Cost Saving A/V Secrets you Need to Know

In my 30 years’ experience in the A/V presentations business, during which I have worked as a freelance producer, equipment rental manager/salesman and director of A/V services for major hotels, I’ve found two main venue selection issues that my clients have mentioned on a regular basis. One is the perception that A/V equipment rented from a venue is always more expensive than seems reasonable. The other is the apparent excessive charges levied for labor (technicians). These two issues have come into sharper focus with the recent economic downturn and the specter of reduced meeting and event budgets. Need to get more bang for your A/V buck? Here’s how.

Venues: What You May Not Know

Generally speaking, venues that offer in-house A/V services enter into fixed-term contracts (three or five years) with external vendors, including national A/V service companies, which then deploy their own equipment and staff to work on events for the venues’ end-clients. Venues and in-house vendors then divide the revenue from the provision of A/V services.

To make the arrangement viable for both venue and in-house vendor, rental charges for many items of equipment are priced higher than rental charges levied by external A/V rental companies. End-clients are also sometimes contractually obligated to use in-house facilities when booking events, which may mean limited options regarding rental and service charges.

As for labor, many venues and internal vendors base their rates on the local A/V technician union’s hourly rate. In most major cities, hourly rates for union labor start at $25 to $30 per hour (call your local union hall for precise details), but are billed to end-clients at $45 to $50 per hour. Rates vary somewhat depending on the particular technical specialist employed. Charges for weekends, holidays, overtime and early starts/late finishes can push labor rates even higher.

Venues and their vendors, however, frequently utilize non-union, hourly or salaried technicians in their day-to-day operations (average pay: $15 to $20 per hour), but charge clients the prevailing union labor rates. Unless the union and in-house vendor have an established agreement to bill union and/or non-union labor at the same rates (and you can request a copy from the venue and the union), ask a few pertinent questions to see if you can negotiate a better labor rate. All local city A/V unions’ halls publish rates, and can be contacted directly for a quote.

While labor costs obviously include some allowance for items such as base pay, health and other benefits, tax, workers compensation, and social security, venues and vendors split any labor revenue profits by up to 50 percent. The vendor usually carries the cost, and the venue derives direct revenue.

Negotiating — and ‘De-negotiating’

In today’s economic environment, you may have additional opportunities to negotiate better rates for labor and equipment. Venues and their in-house vendors need business, and you need equipment. It should therefore be easier to agree to rates that are fair and reasonable for all concerned. Everyone deserves to earn a reasonable living, but sometimes it becomes necessary to share the pain to share the gain, as they say.

More and more clients are respectfully declining venue in-house A/V service exclusivity conditions in meeting and event contracts. Many are also “de-negotiating” any clauses that might require them to pay “A/V corkage” (for bringing in their own equipment and/or for lost revenue compensation for the venue and its in-house vendor). This is basically a matter of reading the fine print and striking out the A/V exclusivity clause with the stroke of a pen!

You can also ask if there are any exclusivity clauses for A/V services in your event contracts, and request that they be removed. This does not necessarily mean you won’t use in-house services; it just means you wish to exercise your right to shop around.
The cost savings obtained from paying open-market rates for equipment and technicians can be significant. If you rent all your equipment from a single external vendor or your established service partner, it will be delivered, installed and even operated for much less. You pay for the equipment rental itself, a one-time delivery/collection charge, technical operatives (with no cost markups), and no revenue is divided between the parties involved. If you can negotiate a fixed hourly rate for labor (or even a price for the entire project), the real costs of A/V equipment rentals will drop considerably.

Working with In-House Vendors

Many independent and in-house planners have long-established relationships with production companies and/or equipment rental companies who serve your general presentation needs very cost-effectively. When a venue’s vendor exclusivity deal separates you from your regular A/V service partner, it can result in operational difficulties during the event. This is usually because the in-house vendor is not very familiar with your working practices and expectations.

Even in cases in which you cannot avoid an exclusivity arrangement, you still have the right to use an established A/V service provider in a management role, so include a representative from your existing A/V vendor in the event staff. This person can supervise A/V equipment installation and manage the deployment of labor resources to ensure continuity of service delivery. In-house staff may know the venue, but this does not mean they know the client.

In-House A/V: The Benefits

The cost of in-house A/V services may be higher, but remember a few other things you’re paying for:

Short response time. “The in-house team is either in the room or just steps away, so they can respond immediately,” says Scott Gubrud, director of sales and marketing for the Park Hyatt Beaver Creek in Beaver Creek, Colo. “In addition, in-house providers generally maintain backup equipment and technicians on-site and in the immediate area.”

Greater efficiency. “The venue and preferred vendor have most likely provided A/V services for this venue before and know exactly what equipment you will need for your event. The preferred vendor or venue’s A/V specialists will also know their way around the venue better than any outside vendor would,” explains Matt Silver, regional director of catering for American Golf Corp. “It creates efficiency on the day of your event and also eliminates multiple time-consuming visits to the venue to meet with different A/V suppliers that are unfamiliar with the venue.”

One bill. “Because an in-house A/V provider like PSAV is a seamless part of the hotel team, meeting planners have the advantage of a single master bill from the hotel,” says Gubrud of the resort’s in-house A/V provider. “In-house event technology managers typically have a much better relationship with the hotel staff and are able to ensure a seamless transition from catering to event technology.”

Familiarity with the technology. “In-house techs are familiar with the technology inherent to the space, not to mention the backbone that supports it,” explains Bill Decker of The Hub. “For example, The Hub has point-to-point T1 connections, redundant high-speed connections, voice over IP phones, etc., that we train our tech staff specifically to handle.”

No travel costs. “Often, meeting planners working with outside providers forget to include paying for traveling technicians, shipping costs and hotel rooms,” Gubrud points out. “These costs increase total event costs and should be considered in any proposal.”

It pays to negotiate every element of your event’s technical needs. By avoiding restrictive and expensive exclusivity arrangements, retaining your existing supplier, shopping around for the best equipment rental prices, driving a bargain on labor rates and actively managing A/V resources, you really will get more bang for your buck.