On LinkedIn, a few planners posted they were dramatically underbid for programs after the pandemic lockdowns. Huh?! In 2022?
Discounting was understandable in 2020 and 2021. Planners were being supportive partners to their long-term clients, which were hurting in the pandemic. Agencies were being good employers to retain their valued staff. It was even smart psychology to minimize the idle time that could open a door to fearful thinking.
The MICE industry should be raising professional fees for 2022, and adding another stairstep increase for 2023 to cover rising labor costs.
2022 is not the new normal; it is the old normal with a new cost structure. USA inflation hit 8.5% in March, the highest in 40 years! Gasoline and ground beef are up. Hotel costs are rising – for sleeping rooms, F&B, and labor. Airfares are soaring due to a double whammy of surging leisure demand and higher fuel costs.
Salaries are rising too, and talent retention is the #1 topic in the C-suite. With the rebound of live events, most incentive agencies are hiring more staff, but the applicant supply is short of demand.
The business school economists taught us that revenues must rise in tandem with costs. The MICE industry should be raising professional fees for 2022, and adding another stairstep increase for 2023 to cover rising labor costs. Clients might have a gut instinct to resist increases and try to hold fees flat, but where else in the globe are prices flat?
During the last two years, the MICE industry was forced to shift its thinking on everything. Right now, 2022 is a more robust version of 2019 for the incentive travel industry. Close the door on the Covid years and old thinking. Look forward. Quote planning services using revised labor rates. Don’t discount your value.