Technology companies -- many of which cut back on holiday soirees during the slowdown of 2001 and 2002 -- are once again spending on seasonal festivities.
From posh hotel galas to catered luncheons to company field trips, Silicon Valley firms are ringing in the season with a renewed spirit of optimism, fueled by improving earnings and forecasts of an upswing in technology spending.
Although this year's bashes don't compare to the corporate shindigs arranged during the boom years of 1999 and 2000, when ultra-lavish holiday affairs were the norm, caterers and event planners say things are on the mend from a year ago.
"If parties are an indicator, then this year is definitely better than last year," said Michele McEvoy, offsite catering manager for Café Primavera, the main caterer for The Tech Museum of Innovation in San Jose, California, a popular party venue for technology firms.
McEvoy said party spending largely hit rock bottom last holiday season. At the time, a sluggish climate for corporate technology spending, a lackluster market for tech stocks and widespread industry layoff announcements made for a less-than-celebratory mood.
This year, tech firms continue to be budget-conscious when it comes to party planning, preferring lower-cost menus, McEvoy said. Still, the volume of companies planning sizable year-end soirees is up, and firms are willing to spend what's necessary to have a festive, if not over-the-top, year-end bash.
The tech industry's readiness to spend reflects a broader willingness in corporate America to loosen the purse strings this season. A survey conducted by the outplacement firm Challenger, Gray and Christmas last month found that companies will spend more this year than they did in each of the previous two years, when terrorist attacks and cost-containment policies kept holiday partying to a minimum.
But the survey noted that fewer companies were planning big extravaganzas than during pre-recession days, with many choosing less-elaborate venues instead.
Uncertainty about the viability of a turnaround this year also led many companies to delay securing party venues.
At the swanky Crowne Plaza in Palo Alto, California, Josephine Chung, the hotel's catering director, said she received a much larger than usual volume of last-minute reservation requests for holiday luncheons and dinners. While it's common for companies to place reservations nearly a year in advance, this year many waited until late November.
Other firms took a nontraditional approach to holiday partying. The Internet search firm Ask Jeeves, for example, opted this year to rent out a movie theater for its employees, treating them to an afternoon showing of The Return of the King, the final installment in the Lord of the Rings trilogy. The end-of-year splurge topped a winning year for Jeeves (ASKJ), of Emeryville, California, which has seen its stock price rise more than 700 percent over the past 12 months.
Other large firms decided the logistics of planning a full-company party were too cumbersome. Such was the case at Intel, based in Santa Clara, California, which left holiday party planning to its various department managers this year.
While Intel (INTC) stock has performed admirably this year, nearly doubling from its low point in February, the company is still reticent to fund extravagant galas. A spokeswoman noted that "in general we are still keeping costs for such things down, given the continued economic uncertainty."
