By the same token, you can offer discounts during low-demand periods to attract more bookings.
This pricing model offers the best ROI for venues that tend to have both slow and busy periods. One prime example is wedding venues.
Add Value to Your Venue With TCFLinen Decor
In addition to having an understanding of how to price your event space, you also need to offer wow-worthy event decor for your guests.
At TCFLinen, we have all the event essentials and extras you need to wow your guests for less. Our stunning selection includes linens, dinnerware, lighting, tabletop decor, artificial flowers, backdrops, and furniture.
By joining our Preferred Partner Program, you’ll enjoy even more special benefits:
- Expert Guidance and Support: Our experienced and helpful team can support you with tasks like choosing the perfect decor or placing large orders.
- High Quality and Low Prices: Thanks to our wholesale pricing model, you can save more when you buy more event decor.
- Speedy and Secure Shipping: Don’t worry about tight event deadlines. We offer fast and reliable shipping options (including overnight delivery).
Knowing how to price an event venue (and relying on TCFLinen for gorgeous event decor) can help make your venue one that guests can’t resist booking!
Sign up as a Preferred Partner today!
Sources
https://www.perfectvenue.com/post/how-to-price-event-space
https://tripleseat.com/blog/best-practices-on-setting-the-right-price-for-your-event-space/
