Who knew that a ship stuck in the Suez Canal for six days in March would teach the world more about the international supply chain than our economics professors ever could. Rest in power, Ever Given. Even now, closing in on a year since we meme-ified cargo, backed up ports and Covid variants (welcome to the party, Omicron) have coupled with monumental federal spending and a labor shortage to continue pushing inflation rates sky high.
Because inflation erodes the value of cash — and recent data indicates prices have rocketed a whopping 6.2% in the past year — it encourages consumers to spend money stocking up on items that are slower to lose value. But, does that include events and experiences? Once again we find ourselves asking, what’s the true value of XP?
Here are three ways rising inflation rates impact XP, and how best to communicate these changes to the stakeholders involved.
The cost of doing business is up
We’ve all had to spend more money amid the pandemic to hold events safely. From booking larger venue spaces to accommodate social distancing and hiring additional staff to manage onsite vaccine checks and Covid testing to the rising costs of goods and materials, more is added to the budget every year.
Additionally, workers are asking for higher wages — and they’re perfectly justified. When vendors and brand ambassadors ask for 5% or 10% raises, event attendees are going to have to supplement that cost in order for planning to proceed.
➡️ How to communicate this change
There are a few ways to do this. You may choose to list ticket price increases as a surcharge on your event site’s checkout. If you go in this direction, be sure to provide detailed information on how you got to the exact number added.
Another way is to be transparent prior to checkout. Add an informational section to your event website on how the way you plan to manage health and safety contributes to increased costs and the importance of fair pay for your staff. Guests can even digitally tip onsite workers.
While you can’t change the cost of traveling, you can take on the responsibility.
The cost of traveling is up
While prices for just about everything seem to be going up, the rise in travel costs is particularly steep because there’s so much more demand this year compared to last.
An October Washington Post report revealed that the cost of almost every aspect of travel increased last month. According to the U.S. Travel Association’s Travel Price Index, travel-related prices jumped 14.4% in October of this year in comparison with the same month last year. And domestic airfares for Christmas flights are averaging about $390, up 55% from $250 in 2020, according to Hopper, an app that tracks airline fares.
➡️ How to communicate this change
If many of your guests will be traveling from out of town, you won’t be able to save them money — but you can save them time. Sweeten the deal and include travel package options that bundle hotel and/or ground transportation costs with their ticket prices. Or, go one step further and offer custom concierge services for an additional cost.
We posed this question at the top, but it bears repeating, what’s the true value of XP? For many right now, it’s an escape. Your attendees want to feel safe and supported while they step away from their worries (ironically, inflation is probably a major source of stress). While you can’t change the cost of traveling, you can take on the responsibility.
The cost of waiting is up
A common response to declining purchasing power is to buy now rather than later. Cash will only lose value, so consumers are incentivized to fill up their gas tanks, stuff the freezer and buy bigger shoes for the kids. Notice what we didn’t say: Buy food and wine festival tickets or stock up on immersive art exhibitions.
In many respects, we’re no longer competing with other major activations, but with spending on essentials like home repair or vehicle maintenance. While it’s irresponsible to position your upcoming festival as an alternative to family essentials, it’s up to XP pros to market their events and experiences with a sense of urgency.
➡️ How to communicate this change
Traditionally, urgency in experiential marketing sounds like, “This is Cher’s last farewell tour, we swear! Get your tickets now before she changes her mind!” And while communicating that an experience has a shelf life will always be an option, there are other ways to nudge action.
As part of your activation, partner with a local nonprofit to support families struggling with rising consumer costs in your community. Co-promote the event together, highlighting charitable activities onsite such as a clothing drive and a merch raffle, or simply donate a percentage of all ticket sales directly to the nonprofit. Your guests will feel better treating themselves to an experience knowing they’re giving back to those who need immediate assistance, too.
Events will always be around to provide an escape from reality, they just might look a little different these days. Even as the cost of purely existing continues to rise, the economy eventually balances itself out over time. As long as XP producers acknowledge their attendees’ struggles and call out exactly why costs are up, there will be consumers ready to pay and, we hope, pay it forward.
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