As an event organiser, I am, in some ways, an amphibian – I provide services for other project owners and clients ike a classic event or PCO agency. At the same time, I am the owner, developer, and leader of several projects, taking 100% responsibility for the result and execution. While this dual role may not be the norm, it provides me with direct, unobstructed insight into both sides. Above all, my position helps me understand what it means to be a project owner.
My first-ever director, Srečo Peterlič, lectured me about who is truly the owner of a project. He divided the relation with clients into three elementary models:
- Model A: the client takes 100% responsibility, including the risks and profit
- Model B: the agency and client divide the risks and profits (50:50 or similar)
- Model C: the agency takes 100% responsibility, including the risks and profit
Who is the actual owner of an event, or its producer, that carries the holistic financial responsibility, is straightforward. With the swift development of AI, not much has changed.
In reality, project ownership is not merely a financial category. The owner is the person who bears the risks and profits, makes key decisions, and, ultimately, takes responsibility for the project’s good or poor reputation. In an ideal world, all this is managed by one pair of hands. In reality, this is rarely the case. Here is where problems begin. The definition should be simple: the project owner is the person who, at the project’s end, cannot issue an invoice to anyone, either financially or legally.
Every subcontractor must clearly and without reservation answer what is included in the price and provide the entire price breakdown.
If you are operating within Model A or C, one factor becomes paramount: you must surround yourself with a circle of partners you can genuinely trust. The inner circle comprises hotels, conference centres, local DMCs, catering providers, and multimedia suppliers. In short, those who directly co-create the experience. The outer circle comprises logistics companies, airlines, and other supporting partners that make anything possible.
Transparency as the guiding principle
Once you assume the role of project owner, one thing becomes apparent: without transparency, nothing functions, particularly when it comes to structuring and justifying pricing. In practice, this means that every subcontractor must clearly and without reservation answer what is included in the price and provide the entire price breakdown. In this light, project owners are fully justified in expecting that any agency delivering part of the services will, at any time, disclose its cost structure, present invoices, and clearly explain where value is being created.
Indeed, this sounds familiar to you. And yes, your clients demand the same from you in virtually every public or private tender. Yet why, then, does the market remain permeated with conflicts, dissatisfaction, and situations that often resemble construction annexes? The answer is simple and deeply human: greed. Or more precisely, short-term optimisation at the expense of a one-off result that completely overrides the logic of long-term collaboration. These dynamics are driven by negotiations and tactical manoeuvring that, ultimately, are always paid for by the client. In the hospitality industry, matters have at least partially improved with ORS systems, which now allow one to verify whether a quoted price is valid. In event organisation, however, vast areas remain where such verification is not possible. It is precisely there that significant room for manipulation at the expense of clients and project owners emerges.
What is a fair agency fee?
At their core, services provided by event agencies are intellectual services. In other words, they are the work of agency personnel, from senior consultants to junior team members and their assistants. Naturally, pricing differs across these profiles. Still, hasn’t this been self-evident in the consultancy world for some time? An agency is, in essence, a consultant to the client, and its billing model should reflect that. This entails a clear agency fee based on time spent and team composition, alongside a separate, transparent accounting of direct costs, from travel expenses, logistics, and similar items. It does not get more transparent than that.
Why, then, do so many agencies in our field still conceal the cost of their work within supplier pricing?
Clients generally understand this, just as they understand the technician’s hourly rate for repairing a broken washing machine. Why, then, do so many agencies in our field still conceal the cost of their work within supplier pricing? This leads us to the well-known paradigm underlying the so-called agency fee. The reason why prices are often not presented transparently has already been stated: short-term optimisation, or, put bluntly, greed. Such a model functions only so long as no one double-checks the prices. It does not, however, build trust. For that reason, a transparent agency fee model is the only one that is sustainable in the long term.
Transparency of the agency fee model
The agency fee is the amount charged for the agency’s expertise, experience, network, references, and business credibility. It must be clearly and explicitly stated in the proposal. It is not merely a number; it is a statement and a declaration that the agency will operate transparently, in no grey area, and will distinctly separate its fee from the actual project execution costs. It is also a commitment that the agency will not “play games” with, nor will the suppliers. Above all, it is a signal that you are dealing with a serious and credible agency; one that does not jeopardise its reputation for short-term gains or under-the-desk arrangements. This is how most reputable, top-tier production agencies operate. Everything else is a compromise, and the client invariably bears the brunt of the backlash.
