September 30, 2008 / 5:09 PM / 10 years ago

Holiday party plans fizzle with Wall Street turmoil

SAN FRANCISCO (Reuters) - As the profit party ends on Wall Street, the American impulse to celebrate could lose its fizzle like day-old champagne.

Company parties will still go on this holiday season, say caterers, event planners and others, but many businesses are caught between the need to scale back costs and a desire to reward employees who have been on a rough ride recently.

“Parties need to reflect the mood of the times. It’s not going to be a time for big to-dos,” said John Challenger, CEO of employment consultancy Challenger, Gray & Christmas, which will release a survey on the extent of this season’s holiday parties later this fall.

It may be hard to find the festive spirit this year. The Bush administration wants a $700 billion bailout to stem a meltdown in the U.S. financial industry, global markets are in turmoil and one major U.S. bank or investment firm after another has failed or sought a hasty buyout in recent weeks.

When it comes to year-end holidays, that could hit both the lavish galas hosted by once-proud financial firms and the more modest office parties across corporate America.

Party planners have seen few outright cancellations, but attest to widespread caution by corporations that were willing to shell out tens, or even hundreds of thousands of dollars for parties in recent years.

Sensing the mood, New York’s The World Bar said this week it was slashing its private party prices by a third to $50 a head. The bar, atop the Trump World Tower, still serves a $5 cocktail called the “Economic Punch” that made its debut in 2002.

At Gotham Hall, a premiere New York venue, some 5 percent to 10 percent of the clients are scaling back their party plans, whether shortening party hours or cutting back on flowers, said Managing Director B. Allan Kurtz.

Still, an equal number are spending even more — a paradoxical show of bravado in difficult times.

“We have several (parties) that are full speed ahead. They’re looking at enhancing the event, doing more to counteract a little bit of the malaise ... and say: ‘We’re here, we’re healthy’,” said Kurtz.

He cited specialty wine bars or aerialists that one company is contemplating adding.

The average holiday party at Gotham, including food, liquor and service, is in the six figures.


But no matter the budget, over-the-top ostentation is frowned upon. Don’t expect to see Roman gladiators or ice sculptures like the Michelangelo David urinating vodka into crystal goblets at a $2 million birthday bash in 2001 thrown by Tyco International’s former chief executive.

“Everyone is aware of money. Even the VC (venture capital) firms don’t want to appear like they’re spending $500 per person when times are so tight,” said Kyle Edwards, vice president of sales and marketing for event planner California


Planners said that prime December dates are booking up more slowly, but expect them to fill up, eventually.

“The main thing the economy has done is it has made people more pensive or say, ‘Let’s see,” said Edwards, whose firm’s past clients have included Microsoft Corp, Google Inc and United Airlines.

While large companies book their events well in advance, smaller ones “are waiting to see what the fourth quarter is like and then there will be a rush to fill (open dates,)” he said, adding that most booked clients plan to spend $200 to $250 per head.

A spokeswoman for Hornblower Cruises and Events, a yacht cruise operator in the San Francisco, Los Angeles and San Diego areas, agreed that companies are deliberating more this year.

“Companies follow trends. If someone hears Google is not going to have a party, they think we won’t have one either,” Hornblower’s Tegan Firth said, giving a hypothetical example.

New York’s famed Rainbow Room atop Rockefeller Center has had no cancellations and continues to take holiday bookings, a spokeswoman said.

Well-known caterers and party planners in New York and San Francisco also said business was strong, with few, if any cancellations.

“Extremely opulent” Silicon Valley parties are still going strong, according to preeminent San Francisco caterer Paula LeDuc. New York’s Serena Bass, meanwhile, said she is shocked no one has called yet to cancel parties, including hedge funds hit hard by the Wall Street turmoil.

“They haven’t canceled their events,” Bass said, quickly adding: “Maybe they will tomorrow.”

Editing by Andre Grenon

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