Party down: Holiday festivities generally less extravagant

Michele Rothstein’s company just doesn’t party at the holidays anymore like it used to.

And that’s saying something, because Rothstein is in the party business.

Rothstein owns Balloons with a Twist, a local event-planning company that has coordinated holiday galas for Southwest Airlines, Lexus of Las Vegas and the Hard Rock Hotel, among others.

Balloons with a Twist’s own holiday party on Wednesday was dinner inside the Mad Greek Café on Rainbow Boulevard — a downsizing from the company’s prerecession hotel bashes, which included disc jockeys and dancing.

It’s the holiday party as economic indicator: Companies cut spending on seasonal fun in the recession, and their appetite for Christmas shindigs could hint at whether they expect business to pick up in 2012 and beyond. So far, managers remain tentative. Party outlays for most companies haven’t bounced back as the economy has stabilized, and even picked up in many sectors.

“We’re still doing holiday parties, but they’ve evolved a bit,” said Rothstein, who estimated her sales dropped 15 percent in the downturn. “They’re maybe a little bit smaller, or not as extravagant.”

Companies are also driving harder bargains, shopping around more and asking for extras at no additional price, Rothstein said. Some businesses canceled holiday parties altogether, while others plan to hold them every other year, Rothstein said.

Local execs blame lingering fallout from the recession for the merry-making malaise.

“Everyone’s a lot more conservative today. People are still gun-shy about the future, how long it will take for our economy to really be strong again and whether it will ever be what it was,” said Frank Gatski, CEO of Gatski Commercial Real Estate Services in Las Vegas.

That caution is a national trend, too.

A study from Chicago placement firm Challenger, Gray & Christmas found that nearly 70 percent of companies planned a holiday party in 2011. That’s the same share as in 2010, but well below 90 percent in 2007. What’s more, 95 percent of businesses partying this year budgeted the same amount as a year ago.

“The economy is not improving as fast as many had hoped,” said John Challenger, CEO of Challenger, Gray & Christmas. “While some companies are seeing improvements, most are still stuck in first gear and continue to hold off on hiring, equipment upgrades and other big expenditures.”

Reining in the holiday party isn’t just a bottom-line move. Perception is also an issue, said MaryBeth Hartleb, CEO of Henderson human-resources consulting firm Prism Global Management.

Some businesses would rather give party funds to philanthropies or needy employees, Hartleb said. Plus, it’s tough to sell a big fete to employees who haven’t had a raise in a while. A lot of workers say they’d rather see the expense diverted to their paychecks, though the typical company’s party cost spread among many employees wouldn’t amount to a big increase, Hartleb said.

Yet, most companies refuse to completely abandon year-end celebrations, Challenger noted.

That’s the case at Gatski Commercial, whose 65 employees partied at the Palms’ ghostbar Friday night .

The company’s employees-only celebration, complete with a photo booth, cash giveaways, dance contests and scavenger hunts, cost about $20,000. That’s about 25 percent more than the company spent on 2010’s catered dinner, but roughly 40 percent less than prerecession blowouts that included spouses.

“I really believe in company events. We’re a service business, and the most important commodity I have is the team that serves our clients,” Gatski said. “They talk about these parties and holiday events and picnics all year long, and the company has found strength in bringing people close together. When they’re closer on a personal level, they work harder and better together, and our clients benefit from the synergy that’s created when the team comes together.”

At Las Vegas information-technology company NetEffect, parties went low-key three or four years ago, when the company grew from seven employees to 12. President and CEO Jeff Grace moved the annual event from a local restaurant to his home, where he and his wife, Dina, supply a buffet of pastas, appetizers, sushi and drinks. The change’s reasons were both financial — entertaining a dozen workers and their mates got pricey — and cultural.

“Hosting it at our house is much more cost-effective, and it’s a really nice, warm environment being at the house,” Grace said. “We’re a very tight-knit, informal group, and having a party in a friendly environment that encourages people to walk around and chat with one another just fits our culture.”

At other businesses, low-key has always been the standard party practice, and that’s been an important morale boost in the downturn.

Las Vegas law firm Jolley Urga Wirth Woodbury & Standish has kept things simple for more than a decade, spending $8,000 to $10,000 on an appreciation lunch for 45 employees at a fine restaurant. This year’s version was Friday at Postrio inside The Venetian. Keeping party budgets steady has helped the firm handle employee concerns about business, said director of administration Bill Spohrer.

“In a down economy, when things aren’t that great, people hang onto every word an employer might say,” Spohrer said. “If you had an extravagant party last year, but not this year, that sends a bad signal to employees. We’re not going to spend tens of thousands of dollars on a party, because we may not be able to do it next year. That consistency sends a strong message.”

Observers have mixed opinions on whether big blowouts will make a comeback if the economy improves further.

Gatski, whose company also collects toys and food for the needy from Thanksgiving through Christmas, said his business MO going forward is to stay conservative. But he wouldn’t rule out returning to prerecession celebration levels if business picked up dramatically for a sustained period.

But Rothstein said she’s sure revelry will revive once business does.

“I don’t think it’s permanent,” she said. “It’s all related to the economy.”

Contact reporter Jennifer Robison at
jrobison@reviewjournal.com or 702-380-4512.

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