Spending on corporate holiday parties rose an average of 16% last year, with one out of three companies budgeting more for their employee extravaganzas than in previous years, according to a 2006 survey of human resources executives conducted by executive outplacement firm Challenger, Gray & Christmas, Inc. Most of those extra dollars were earmarked for alcohol and off-site party venues, the survey said.
Sixty percent of the respondents reported that their companies would provide alcohol at their seasonal celebration (up from 54% in 2005) and sixty-six percent said they planned to book an out-of-office venue for the occasion (versus 55% in 2005). Only six percent of the surveyed companies reported a reduction in their holiday party budgets.
One thing that remained relatively steady between the two years was the number of companies that were planning to host staff parties (79% in 2006, 80% in 2005).
“Companies are definitely in a party mood,” said John A. Challenger, CEO of Challenger, Gray, & Christmas. “Despite high energy costs and a slowdown in economic growth in the second and third quarters of 2006, many firms still have managed to achieve record profit.”
And, even though the economic picture for 2007 might not be as bright, Challenger predicted that “unless there is a dramatic downturn caused by recession of another September 11-type national crisis, it is likely that holiday parties will continue unabated.”
“Holiday parties are not just about celebrating good fortune,” he explained. “They are also a way for companies to show employees how much their hard work is appreciated. Parties could grow even more elaborate as companies recognize their effectiveness in recruiting and retention.”
That certainly seems to be the case at Balboa Bay Club & Resort in Newport Beach, California.
“We‘re more than on-track with corporate Christmas parties compared to last year; in fact, we‘re ahead of the pace,” said Dieter Hissin, Balboa Bay Club‘s executive assistant manager and director of food and beverage.”
To ensure profitability, the club sets minimums for booking particular rooms during the holiday season. Even more encouraging is the fact that some corporations are already booking prime party space for 2009, Hissin noted.
Growth has also been consistent at Cattail Creek Country Club in Glenwood, Maryland, according to executive chef Tom Caswell.
“We have a dozen companies that always book their holiday parties with us and we have been picking up an average of at least one or two more every year,” he noted.