The catering and hospitality sector is feeling the impact of the cut in spending on entertainment, as companies scale back in the face of the economic downturn.
In the UK, 27% of companies have reduced their spend on staff entertainment including Christmas parties, according to the Institute of Directors.
The Chartered Institute of Personnel and Development found that only 60% of businesses were holding parties this festive season, down from 69% in 2007.
D&D London, the upscale restaurant group spun out of Conran Holdings, said that it had seen events spending drop 15% to 20% at its eateries.
Des Gunewardena, chief executive of D&D, told the Financial Times: “There has been a little bit of an easing up in spends.”
The majority of companies in the financial sector have scrapped extravagant Christmas parties and other groups such as the BBC and Asda are reducing the amount they contribute towards the events.
The comments came as Charles Beer, chief executive of Crown Group, one of the largest independently owned group of event and catering companies in the UK, said that he feared there was a bleak future for many events businesses in 2009.
He said that he estimated between 30% and 40% of the Christmas party market in the UK was unsold, resulting in a large number of event companies set to be forced out of business next year.
Beer said: “The city has to be seen to be cautious; we are seeing major firms who would normally hold large scale events decide that this is not the time to be seen to be frivolous, and are either scaling down their events or deciding not to hold them altogether, despite in some instances deposits or even the full amount of the party having to be faltered.
“To survive businesses not only need to be able to demonstrate to clients that they provide value for money, they also need to be careful who they choose to do business with.
“Credit checks on both the buyer and the supplier should be mandatory because, as we have clearly been shown in the past six months, no-one is safe from the economic downturn and the brutal commercial reality is only the strong will survive.”
