It may be BYOB as fewer firms plan holiday parties

SAN FRANCISCO Wed Oct 28, 2009 12:21pm EDT

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SAN FRANCISCO (Reuters) - The U.S. economy may have begun to recover in 2009, but holiday office parties are sinking even further into the dumps.

Fewer companies plan to break out the bubbly this season than in 2008, at the height of the global financial crisis, according to a survey from Challenger, Gray & Christmas Inc.

Only 62 percent of about 100 companies that responded to the survey were planning holiday parties this year, down from 77 percent a year ago and 90 percent in 2007, as recession-era cuts extended from benefits and profit-sharing to Santa hats and disc jockeys.

"For companies that have recently announced layoffs or other significant cost-cutting measures, such as wage freezes, it would be difficult to justify, let alone get in the mood for a holiday party," said John Challenger, the firm's chief executive officer.

Challenger said it sends out roughly 1,000 survey requests to human resource executives at a wide variety of U.S. companies. Each year, roughly 100 respond on the firm's anonymous website.

At Gotham Hall, a premiere New York venue, Managing Director B. Allan Kurtz said he's only recently begun booking some of his most popular event days for the season. And, they're doing it on the cheap.

"No one's gangbusters like they've always been," he said, adding that he hasn't seen an atmosphere like this in the 25 years he's been in the business.

Last year, Kurtz said that pre-planned events scaled back, opting instead to reduce expenses by switching dinners for cocktail parties, or passing on the seafood. This time around, they're waiting till the last minute to book the event.

"We've learned to be more flexible," Kurtz added, saying the hall has forsaken some profit to match customer's budgets.

The Challenger survey found that of companies going ahead with holiday festivities, 64 percent said they would spend the same amount as a year ago, and 28.5 percent are spending less.

SKIMPING ON SANTA HATS

Nearly two-thirds said they would do without a caterer, event planner or other outside service. That could mean an employee will be conscripted to set up the party -- or that workers would have to help stock the refreshment table themselves.

Compare that with the heady days of late 2006, when 80 percent of companies planned holiday parties and nearly one in three planned to boost their budgets significantly.

Not everyone has felt the pinch, however.

The Chicago Ritz-Carlton's General Manager, Michele Grosso, said that some customers who didn't call last year are actually booking for this holiday season. But he said that they're spending less and contacting many more establishments to get estimates than they used to.

While the Hornblower Cruise Lines of California saw some customers reconsider as the financial crisis deepened last year, the ship-operator has not cut prices this time around.

"They're still looking for the elements that make a holiday party extra-special," said Hornblower representative Tegan Firth. Still, she said, business isn't like it was in 2007, or even the days before the dot-com-bust at the turn of the millennium.

This year's dampened spirit comes as no surprise as companies cut more jobs and Americans try to save as much money as they can for fear of even worse days ahead.

Equifax credit bureau said earlier this month that new credit cards issued were down more than half from July 2008, and Americans' savings rate rose to an estimated 3.71 percent in the third quarter.

Challenger also said employees who will get to party on the company dime this year should refrain from any drunken hijinks.

"Now is not the time to draw attention to oneself with embarrassing conduct at the holiday party," he said, "particularly at a time when everyone's job is at risk of being downsized."

(Editing by Michele Gershberg, Lisa Von Ahn and Valerie Lee)

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