> For the complete documentation index, see [llms.txt](https://help.modelreef.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.modelreef.io/use-cases/hospitality-and-events-functions-events-venues/event-function-profitability-model.md).

# Event/Function Profitability Model

This guide explains how to build an event and function profitability model for hospitality and events businesses in Model Reef.

You will:

* Represent events, functions and packages in the branch and variable structure.
* Build drivers for guests, ticket pricing, packages and ancillary spend.
* Model direct costs, staff, room hire, AV and third party services.
* Produce per event profitability, margins and cash impact.
* Roll event models into venue and group reporting.

Model Reef does not schedule events or manage bookings. It models the economics of events using structured drivers and variables, not a diary or ticketing feed.

## When to use this pattern

Use this pattern when:

* You run functions, corporate events, weddings or ticketed shows.
* Event revenue and costs are a material part of your business.
* You want to understand profitability at event, package and venue level.
* You need to compare event types, channels and pricing options.

It can be combined with:

* Seasonal Revenue Planning
* Staffing Rosters for Events
* Multi Venue Event Consolidation
* Venue Level Forecasting Pack

## Architecture overview

Event profitability modelling uses:

1. Structure
   * Branches for venues and event types.
   * Optional branches for key named events or series.
2. Revenue drivers
   * Guests, tickets or covers.
   * Package prices and upsell items.
   * Ancillary revenue such as bar, AV or add ons.
3. Cost drivers
   * Per head food and beverage costs.
   * Staffing, room set up, cleaning and security.
   * AV, entertainment and external suppliers.
4. Outputs
   * Per event and per package margin.
   * Venue, channel and period level profitability.
   * Integration into P\&L, cashflow and dashboards.

{% stepper %}
{% step %}

### Define venues, event types and branches

In the branch tree, create a structure such as:

* Events Business
  * Venue - Ballroom
  * Venue - Rooftop
  * Venue - Offsite Catering

Within each venue, you may have branches for:

* Event Type - Weddings
* Event Type - Corporate Functions
* Event Type - Conferences and Exhibitions
* Event Type - Social and Private Events

For very large or repeat events, you can create dedicated branches, for example:

* Event - Annual Conference
* Event Series - Summer Concerts

These branches will hold revenue and cost variables for those events.
{% endstep %}

{% step %}

### Build guest, ticket and package drivers

In the Data Library, create drivers that describe demand and pricing, such as:

* Number of Events per period by venue and type.
* Guests per Event or tickets sold per event.
* Package types and prices, for example standard, premium and VIP.
* Expected attach rates for extras such as drinks packages, AV or entertainment.
* Seasonality and day of week effects where relevant.

Represent these as time series so you can:

* Forecast how many events you expect each period.
* Forecast guest counts per event for each event type.
* Apply per guest and per event pricing consistently.

Use these drivers in Revenue variables such as:

* Revenue - Event Packages - Weddings - Ballroom.
* Revenue - Room Hire - Corporate Functions - Rooftop.
* Revenue - Bar and Beverage - Events.

Formula examples include:

* Package Revenue = Events × Guests per Event × Package Price.
* Room Hire Revenue = Events × Room Hire Fee per Event.
* Bar Upsell Revenue = Events × Guests per Event × Spend per Guest.
  {% endstep %}

{% step %}

### Model direct event costs and contribution

Create COGS and Staff variables for direct event costs, for example:

* COGS - Food per Guest - Weddings.
* COGS - Beverage per Guest - Corporate.
* Staff - Event Front of House.
* Staff - Event Back of House.
* Opex - Cleaning and Turnaround.
* Opex - Security and External Services.
* Opex - AV and Production.

Attach drivers to these cost variables, such as:

* Food Cost per Guest by package.
* Beverage Cost per Guest by package or open bar structure.
* Staff Hours per Event by role and event type.
* Hourly wage rates with on cost percentages.
* Fixed service costs per event (for example AV minimum, security minimum).

Compute per event cost using formulas such as:

* Food Cost = Events × Guests per Event × Food Cost per Guest.
* Staff Cost = Events × Hours per Event × Rate per Hour × On Cost Factor.
* AV Cost = Events × AV Cost per Event.

You can derive per event contribution margin by comparing event revenue and direct costs in custom reports or dashboards.
{% endstep %}

{% step %}

### Handle deposits, payment timing and cashflow

Events often involve deposits and staged payments. Represent these using the timing engine by:

* Setting accrual timing when revenue is earned (for example on event date).
* Using delays and schedules for deposits and balance payments.

Common patterns include:

* Deposit paid at booking with a long lead time.
* Balance paid shortly before or after event.
* Supplier payments due before or shortly after event.

For example, you might specify:

* 30 percent deposit on booking with a delay of 0 or 1 period.
* 70 percent balance in the period of the event.
* Supplier COGS and staff costs paid with short delays.

This will produce realistic cashflow for events and show working capital effects in the Cashflow Statement and Cash Waterfall.
{% endstep %}

{% step %}

### Build per event and per package profitability views

Create reports and dashboards that show:

* Revenue, direct costs and gross margin by event type and venue.
* Contribution per event and per guest.
* Revenue and margin by package tier.
* Profitability per channel (for example direct, agent, online platform).
* Profitability by season or day of week where that matters.

Use filters and branch selection to focus on:

* Individual high value events.
* Groups of similar events, such as corporate packages.
* Entire venues and the mix of events they host.

This detail helps sales and operations teams design, price and position products.
{% endstep %}

{% step %}

### Use scenarios for pricing, mix and utilisation

Clone the base model into scenario models to test:

* Higher or lower pricing for packages and hire.
* Different mix of event types and packages.
* Changes in utilisation of each venue.
* Different commission rates for agents and partners.
* Adjustments to staffing levels and cost structures.

In each scenario, adjust:

* Guest and event drivers.
* Pricing and package mix.
* Direct cost and staffing drivers.
* Deposit and payment timing rules where needed.

Compare scenarios using:

* Per event and per guest profitability.
* Venue and group level EBITDA.
* Cashflow and funding requirements for event driven businesses.
* Sensitivity to sales, price and cost assumptions.
  {% endstep %}
  {% endstepper %}

## Check your work

* Guest, event and pricing assumptions reflect recent actuals or realistic plans.
* Direct cost drivers match how food, beverage, staffing and services are actually costed.
* Cashflow timing for deposits and balances reflects commercial practice.
* Scenario results are understandable for both finance and commercial teams.

## Troubleshooting

<details>

<summary>Events appear profitable in P&#x26;L but cashflow is weak</summary>

Check deposit and payment timing and ensure supplier and staff payments are represented correctly.

</details>

<details>

<summary>Per event margins look too high or too low</summary>

Review cost per guest and per event assumptions, and check that all material direct costs are included.

</details>

<details>

<summary>Model is too complex for smaller venues</summary>

Use more aggregated drivers, for example typical revenue and cost per event type, and reserve detailed package and item modelling for larger venues or key products.

</details>

## Related guides

* [Build a Driver Based Forecast](/how-tos/core-modelling/build-a-driver-based-forecast.md)
* [Build a Forecast Accuracy Tracker](/how-tos/scenarios-and-planning/build-a-forecast-accuracy-tracker.md)
* [Table Detection Rules](/help/importing-and-data-inputs/table-detection-rules.md)
* [KPI Cards](/syntax/chart-and-table-syntax/kpi-cards.md)