Holiday Spirit Returning as Corporate Partying Increases

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What dot-com crash?


After a few sobering years following 9/11 and the stock market plunge, corporate holiday parties are emerging from hibernation.


Just consider Napster Inc., the Los Angeles-based music-downloading service, which took over three rooms at the Hollywood Roosevelt Hotel this month: one decked out as a full casino, a second for a dinner buffet and a third for a bar, live bands and DJs who performed for the 500 employees and guests.


“You have ups and downs as a company, and you want to reward the people who work so hard every day,” said Dana Harris, a Napster spokeswoman. “It’s important to let employees know you value them.”


A poll by Office Team, a Menlo Park-based staffing firm, found that 75 percent of Fortune 1000 companies were holding an office party this year, compared with just 36 percent four years ago during the midst of the dot-com bust.


Another survey by Challenger, Gray & Christmas Inc., a Chicago-based staffing firm, found that 23 percent of companies throwing holiday parties are spending between 5 and 20 percent more this year than last.


“It could be improved earnings or bigger cash reserves, or it could simply be that after several years of no or low-cost parties, companies may think it is time to get back into the holiday spirit,” said John A. Challenger, the firm’s chief executive.



More restraint


Among the hot local venues for the holiday gatherings: the Roosevelt, whose recent makeover has made it a top venue among Hollywood celebrities and hipsters.


“Over the past year, we have seen many more corporate parties in terms of volume,” said Ernie Carrillo, the hotel’s catering director. “After 9/11, we saw company spending patterns change drastically across the board. It’s much better now, but still not as extravagant as before Sept. 11, say, in the late 1990s.”


Also popular is the Four Seasons Hotel Los Angeles, where public relations director Sarah Cairns said ballrooms and event facilities are booked nearly every day.


Even for companies holding lavish parties, however, there often is more restraint that in past years.


The party for DirecTV Group Inc.’s 1,500 employees will take place in a huge tent next to its headquarters rather than the Biltmore or the Los Angeles Convention Center and it is on a weekday, rather than a Saturday night as in the past.


“It’s more cost-effective for us to have it on-site,” said Bob Marsocci, corporate communications director for El Segundo-based DirecTV. The company resumed its holiday parties last year after a three-year hiatus.


This year, law firm Latham & Watkins LLP’s Los Angeles office also has moved its employee party from its usual venue the California Club to its home base in the company’s downtown building.


The firm will take over an unoccupied floor in the US Bank tower, where waiters will circulate with trays of appetizers and entertainment will be provided by strolling magicians. The event will also include wine tasting and an ice martini fountain. “We’re a premiere organization, we want a premiere party,” said Eric Goldreich, the company’s office administrator.


He estimated that the firm will spend about $50 for each of its 550 employees, less than in previous years when events were held at the Petersen Automotive Museum or on the Queen Mary.



Employee benefit


The resurgence of the company party is good news for local hotels and restaurants, which suffered in recent years when businesses pulled back from many festivities.


At the Roosevelt, Carrillo said he has seen average party spending of $20,000 to $30,000, while five or more years ago, before the Sept. 11, 2001 terrorist attacks, spending hovered closer to $60,000 for larger bashes.


“More people are now coming to the table who didn’t do (parties) for the last three years, but still, they are not spending a lot of money like they used to,” Carrillo said.


For many businesses, the holiday party is almost considered an employee benefit. “It’s hugely important for morale, and it’s become a big gala event,” said Bill Goodmen, senior vice president of human resources at Calabasas-based video game company THQ Inc. “It’s really become a big gala, and we use the event to give out all of our annual corporate awards.”


Goodmen said that the party, which is held at the Canyon Club in Calabasas, is intended as a more formal gala for employees and includes dinner, drinks and dancing for employees and guests.


Mattel Inc. has long taken a different approach. The El Segundo-based toy company sells tickets to its annual employee holiday party, held offsite, for $45. Though the company has about 2,000 employees, tickets are limited to the first 450 workers who pony up.


This year, the party is at Loews Santa Monica Beach Hotel and will feature a catered sit-down dinner, live entertainment and two or three drink tickets for those who attend. The Mattel party also offers an unusual perk: a gift bag for attendees containing limited edition dolls and vehicles made exclusively for employees.


“It’s a nice evening, but we do have a responsibility to not to go over the top,” said company spokeswoman Jules Andras. “It’s definitely on the conservative side compared to most Hollywood parties.”

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