- The Washington Times - Wednesday, December 10, 2003

Employers are spending less money this year on holiday parties as companies remain cautious about the future health of the economy. But despite tight budgets, most companies are clinging to tradition and hosting festivities to show employee appreciation and celebrate the past year.

“They’re trying to send a message: We’re behind you, but we’re not having the caviar,” said Sam Bonfe, director of sales and catering at the Marriott Wardman Park Hotel.

“All of them are keeping an eye on the bottom line and genuinely balancing that with something that will please their employees.”

The median cost of a companywide party this year is $9,000 — down from $10,000 in each of the past four years, according to a survey of 340 employers by the Bureau of National Affairs in Washington.

Americans are growing more optimistic about the economy, but companies remain cautious. Although many indicators in recent months have pointed to an improving economy, many employers have been reluctant to add to payrolls and splurge on extras such as parties.

Lisa Floyd Collyer, director of catering sales at the Renaissance Mayflower Hotel, said she has noticed the drop in holiday-party budgets this year.

For example, one client reduced its budget from $40,000 last year to $25,000 this season for its 300- to 350-person party. Another company went from a cocktail reception last year for about 250 people to a brunch this year.

“The economy is recovering, but not to the extent that [these companies] can have the big parties,” Mrs. Collyer said.

Mr. Bonfe has noticed more department-specific parties rather than larger companywide affairs. Many of those smaller parties are rewards for a well-done performance throughout the year.

Another client requested the Marriott Wardman Park’s “least-opulent” ballroom to host a party for about 1,150 people, he said.

About 95 percent of companies plan to have some type of holiday celebration this year, according to a survey of Battalia Winston International, an executive-search firm. That is unchanged from last year, but a significant increase from the 83 percent of businesses who held parties in 2001, the year of the September 11 terrorist attacks.

Some in the holiday-planning business say busy is good, for them and their clients.

Sara McGregor’s Capitol Catering has had more larger corporate parties booked this year and still is getting requests for last-minute parties to be held before Christmas.

Company President Sara McGregor said business is better than last year. Her firm has 21 corporate holiday parties planned for this week, including about a dozen today.

“There’s a reason to celebrate,” she said. “A lot of companies had a good year.”

Under Armour, the performance-apparel company, is hosting a festive shindig for 600 to 800 employees, clients and guests tonight at Port Discovery, the children’s museum in Baltimore.

The Baltimore company, which has 250 employees, is celebrating its massive growth this year. It is expecting more than $115 million in sales — up from $50 million in 2002.

“This is a chance for everyone to gather on a more social level, because everyone works so hard during the week,” said Amy Larkin, manager of events and promotions for Under Armour. “It’s also to look back at the remarkable year we’ve had.”

America Online, on the heels of the August debut of its new Internet software AOL 9.0 Optimized, is hosting a companywide bash at the Westfields Conference Center in Chantilly on Dec. 18. The company is inviting all of its 4,700 Northern Virginia employees, and allowing each to bring one guest.

“We have a lot to celebrate. This was a breakthrough year for us,” said spokesman Nicholas Graham. “The employees deserve to have a good time.”

The Internet service provider has hit some hard times this year with its parent dropping the AOL from its Time Warner name in October. AOL posted a 5 percent decline in revenue and an 8 percent fall in earnings during the third quarter.

Earlier this week, AOL announced that it is laying off 450 employees, or 2 percent of its work force, as it consolidates its software-development operations in California.

Mrs. Collyer, with the Mayflower Hotel, is looking ahead to 2004. She already is getting inquires about next year’s availability. She expects, with the economy continuing to improve, many of the hotel’s old clients will return.

“It’s going to be huge, because we have companies that have skipped their parties [the past couple of years],” she said. “It’s going to be bigger than ever.”

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