Nearly two-thirds of respondents to an online Special Events poll say that lousy economic news is cutting into their corporate holiday party business. More than half--56 percent--say their corporate holiday party business will be off by more than 10 percent this year compared with 2007.
BUSINESS WALKS AWAY
The event team at San Francisco-based venue Mezzanine has seen a sharp drop in business. "In the last three weeks we have had three large corporate holiday events that were in contract with deposits down for events in December cancel their events and walk away due to economic strain and upper management freezing expenditures for the remainder of ’08," says Megan Upjohn, corporate and private events director. "We have heard that many companies are doing much less elaborate, potluck-style holiday gatherings at their offices to cut expenses and to also appear to shareholders and employees as if they are being fiscally responsible." To shore up business, Mezzanine management is "scrambling" to develop and market smaller, "fragmented" event packages for holiday gatherings, "hitting the lunch angle and the reception angle hard as cost are lower and more feasible for clients that are tightening purse strings," Upjohn notes.
New Orleans-based Carolyn Arthurs, head of All About Events, has seen such a falloff in business that she has begun managing entertainment and offering interior design services to stay afloat. "The only market that is still thriving is television," she notes.
An event pro in the Southeast, who prefers to remain anonymous, says that while some corporations must scale back due to economic travails, many are simply "weary" of worrying what the future holds. Other companies, the pro says, tie their events to trade shows and conferences, and these companies fear that attendance could be halved in 2009.
NO LOOKING LAVISH
Similar to the fall-off in event business in 2001 after the 9/11 attacks, some companies are scaling back holiday events to avoid appearing extravagant in sober times. "We have a client who is scaling back on their function and tying it into more of a 'year-end' function as opposed to a holiday party," notes Greg Jenkins, partner in Long Beach, Calif.-based Bravo Events. "In addition to cutting costs, the phrase 'holiday party' connotes 'lavish spending,' and the client is cautious not to give that impression." Jenkins says the notion of encouraging clients to postpone the holiday party till next year is a "lost cause, with many clients taking a wait-and-see approach." "While it's hard to make up for lost revenue, we continue to review ways to cut our own revenue and overhead expenses," he says. "That's one way of addressing the current economic and financial crisis."
Client budget cuts can come with an ironic edge. Even though some clients have cut their holiday party budgets in half, "They still want the party with 100 percent of the budget," says Randy Fuhrman, head of Los Angeles-based Randy Fuhrman Events.
While he has seen several fundraisers pushed from October and November till next year, Erick Weiss, head of Los Angeles-based Honeysweet Productions, says, "Holiday parties need to happen on the holidays." Even so, companies are cutting back on planners, extensive catering, games and rides, and big entertainment, he notes.
In the face of bad news, the Special Events survey shows that 11 percent of respondents say their corporate holiday business is holding steady compared with last year, while 21 percent see a boost in holiday business this year over 2007.
MARKET, MARKET, MARKET
Vancouver, British Columbia-based MVKA Productions sees "more interest" in corporate holiday events this year than last, according to director of sales and marketing Michael Nathanson, which he credits in part to the company's recent marketing campaign. He also points to MVKA's strong local presence. "Our local supplier networks provide great value" to clients, he says, a vital factor when clients are scrutinizing costs with "the finest of combs." Besides offering an appropriate sense of comfort for holiday events, sourcing locally also gives an environmental edge, a nice selling point in today's eco-conscious environment. "The wisest thing people can do in this situation is focus locally," he notes.
Management at Wilmington, Del.-based Planning Factory International has seen no cutback in client holiday spending. "I think that clients are trying to hold steady over this financial crisis," says CEO Cher Przelomski, CSEP, "understanding that even with the many unknowns right now, there is also opportunity." Besides the financial turmoil, the contentious U.S. presidential campaign is further fueling the climate of uncertainty, she notes. "The looming election contributes to the overall anxiety as well--but a type of uncertainty happens every four years, and every four years we have similar trepidations."
Indeed, several event pros note that, along with a sense that the financial turmoil is calming, the best thing that can happen for the event industry is for the Nov. 4 U.S. presidential election to pass.
To adapt to the shifting market, Przelomski recommends "targeted marketing to those businesses that will be doing well--health care and financial services, believe it or not. Corporations who have let a lot of people go will need someone to fill the gap for meeting and event planning eventually. And social--there will always be social, especially high-end."
Her business is holding steady, says Joann Roth-Oseary, head of Tarzana, Calif.-based caterer Someone's in the Kitchen, largely due to her hardworking sales team. "We are being very proactive and aggressive in reaching out to old and new clients on a daily basis, and all sales staff are accountable for handing in results-oriented reports weekly," she says. "The team effort is driving the machine."
PARTNERING A PLUS
With the tidal wave of layoffs hitting Wall Street, New York-based DMC Empire Force Events is in the eye of the economic storm. Perhaps as a result, "We see that our vendors are hungry," notes president/partner Jaclyn Bernstein. She notes that for a January incentive event she is working on, one hotel offered her a complimentary first-night reception to win the room nights, flexibility she praises. To make 2009 a better year, "We as producers need our vendors to help us out," Bernstein says. "We don't want to beat up our vendors, but hope they will reach out to us and be proactive to get the business."
Steve Kemble, principal of Dallas-based Steve Kemble Event Design, recommends that event pros work as expert consultants to aid clients in making effective event expenditures. "I feel strongly it is our job as event professionals to educate our clients on ways they could possibly reduce their holiday event budget," he says. "Whether the economy is affecting your clients' business or not, you can be assured they would appreciate professional counsel at this time." Among his recommendations: Helping clients consider how long their events should run and whether guest lists can be trimmed. He adds, "It is better to offer solutions now than to have the whole party cancel a month out."
Syd Sexton, head of Denver-based Syd Sexton Event Production, urges event pros to keep the quality of their product high. "This is not the time for mediocrity," she says. Her clients have "slightly" tighter budgets for their holiday parties this year but are still hosting the events, she says. She stresses the need to evolve and adapt. "At the time of 9/11, my company catered to a small niche offering exclusive high-end events. Since then we have grown our company to take care of most every style from barbecues to galas and everything in-between," she notes. "We have learned how to satisfy the customer on a limited budget with a great product. I believe that this is what it will take to survive and succeed in the upcoming year."
THE PENDULUM SWINGS
While adapting to economic upheaval is good, losing your identity is not, says David Merrell, head of Los Angeles-based AOO Events. "I really don’t think it’s possible to reinvent oneself in this short period of time," he says. "It’s important to hunker down, market extra diligently, and wait until the first of the year when the new administration starts to rebuild confidence." He adds, "It’s a scary time for everyone, but I think it’s important to remember that everything is cyclical, and if you can make it through this cycle, you will be in great shape once business starts to loosen up again."
Several event pros echo Great Depression-era president Franklin Delano Roosevelt's famed maxim that the greatest enemy is fear itself. "Hang in there, and let your motivation to secure work be the fact that you will be able to hire others and spread your good fortune around," says Cheryl Cecchetto, head of Los Angeles-based Sequoia Productions. "Stay tough, stay strong, fight the good fight. Keep your heart open. Keep the 'celebrations of life' alive."
Ronnie Davis, head of Ronnie Davis Productions, the special event division of New York-based Great Performances, takes the long view. "This is the fourth time we've been through this in the last 18 years," he says. "People still need to eat, companies still need to keep up morale. We have to sell smarter and be more creative."
Indeed, many event pros note the need to be creative in the middle of crisis. "I believe always in the middle of the chaos lies every opportunity," Przelomski says. "It's up to us to be creative enough to find it."
Photo by iStockphoto.com