Holiday parties: down and often out

For many companies this year, the office holiday party might be a ghost of Christmas past.

A tough economy in general and brutal years for some industries in particular have prompted cancellations and/or downsizing of office celebrations. Target has canceled its parties and encouraged its officers to organize volunteer efforts for local charities or have their teams write letters of gratitude to U.S. troops, spokeswoman Laura Opsahl said. Carlson Companies and Xcel Energy are implementing similar programs.

Wayzata event specialist Gerilynn Giel said companies that once spent $35,000 on holiday parties are cutting back by $10,000 or more. St. Paul's Il Vesco Vino restaurant has seen holiday-party revenue drop from $42,000 last year to about $25,000 this year, manager Henry Buffalo said. Posh Minneapolis restaurant La Belle Vie has restructured almost all food, beverage and room rental rates, said co-owner Bill Summerville.

Even country clubs are feeling the effect. The Minikahda Club in Minneapolis has lost three parties, "and the rest are being very budget-conscious," said Karl Rigelman, the club's food and beverage director. "It's not looking good, my friend."

Nationally, one in five companies has canned or curtailed its year-end bash, according to Chicago-based workplace consulting firm Challenger, Gray & Christmas Inc.

Most of them are probably taking an approach like that of Eden Prairie-based SuperValu Inc., the grocery giant with 190,000 employees and annual revenue of $44 billion.

"I'm hearing that a lot of departments and divisions are doing things like bringing in a potluck or maybe someone is hosting something at their home" rather than having more elaborate outings, SuperValu spokeswoman Haley Meyer said. "As a company we feel it's important to balance the current economic climate with the fact that we do need to have that camaraderie with colleagues and celebrate the holidays.

"It's just a matter of finding the right tone."

At La Belle Vie, Summerville is seeing "many companies having smaller, multiple parties of six or eight instead of the party for 20 or 30. Others are gathering casually and paying their own way just to keep in the holiday spirit."

Even the restaurants that are managing to fill their party spaces with company gatherings have seen some scaling back.

"Companies are tightening the belt a little, but they're still coming," said Michael Lee, general manager at the Lexington restaurant in St. Paul. "We're booked for the holidays, but spending is down. People might be going with top round instead of filet mignon, or a cash bar instead of a hosted bar."

At nearby Il Vesco Vino, the gatherings are smaller in scope and consumption, said general manager Henry Buffalo. "I haven't gotten [groups numbering in the] 60s, 70s, 80s like last year. I'm getting more 30s and 40s," Buffalo said. "And people aren't drinking as much. We have minimums [fees for a party to cover food and beverage costs], and some people aren't even hitting that."

Buffalo, whose restaurant has three party spaces, said bookings have picked up lately, "but I don't think I'm going to see the sales I did last year."

For appearance's sake

It's not just cold, hard numbers fueling the scrubbing or scaling back of these gatherings. There's also the matter of perception.

"It's tough to justify a big party to shareholders or employees who have seen layoffs," said event specialist Giel. "And when corporations are looking at cutting back, they see these parties as a line item that is a nicety rather than a necessity."

The cutbacks go only so far, she added. "Where I do see companies still entertaining is on the client side. It's still very important for some companies to do this for their clients."

There's good with the bad

And things aren't bad all over. Northeast Minneapolis institution Jax Cafe lost two holiday parties, both from auto dealers, owner Bill Kozlak said, but nabbed a few additions and got "a major upgrade" from one client.

Linen Effects, a large Minneapolis event rental and décor company, has seen a similar "flip effect," according to owner Don Jenson.

"We had a large construction company that always had a party for 1,000 people that canceled the entire event," he said. "But we picked up two other construction companies. "A guy who does computer exports and another guy who does fire safety had their best years ever, and they have come on board.

"I have clients whose ballrooms are empty, and I have ballrooms that can't take anymore. How do you explain all that? I think the trend isn't really scaling back. It's more like all or nothing."

Falling into the latter category are many local and national companies, including American Express. The credit-card giant, which recently announced plans to cut 10 percent of its employees, canceled its annual holiday party in New York -- and next year's, as well.

But it's not all bad news for those who find themselves with one less holiday party to attend: At least you don't have to worry about how to avoid that chatterbox from the cubicle across the room.

This story includes material from the Associated Press. Bill Ward • 612-673-7643