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.

1

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.

2

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.

3

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.

4

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.

5

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.

6

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.

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

Events appear profitable in P&L but cashflow is weak

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

Per event margins look too high or too low

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

Model is too complex for smaller venues

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.

Related guides

• Build a Driver Based Forecast

• Build a Forecast Accuracy Tracker

• Table Detection Rules

• KPI Cards