Missing the Season’s Spirit With Fewer Parties
With America at war against terrorists, apparel entrepreneur Ram Sareen decided to scrap his Arabian Nights-themed holiday party--live camels, harem, hookahs and all. Employees were let down, but it was a bigger blow to the huge party’s planner, who along with other rental firms was relying on the $200,000 affair.
“It was very disappointing,” said George Moussalli, owner of Aioli restaurant in Torrance. “It’s money you count on, and we had been working on it since January.”
Caterers, event planners and party rental firms are declaring this holiday season--usually one of their busiest times of year--among the worst in recent memory, as companies and many individuals have canceled or greatly scaled back their holiday parties.
Some blame lingering shock over the terrorist attacks of Sept. 11 and concerns about security, but experts say a bigger factor is the slumping economy, and a leaner attitude about corporate spending. Salmon and prime rib dinners are being replaced by small charitable donations, and deejays and dancing have been ruled out in favor of afternoon punch and cookies.
“People are doing just a little something to mark the occasion, but they aren’t spending much money,” said Lara Franks, owner of A Corporate Catering Co. in Santa Ana.
Indeed, a survey by business publisher BNA Inc. found that a large majority of companies--76%--are still planning some sort of celebration this year, about the same percentage that did last year. However, the firms surveyed planned to spend just $30 per worker, down 15% from $35 last year. Most of the 448 firms surveyed cited budget constraints for the cutbacks.
Not surprisingly, the biggest entertaining cutbacks appear to be on the West Coast, where studios and technology firms--typically extravagant party throwers--have been laying off employees.
“How do you celebrate when you know all the people around you are losing their jobs?” said recruiter John Challenger.
While the average holiday budget on the East Coast was cut by only 15% to 20%, West Coast budgets were slashed an average of 50%, according to a small survey of companies and event planners by Chicago outplacement firm Challenger, Gray & Christmas.
At Walt Disney Co., where 4,000 jobs have been cut this year, lavish holiday parties for each company division are out. Managers instead are encouraging employees to do volunteer work--although, a spokeswoman said, not all of it on company time.
Similarly, after a round of layoffs earlier this year, game maker 3DO Co. is scaling back last year’s $80,000 holiday dinner and dance at the Museum of Aviation in San Carlos, Calif., to a small bring-your-own-dessert potluck at the company’s offices in Redwood City.
“They told us we just don’t have a budget [for the party] this year,” said Gina Caruso, human resources manager. So, she said, they are instead opening up the company’s bi-weekly meeting to families. Management is providing sodas, and one employee has offered to bake gingerbread cookies that children can decorate. “It will be pretty low key this year,” she said.
Bob Patterson of A Catered Affair in Venice said all of his corporate clients canceled their holiday events this year, and about half of his social clients have called off individual celebrations.
“We’re not in good shape here,” Patterson said. Like retailers, he said, “we depend on [the holiday season], and it’s not coming through this year.”
Party planner Pauline Parry of Good Gracious Events said her business is down 25% this year, and those that remain have slashed their budgets in half.
Times got so tough that Franks, of A Corporate Catering, thought she might have to close her doors. “The business had just started dropping back and back and back,” Franks said. “Then came Sept. 11 and people were calling us all that day and the next canceling.”
Instead, she laid off half her staff and is negotiating an acquisition of sorts by Parry to remain in business.
Not everyone’s calling off their holiday bashes.
Party planners say office high-rise owners are still throwing elaborate lobby parties to hold on to their corporate tenants.
And some organizations are still throwing big fund-raisers.
They’re just having a harder time bringing in sponsors and the huge crowds they have had in years past.
After a go-go period for much of the 1990s, recruiter Challenger said, more companies are getting back to basics. And grand celebrations are getting pared back to gatherings rather than galas.
For Sareen, the decision to call off his huge party was immediate in the wake of the Sept. 11 attacks. Instead, he decided to spend some of the money to cook dinner for people at a local homeless mission. “That wasn’t a celebration, but it was helping people. We had a good time, and everyone had a nice meal.”
For some in the catering business, this scaling down hasn’t been a bad thing.
The old-fashioned ice cream social, for instance, seems to be largely unaffected after initially being frozen out of studios and corporations.
“I don’t see too much of a dead time at the moment,” said Don Whittemore of Dandy Don’s Ice Cream, which sets up sundae bars on location.
“People aren’t having the elaborate dinner presentation that they normally have,” he said, “but they’re doing something.”
“People are not changing how they are operating altogether,” said Mitch Ellner, regional director of human resources consulting firm the Employers Group. “They are just skinnying down or paring down the celebration, not having an employee and their spouse at a celebration or not having alcohol at a party.”
Holiday parties are a less painful item to cut, he said, in the face of sinking revenue.
Patterson puts it this way: “Catering is firecracker money. Once you spend it, it’s gone. People this year are wanting something a little bit more material for their expense.”
Challenger, however, cautioned companies not to skip the celebrating altogether. “Companies need to work at creating meaning” and closeness within them.
“With unemployment rising and the war making people feel increasingly isolated or insecure,” he said, “these holiday parties and connections can be more important than ever.”
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