What does this mean in practice? For serious projects, a fair agency fee typically ranges from 10% to 15% of the project value, depending on complexity, scope, and, above all, the level of responsibility the agency assumes. In more demanding productions, higher-risk engagements, or projects where the agency carries responsibilities beyond mere execution, such a fee may be higher. This is entirely legitimate, provided it is clearly defined and transparently justified. It also implies 100% transparency regarding costs without exception or compromise.
Where do margins remain hidden in a budget?
There are multiple ways, but suppose we begin with the fundamentals. Always start by scrutinising the highest numbers in the budget. That is where the biggest stories lie, and also where the largest margins are most easily concealed. The principle is simple: the larger the amount, the fewer people examine it rigorously. So start there. Demand a breakdown. Benchmark against the market. Ask questions until you receive a clear answer. If you do not receive one, that in itself is an answer. The first warning sign is ambiguous prices. The second is “packages” that cannot be deconstructed. The third is responses along the lines of “this is the norm.” Ultimately, the rule is very straightforward: if, as the project owner, you do not understand precisely what you are paying for, you have a problem. Usually, the issue is rarely on your side. If something is hidden, it is not because it is complex, but because someone does not want you to see it.
Ten of the most typical examples in practice:
1. Transport without a list of specific transfers
A round sum without a breakdown is no longer acceptable without clear answers: who, when, with what, and for how long. The cost cannot be justified.
2. “Exclusive rentals” without market comparison
Renting a unique venue may appear justified at first glance. The issue is that such prices are rarely tested against the market. Where there is no comparison, prices quickly lose touch with reality.
3. Open bar
“Up to 3 hours” sounds clear, but it is not. Who tracks the time, and who controls consumption? Without this, you pay the maximum, and may face an unpleasant aftermath once the event is over.
4. Beverages charged by actual consumption
A classic source of conflict. Consumption exceeds the number of attendees. Who measures it, and who validates it? Without control, this becomes an open-ended account.
5. Prices for technical equipment without specification
“AV equipment,” “additional power.” It sounds professional, yet conveys little. Without a clear specification, the price cannot be verified.
6. A basic price omitting essential elements
Rental without cleaning, security, or electricity. What, then, is actually included? If the essentials are excluded, the price is not realistic.
7. Last-minute changes that “miraculously” inflate the project cost
Minor changes, immediate cost increases. Who sets the price, and on what basis? If this is unclear, it is not an exception but their rule of thumb.
8. Subcontractors without direct visibility
You do not know who is actually delivering the service or at what price. Without visibility, you do not know what you are paying for.
9. Agency fees embedded in supplier pricing
The fee is nowhere to be seen; everything is “included.” If it is not separated, it is not transparent, and if it is not transparent, it cannot be evaluated.
10. Free of charge, but not really
“Free” typically means the cost has been embedded elsewhere. If you do not know where, you are paying for it twice.
The list is endless. But the point is not the list. The pattern is unmistakable. Once you recognise it, everything becomes quite simple: either you understand what you are paying for, or you do not. If you do not, that is not complexity, but deception.
peace of mind is always the most expensive product.
Last-minute panic
Suma summarum, most problems in projects do not arise at the beginning, but at the very end. We refer to this as last-minute panic. This is precisely the moment that certain agencies understand perfectly and exploit. A menu change three days before the event. An additional VIP guest. A schedule shift. Floral decoration no one notices. A display panel that was supposed to be “free,” yet ultimately costs more than if it had been brought from home. Every detail has its price, and that price is always higher than at the outset. Why? Because at that point, you are no longer purchasing the optimal solution; you are purchasing peace of mind. And peace of mind is always the most expensive product. This is why project management is critical. Structure, discipline, and timely decision-making are not bureaucracy; they are protection. Once panic sets in, the rules no longer apply. Only one logic remains: how much you are willing to pay to see the project through.
If you’ve been doing something for years, you’re onto something
If a local partner tries to convince you otherwise, it usually does not end well. This is also a matter of values, particularly in the context of sustainable event organisation, where a very simple rule applies: less is more. I had an insightful experience on one of my first major projects. We organised a European sales conference for a well-known Asian automotive company. One lesson from that experience has stayed with me ever since. The client was unequivocal: in terms of catering, they wanted exactly what had been previously tested, nothing more, nothing less. They did not want excess food or food waste. Because this was not a matter of logistics, but of culture. Anything else was unacceptable to them. This is not a story about food. It speaks volumes about respect, values, and culture, though.
This is something we often overlook in our industry. Even in event organisation, a simple rule applies: one person’s freedom ends where another’s begins.
Editorial by Gorazd Čad
