Lavish Christmas parties over for City workers hit by credit crunch

Thousands of City workers at major blue-chip companies and banks have been left disappointed as bosses attempt to make savings by ditching end-of-year events, some costing up to £150,000.

Last year a record £120million was spent on London's office Christmas parties in two nights, but the global economy's downturn has left institutions struggling to justify the expense.

Party organisers blame the credit-crunch fallout for scores of cancelled bookings and a lack of uptake in the expensive "bespoke" events, comparing the slump with that after the 11 September US terrorist attacks. And they fear next year could be even worse.

Mike Kershaw, chairman of the £25million Concerto Group its top events achieve a £250,000 turnover said the group's three party divisions, which operate in 22 venues, had all recorded drops in bookings.

He said: "We are about five to 10 per cent down across all of our divisions. We had 75,000 people through our sites last December, and we are behind on this time last year.

"We have had some American banks cancelling. One was for a party of 1,200. It is very disappointing, but we have been through this sort of downturn in the past, with 9/11."

End-of-year parties are a highlight for many City workers, whose firms traditionally lavish hundreds of thousands of pounds on staff used to enormous bonuses and lavish lifestyles. Down payments for most expensive events were made in the summer now companies cannot justify the huge cost.

One large party recently cancelled was a £150,000 Las Vegas-style black-tie event for a US bank at Old Billingsgate in Lower Thames Street. Called Dazzle, it was modelled on the Belagio hotel, complete with casinos, live music, dancers, fine dining and unlimited champagne and drinks.

Mr Kershaw added: "Cancelling Christmas parties is a very negative thing to do and the problem will be worse next year."

Lifestyle group Quintessentially Events, which has more than 50 offices around the world, said it had experienced a drop in bookings for Christmas parties, which can cost more than £1million.

Caroline Hurley, director of the firm which has organised parties for clients such as Fortis Bank, Kaupthing Bank and BP, and private events for Gucci, Hugo Boss and Sir David Tang, said parties were being toned down, reflecting the economic gloom.

She added: "We have seen a decline in Christmas events being hosted this year, but not to the extent that one might expect. Our clients are still finding that events remain an effective marketing tool what is important is the tone and execution. It is no longer appropriate to walk into a party and see a giant champagne fountain.

"To succeed in the current economic climate you need to be able to offer your clients additional benefits and added value without them having to pay for it."