Holiday office parties take hit

The number of companies planning holiday parties dipped sharply again this year as businesses continue to keep a lid on nonessential spending, according to a new survey.

Results of Challenger, Gray & Christmas Inc.'s annual survey showed only 62 percent of companies plan year-end festivities despite signs the economy may be on the mend. That was down from 77 percent a year ago, and 90 percent in 2007.

Two event planning managers in Las Vegas said they are handling fewer and less expensive employee parties this year, but they said many employers continue to give employees parties as a morale booster.

"They have a much tighter budget than they have had in the past," said Dale Hahne, general manager of USA Hosts in Las Vegas.

Some companies are managing parties in-house rather than hiring firms such as his, Hahne said.

Hahne said his company will hold a party for its 21 full-time local employees and a separate event for 70 contract field workers.

USA Hosts eliminated 20 jobs this year and wants to show its gratitude for the employees who are doing extra work because of the cutback.

"You need to recognize the employees that you have left and let them know that they are a valuable part of the company," Hahne said.

Destination By Design noticed a similar trend.

"I think people are still having the parties, but they are scaling them back," said Jim Nelson, executive vice president.

Holiday parties, Nelson said, "are a great way to build camaraderie and esprit de corps. It doesn't have to be over the top. Everything can't be a grind. People have to have fun."

Nelson's company plans to hold a party for its 60 employees and their spouses.

Destination By Design and USA Hosts spend the bulk of their time helping out-of-town corporations and groups organize events in Las Vegas, a service that also is affected by the recession.

USA Hosts finds out-of-town corporations more focused on meetings that concentrate on key functions, such as marketing or management, rather than solely employee recognition, Hahne said.

MGM Mirage, the operator of Mandalay Bay and other Strip properties with meeting rooms, sees reason for optimism about the number of employers holding parties for workers during the holidays.

"We have had more inquiries in the last 30 days from companies about possibly booking holiday parties than we have had in the past six months combined," spokeswoman Yvette Monet said in an e-mail message.

Many employers were waiting until late in the year before making financial commitments, she said.

"Some companies that have contacted us are excited about holding 'end-of-year' or 'employee recognition' events as opposed to lavish holiday parties, in order to reward employees who have been working extra-hard this year through the difficult times," she said.

Challenger, Gray & Christmas' survey also showed that among those having parties, more will be serving alcohol this year than last year.

"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," John Challenger, the firm's chief executive officer, said in a statement.

McClatchy Newspapers contributed to this report.