Editor’s Note: Connecting the Dots is a series of monthly conversations with Michael Dominguez, President and CEO of Associated Luxury Hotels International. The series examines issues in the global economy that will “connect the dots” to be helpful not only in business but in life as well.
As we've ended Q1 of 2025, I can tell you budgets overall have been more moderate and more consistent with what we've seen in the past. So, what have we been hearing from planners and what should we really be looking at?
First and foremost, here's good news. Airline pricing had come down last year, now had started to increase late last year on a year over year basis, and in the first quarter. But what we've seen is a decline in airfare over the last 45 days. That's good news for everybody's budgets as they're starting to plan ahead.
One of the things I've mentioned over the last few episodes is we've been talking about the shift in population to the southeast and into the middle of the country, and one of the things I think you really have to be considering is where your attendees are coming from, and where they used to come from as you're comparing budgets. It may increase budgets if they're coming from a longer distance. They may be coming through an airport that doesn't have direct access, which they may have beforehand. It's just important to know where your attendees are coming from because that will have an impact on budgets as well.
Food and beverage, here's the good news. Food and beverage pricing is starting to moderate and slow down. Eggs have hit their peak, and they are starting to move the other direction, so overall some of that pressure is being removed. However, those prices are still 20% elevated to 2019, so it doesn't mean food is getting cheaper, it's just not going to be elevated as quickly, and that's an important one.
I think it's an important time, and we've been talking about this to really take an opportunity to look at menu architecture. In my past life, we did in an experiment on food waste and sustainability, and one of the things we noticed out of it was our ability to actually be more effective with menu design. What I mean by that it's very simple. What we found is when your group arrives on its first night, and let's say it's a three day program – and I should qualify this by saying I spent my first nine years in food and beverage banquets and operations – and when you look at this, when we do a BEO (banquet event order), if I have 100 people for an American breakfast, my cooks know exactly how many sheets of eggs I'm doing, how many sheets of bacon, how many sheets of potatoes. What we found is on your first day, what people eat at that breakfast, the amount of food they eat or consume versus what they're going to consume on day three, after you have fed them every hour and a half in breaks, over a three day meeting and probably after a gala dinner, will be much lighter than what you would have done in the front end. The reason that's so important is wouldn't it make sense that on that last day, great day for a continental breakfast, great day for something lighter for everybody as we've had so much food throughout the week. It’s important to actually think of your food design the same way as you get later into the week or later into your program; your lunch should be a little bit lighter, knowing you're going into a gala dinner and knowing you've been eating for two and a half days. Those are the things I don't think we really consider, and it's not necessarily a savings; it could be in certain areas, but in other areas it could allow you to spend more money on the gala dinner or in other areas around a reception or anything else you may want to do.
It's really important to not just be checking the boxes and to be very, very intentional around this. One of the questions we continue to get from everybody is around AV and the cost of AV and what that looks like. One of the things I do recommend to planners as well is, and I think it's an important one, to actually stop and ask yourself: what is a good to have and what's a must have if the AV budget is really hitting your overall budget. What I mean by that is all of a sudden everybody is doing everything digitally at a program. Is it necessary? Yeah, it's necessary for a general session. Is it necessary in other pieces of the program? I'm not sure. That's something you're going to have to answer.