Last Christmas was a testing time for party organisers. Impossibly tight budgets and endless staff cutbacks threatened to make for a bleak festive landscape, with most firms scaling back or even cancelling their end-of-year celebrations altogether. The days of dancing till dawn, having sunk a three-course dinner and magnums of vintage champagne at the company's expense, were set to become all but a distant memory.
In retaliation, the event industry launched a series of Christmas-based initiatives to combat negative media surrounding the spending of company money on festive events. The Concerto Group-led 'Say Thank You at Christmas' campaign gained coverage in the national press and secured its chairman, Mike Kershaw, an invite to 10 Downing Street to discuss the effects of the recession with former business secretary Peter Mandelson.
Despite such visible backing, come the New Year it was clear that the industry had still had a relatively poor Christmas. According to research by YouGov, fewer than four in ten office workers were lucky enough to enjoy a Yuletide party, with many of them being asked to put their hand in their own pocket to contribute towards the budget.
But that was last year, and although you may not be ready to dust off your baubles just yet, you may be wondering what 2010 has in store. Are we in for another festive flop, or will the magic of Christmas prevail again?
Surprisingly, event organisers are feeling somewhat more positive about the state of the market this year. "It's quite exciting," enthuses The Ultimate Experience deputy managing director Stephen Lawrence. "For the first time in a couple of years we are seeing people coming back into the market."
At the time of Event going to press, The Ultimate Experience - a division of Kershaw's Concerto Group - had already seen a ten per cent increase in sales for its venues, with half of its 220 parties booked up, while It's the Agency - the new name for City-based event management company Chester Boyd - had confirmed 40 per cent of its festive dates.
"The biggest thing that has changed for us is we have become busier, with new enquiries much earlier in the year," says It's The Agency's Christmas expert Sarah Hocking. "Our first booking was on 4 January. People did miss out last year when they left it far too late to book the best venues."
Absolute Radio marketing director Clare Baker began her search for festive party venues in August, much earlier than in 2009, and has found they are already getting booked up. "Some of them are already quite busy," she says. "We secured a couple of our ideal dates, but not all of them.
"We were incredibly lucky last year; we left it a lot later, but at the last minute stumbled across the House of St Barnabas, which Quintessentially Events had just taken over management of. I don't think we would be as lucky if we left it so late this year."
There's no doubt this is encouraging news, given that clients were too busy tackling the crunch to even consider Christmas parties this time last year, yet Liz Taylor, director of Manchester-based event agency TLC, believes we are not out of the woods just yet.
"Most businesses were hit by the recession in 2009, but this has actually affected 2010 Christmas events, and as a result festive parties are less elaborate and most cost-conscious this year," she explains.
Venues and agencies have been quick to adapt to current demands, with many freezing, and, in some cases, even reducing their prices for 2010, as well as introducing a range of budget-friendly, flexible options.
Art Deco venue the Royal Institute of British Architects (Riba) in London's West End has decided to keep its room hire prices the same as 2009 during the festive period, and has tailored its catering packages to offer more flexibility. "Clients are looking to celebrate in the same way this year, without it costing the earth," says Riba deputy venue manager Lisa Lightfoot.
Similarly, It's The Agency will be retaining its 2008 prices and offering organisers who spend more than £6,000 a luxury Fortnum & Mason hamper as an added sweetener. "We feel it is important to thank our clients, both old and new, so we have kept our package prices the same as 2008 to help keep their budgets down, while keeping the quality high," says Hocking.
"There are all sorts of ways that the cost can be reduced without compromising on quality," she suggests. "For instance, rather than a seated dinner, opt for bowl food or funky canapes; that way guests can mingle more and create an even better atmosphere.
"Also, be flexible on the date; prime dates are guaranteed to be sold, but earlier in the week and month are not as popular so deals can be done. And consider the drinks packages; it's not necessary to offer an unlimited option, and bubbles are great, but go for sparkling wine rather than champagne."
Clients have also wised up to what is on offer, and have been making use of the taxable benefits available for Christmas parties so widely discussed last year.
A taxable benefit means you are able to claim the cost of the company party against your tax bill, as long as it is within a certain limit. Every company in the UK has a right to the maximum tax allowance of £150 per person, including VAT. The only criteria is that it has to be an annual event and open to all employees.
The good news is that the taxable benefit extends to partners or husbands/wives attending the party as well, and it can be used on anything you like, so long as it is party related, such as accommodation, food, entertainment and travel.
There are downfalls, however. Rather than being based on preliminary numbers, the tax claim is based on actual numbers turning up (total cost divided by the number of people at the event). This means that if people don't attend, you could lose out on your taxable benefit. In addition, if you go over the £150 limit per person - even by one pound - you are liable for tax, so you could end up spending far more on your Christmas party.
Alongside an added interest in the bottom line, the consensus among the industry is that the market has become a more sensible one, with savvy clients seeking more targeted ways of showing their appreciation to staff.
"This year businesses have got to the point where, for once, they want to forget about saving the pennies and focus more on thanking the staff for their commitment throughout the challenging times," says Hocking.
At The Ultimate Experience, clients have been exploring ways in which they can engage staff rather than just invite them along to an evening of drunken revelry. "Some of them are even opting to combine this with conferences and awards ceremonies, with a party in the evening," says Lawrence.
It is crucial to define exactly what the guests will want in order to achieve the maximum return on your Christmas party, says Taylor. "A well-planned party is a great marketing investment opportunity to showcase your brand," she explains. "Done badly, it is just seen as a way of frivolously wasting money."
The effects of the recession on the Christmas party market may still be being felt, but all signs point to the fact that things are looking up for Christmas 2010.
"The key is to buy wisely," advises Lawrence. "It sounds obvious, but don't spend money on things that aren't going to be of any use. Most clients don't realise they can shuffle a package around to suit their needs. We have to go to the market with something, but there is no point paying for staff until 1am if everyone is going to go home at 8pm."
KEEPING THE BUDGET DOWN
- Negotiate. Suppliers should still be willing to compromise on prices
- Opt for bowl food or canapes rather than a three-course dinner
- Be flexible on the date. Deals can be done on the more unpopular mid-week slots
- Explore cheaper drinks options and swap champagne for prosecco
- Email invitations to save on the cost of printing
- Order a coach to ferry guests about, rather than incurring the expense of taxis.