CHICAGO — Nancy Wright, president of Chicago’s Blue Plate catering, remembers a time not too long ago when corporate clients spared no expense for the holidays.
“You’d go from ballroom to ballroom, and each would be grander than the next,” she said. “It was an annual occasion you looked forward to on so many levels.”
Five years ago, six-figure parties weren’t unheard of, and part of an accepted year-end ritual to boost employee morale. But the recession and waves of layoffs put a quick end to high times, with pricey bashes falling out of favor in 2008 and 2009.
Just like millions of American households that have felt the economic pinch, companies have adjusted their holiday plans, opting for simpler, smaller celebrations. At the onset of another holiday season, spirits remain subdued, yet caterers and restaurants do cite improvements in party business from last year, which also was an improvement over 2009.
“(Clients have) realized they need to start entertaining again, but doing it in a way that’s appropriate,” Wright said, adding that businesses that once spent $50,000 on a party have dropped to about $15,000. Companies now consider entertaining in the office, perhaps in the lobby, with heavy appetizers rather than a full meal, maybe inviting clients, but not spouses.
‘Out of fashion’
David Brandt, director of catering at Chicago’s Palmer House hotel, has a starker view of corporate holiday parties: “They’ve gone out of fashion with the recession, and I don’t think — frankly — they’re going to come back.”
Events by number are down about 25 percent from five years ago, he said, and spending per guest has also declined, by about 23 percent.
Brandt pointed to decreased alcohol offerings as a leading reason for lower spending, as clients remain worried about incurring liability from accidents.
Allan Thompson, director of administration at Mayer Brown, a Chicago-based law firm, said his firm actually found savings by holding an off-site party. The firm had traditionally held its party in-house, renting plates, glasses and linens, and bringing in catered food.
Holding the party outside saved money and has been more fun for employees, Thompson said. This year’s event, at Hotel Allegro Chicago, will consist of beer, wine and appetizers, starting at 4 p.m.
“There won’t be champagne flowing or anything like that,” Thompson said, adding that the firm has been looking at “all of our expenses.”
Walgreen spokesman Michael Polzin said the Deerfield, Ill.-based pharmacy chain traditionally held an in-office lunch on Christmas Eve, when employees generally work a half-day. He said Walgreen stopped holding the lunch several years ago when the company became too big to host everyone at headquarters.
The decision wasn’t motivated by savings, Polzin said, and there’s been no effort to revive the event. “I think everyone’s happy to spend the extra time with their families on Christmas Eve,” he said.
At Morton’s Restaurant Group, seasonal party business is up double digits from 2010, said Roger Drake, senior vice president, marketing and communications. The highbrow, dinner-centric steakhouse chain has also made a nod to the shifting mores for the holidays.
“Some companies, because of budgetary constraints, are going to have to do a lunch,” Drake said, which results in a lower average check.
Smaller functions and menus also have been beneficial for Corner Bakery Cafe, with the chain’s holiday catering business increasing for each of the past two years.
“Maybe (businesses) spend smarter than they did in the go-go days of ’05, ’06, ’07,” said Jim Vinz, president and chief operating officer. And while they won’t sacrifice quality, he said, businesses are “looking to feed greater number of people with more snack-size portions.”
In addition to boosting employee morale, companies say such events are an important tool for networking.
The newly renovated Chicago offices of Wagstaff Worldwide, a Los Angeles-based PR firm focused on the hospitality industry, will host between 100 and 150 guests later this month, primarily clients and media.
“It’s going to be sort of a spirited, elegant cocktail reception,” said Jim Lee, vice president at Wagstaff, adding that the firm considered live entertainment but will likely opt for an iPod playlist. Lee said the office’s 14 employees also celebrate with an annual holiday dinner at a restaurant.
The big events
Of course, for some employers, the desire for a bigger splash remains.
At the Chicago offices of Olson, a Minneapolis-based advertising and PR firm, the company holds an annual holiday bash including spouses or significant others, a full bar and an in-office omelet breakfast the following morning for employees to rehash the festivities.
“It’s a reason to celebrate a good year, and every year a reason to thank not only our employees but spouses or significant others,” said Pete Marino, president of Olson. “They are an important part of enabling our people to do the work, and travel a lot.”
If it came down to excluding spouses to save money, Marino said, “I’m not sure we’d have a party.”
Then there’s Wauconda, Ill.-based MBX Systems, which has hosted an overnight party, including hotel stay, for the past seven years. The company has 100 employees and spends nearly $50,000 on the holiday party, considering it important for employee morale. This year’s bash will be at the Hotel Allegro Chicago.
Karen Niziolek, senior coordinator of sales and events at MBX, said the company has hired a DJ to perform during dinner, and Blues Brothers impersonators will mingle during the cocktail hour and perform after dinner.
“Employees do spend a lot of time at work, and management really wants to make sure they feel valued,” she said. “We have a budget and work within the budget but don’t want to skimp out.”