Downturn Puts Damper on Holiday Parties

'I don't care what I spend, it just can't look like I've spent a lot'

For one of his best corporate clients last year, party planner Kelly Jenkins transformed the boardroom and two floors of the downtown D.C. bank into a warren of themed spaces: a gingerbread room, candy shop, a winter wonderland and modern lounge.

This year, he'll set up a couple of buffet stations and a smattering of decorative lights in a much smaller space. The budget has been halved, the guest list cut by a third. Three of his other biggest customers have gone from throwing elaborate after-hours events offsite to moving furniture around and hosting cocktail parties in their offices. Yet another asked that Jenkins make his party look as low-key as possible, regardless of the overall price.

"He told me, 'I don't care what I spend, it just can't look like I've spent a lot,' " said Jenkins, founder of Capital Decor & Events in Beltsville. "A lot of his clients have lost a lot of money in the stock markets."

In this new age of economic austerity, companies are forgoing black-tie dinners in favor of cafeteria-catered punch-and-cookie affairs. To save cash, executives are hosting company parties in their Potomac and McLean homes. Fannie Mae canceled its party. The Federal Reserve never got around to planning one. Freddie Mac is doing conference-room get-togethers in lieu of restaurant and hotel soirees. Even local hotels and catering companies are scaling back their parties as they look forward to inaugural bookings to boost business early next year.

Facing uncertainty about year-end revenue, grim economic forecasts and the possibility of layoffs, some companies are going philanthropic, skipping the holiday party and donating the money to charity. Office Movers has canceled the annual holiday party at the home of chief executive John M. Kane, donating half of the savings to D.C. Central Kitchen and organizing a food drive. Marriott is setting up employee service events at local soup kitchens.

Those who are spending are asking caterers to dress down the servers and forgo the orchid garnishes. Nouveau meatloaf is more likely to show up at the table than Chateaubriand. Doughnuts may stand in for truffles and petit fours.

"Those who still have money to do something want to entertain without making people feel badly or look like they're spending a lot of money when things are kind of difficult," said Peter L'Heureux, chef and owner of Cuisine Mondiale in Upper Marlboro. Business is down 75 percent this month because of several large client cancellations -- the Federal Reserve, a local health care company, and a couple of firms in the construction and real estate business. August was a booming month for him, as more people stayed in Washington instead of going to Martha's Vineyard and entertaining, so he hopes revenue will still hit last year's level.

"A lot of my regular clients are forgoing the parties or going the Costco routes," he said. With 90 percent of his business repeats and referrals, he tries to help them by not charging equipment rental and by trimming delivery fees. "I've probably taken a cut in terms of my profit, but I want to not charge my clients more," he said.

Other signs of corporate ambivalence about seasonal festivities: Party plans are coming together at the last minute, and hosts are trying to negotiate prices down to the penny. Lighting is often the first thing to go, say firms that provide those services, as are extras like daiquiri machines, champagne cascades and extravagant floral arrangements.

"When people are having a party, they need food and alcohol, and lighting doesn't always seem to be something they think they need," said Eric Hertszh, design and sales associate for Frost Lighting in Lorton. "It sometimes seems to be near the bottom of the food chain."

Mitch Rotker, founder of District-based Smoothie Time, a specialty catering company, has seen the cost of European chocolate for his chocolate fountains go up, the price of Italian espresso increase 50 percent, and nearly a dozen cancellations in the past several weeks. Rotker expects a 15 percent decline in business this year and cringes when caterers he's working with ask him to help trim costs when they are squeezed by clients.

"I try to help them out, but we just can't offer the same service for less money," he said. "Everything costs more for us, too."

Nevertheless, some companies have decided that holiday parties will go on. Sometimes, with the cost of forfeiting deposits, it makes more sense to celebrate. Others calculate that recognizing the season, even if in toned-down fashion, is important for corporate morale.

"When staff gets a company e-mail saying the party is canceled, the first thing they think is that things must be pretty bad. It confirms their fears about job security," said Larry Weaver of Larry Weaver Entertainment, who books music and other entertainment for D.C. area parties. "Your top performers may start sending out resumés."

The companies that often play host to parties are cutting back on their own. Marriott and Big Steaks Management, a restaurant management company, had agreed to hold holiday events at each others' venues for a two-year period. But then the economy started to tank.

Three weeks ago, Big Steaks decided to hold its holiday party for 450 employees and guests at one of its Ruth's Chris Steak House restaurants, thereby saving $25,000.

Marriott, meanwhile, invited its corporate employees to sign up for a morning of serving free meals at D.C. Central Kitchen, then attend lunch at one of the executive's homes in Chevy Chase -- catered by the staff of Central Kitchen. This year's party will cost two-thirds less than last year's, Marriott says.

Throughout the region, a refrain is being repeated among event planners: January will be better.

"We are extremely fortunate in Washington to have the inauguration," Jenkins said. "If we did not have that, it would be a lot more dismal for a lot of businesses."

Many companies, he and others said, are hoping January parties will help save them next year.

"I'll be able to at least break even in the first quarter because of inaugural parties," said Peter Grazzini, head of Landover-based party supply rental company Perfect Settings. "It's a huge deal, because I'm usually half a million bucks in the hole at the end of the first quarter."

Copyright AP - Associated Press
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