Corporate Holiday Party Forecast: Less Bleak in Los Angeles?

By Alesandra Dubin November 12, 2008, 12:08 PM EST

With the grim news about the overall state of the global economy has come—expectedly—grim news about corporate holiday parties, which many companies have scaled back or cut altogether this year. For instance, in New York, home to many financial institutions and publishing houses, parties fall almost daily. In Los Angeles, although some parties have indeed been axed, the news so far might not be as bad as the national average, despite an economically destructive writers strike that stretched into the calendar year. In town, the overall strategy seems more to be about cutting back than cutting out the annual employee celebration.

Although Paramount canceled its holiday celebration in favor of a tree-lighting ceremony and time off for employees, another major Hollywood studio will go forward with a party for about 3,500, although it's scaling back some decor and rentals. Nutrition product seller Herbalife will host a party produced by Sterling Engagements at Union Station on December 6 for 800 to 900, and has eliminated some of the details like customized casino chips. Heineken's budget for its bash with NMA Entertainment & Marketing at Apple on the same date has not changed from last year.

Smashbox Cosmetics will actually increase the scale of its holiday party—as its company has seen significant growth—and will this year host its party on a yacht in Marina del Rey. (Last year, the party took over Smashbox's own space.)

“Now, the conversations are about which elements we should continue to pay for and which we can hold back on without compromising the guests' experience,” says event producer Joe Moller. Event producer Tony Schubert from Event Eleven records about a 25 to 30 percent drop in his clients' holiday party budgets. Jason Wanderer from Precision Event Group notes perhaps a 50 percent decline, but says, “Due to the economy, our clients really want a stellar holiday experience for their employees even on a limited budget, due to concerns of layoffs, and to boost overall moral.”

One holiday party for a firm in the construction business—an industry hit hard by the economic struggles—cut its holiday party budget by 50 percent this year. Its producer, Andrea Wyn Schall of A Wynning Event, paraphrased her client: ”'Look, we want to hold on to the event, but we need to scale way back in order to even sell this to the president of the company. What can we do?'”

Patina Group catering sales manager Summer Stearns added, “The momentum for holiday parties is always bigger and better every year—and that is just not happening in 2008.”

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