A sense of economic gloom dampens the holiday season

Sacramento BeeDecember 20, 2009 

SACRAMENTO — The theme for most of us this holiday season is less is better — but wait 'til next year.

Lavish, corporate parties with elaborate ice sculptures and floral arrangements, celebrity disc jockeys and open bars? Gone.

Blazing tangles of holiday lights strung from rooftops and trees? A little less so.

Packing up for a Christmas on the sandy stretches of Hawaiian beaches? Not so much.

And iPods for all the neighbors? Definitely not.

Holiday season 2009, by most indications, is better than the dog we had last year, but the ground underneath is still shaky for most people.

There's another strong sentiment going around:

"People are tired of this. They are tired of the economy," said Susan Crane, whose business, The Party Concierge in Sacramento, decorates for big events.

Some indicators point to a modest uptick just around the corner, whether it be propelled by genuine economic re-blooming or "frugal fatigue": Big discounts on luxury cruises are enticing people to book for next year.

Many people will welcome in the new year gazing at a new flat-screen TV snatched up at irresistible savings.

Passenger traffic at Sacramento International Airport, though down from last year, is inching up month by month.

A national survey of restaurant operators, who have taken a beating during the downturn, shows that three of 10 expect conditions to improve in the next six months; only 20 percent believe they'll worsen.

Many Californians who delayed making major purchases this year will plunk down money in 2010 for cars, refrigerators and houses, according to a new survey.

"California is a very innovative and resilient state," said Rebecca Macieira-Kaufmann, president of Citibank California, a financial institution that just surveyed Californians' economic outlook for the season. "People are saying we're not out of the woods, but it looks like it will get better in 2010."

A hearty 8 percent of Californians said they would actually be partying and eating out more this holiday season, the survey found.

The same survey also found that the recession has changed the way 52 percent of Californians will spend for the holidays with only 28 percent expecting to spend the way they did before.

We're talking about 70 percent of the gross domestic product when it comes to consumer spending, said Kathy Grannis, a spokeswoman for the National Retail Federation.

That's why analysts watch it like a hawk after field mice, and why holiday season 2009 will go down as the year of $3 toasters and big-screen televisions for less than $500.

In spite of reined-in spending, retailers this season were prepared, cutting excess inventory and other costs, which is creating a more balanced picture, Grannis said.

"We are seeing emerging signs that next year will be a little bit better," Grannis said. Compared to last year: "The panic is gone."

In Sacramento, Steve Zeigler owns Capitol City Events, serving up tri-tip beef and grilled prawns for parties and gatherings.

Several years ago, he would whip up the makings of a South America-themed menu, complete with brightly dressed servers, for big holiday feasts at pricey downtown venues; or round up saké and Japanese beer for an Asian-style dinner.

But that was then.

Holiday season bookings are down about 20 percent, he estimates, but he still has business.

"Across the board, people are still feeling the need to do something. A less-expensive menu is how they cut back," he said.

More pasta, less filets. More paper plates, less china.

Crane, from the Party Concierge, can supply ice sculpted into a corporate logo or recreate a Las Vegas casino for a company holiday shindig.

"I didn't know what to expect coming into December," said Crane, who has taken her share of cancellations.

Instead of going full bore, businesses are scaling back, she said.

"Maybe they'll only do an ice carving with one balloon centerpiece, not the full floral arrangements," she said.

Curiously, corporate gift baskets are still doing well, she said. "You want your customers to know you're still in business and you're holding your own, I guess," Crane said.

And at her retail store, buyers are grabbing up do-it-yourself party items in droves.

"I think those are going to be big New Year's," she said.

Mike Peterson of Sacramento started his holiday lighting business three years ago as a college student. The economy then tanked, but the lights are still on.

He still has customers in places like El Dorado Hills and east Sacramento, who happily shell out $500 for his seasonal services.

But he gets callers hoping he can light up rooftops and yards for a lot less.

"We can only go so low," said Peterson, who is insured and provides maintenance checks during the season.

Peterson is getting through the tough season by offering customers affordable options, like having them buy their own lights and electrical cords, taking them down themselves – or just doing less.

"We tell them to figure out a budget and I can tell you what we can do," he said.

For some, those little extras remain absolutely indispensable.

The Sacramento Philharmonic has a few musicians organized into quartets and trios who can be booked for private events, that refined touch for the holiday.

"We're pretty much the same for events. People want to keep these things going," said Marc Feldman, the executive director.

Ticket sales, including season tickets, also are going well, he said.

"It's kind of like sports events. There is a percentage of the public with expendable income who just say, 'We don't want to part from the arts,' " Feldman said.

Same with travel.

"For the ultra wealthy, they travel. Nothing has changed in their lifestyle," said Ilona Kupec, who manages the leisure department at Giselle's Travel, a Sacramento travel agency.

Families who save all year for a week in Hawaii or Mexico during the holidays are "probably just staying home or going to Tahoe," she said.

Because cruise lines are furiously discounting, travelers are booking a year or two ahead, locking in 60 percent off, two-for-ones and free shore excursions, Kupec said.

Nationwide, airline passengers have declined 2.5 percent during the holiday season over last year, according to the Air Transport Association of America.

November numbers for Sacramento International Airport indicate a 2.3 percent drop from 2009, but monthly passenger numbers continue to climb.

"It's a turn in the right direction," said Karen Doron, a spokeswoman for the airport.

Numbers from Travelocity, a travel Web site, show that even though domestic travel is down, lower rates are nudging up international travel: The share of its bookings to Asia grew by 50 percent over last holiday season.

Amtrak ridership at Thanksgiving unexpectedly rose over last year, and first-class accommodations for Christmas travel are booking fast, according to a spokeswoman.

And it's not just for short hops. Passengers are up 4.7 percent on long-distance lines, including a 3.4 percent boost for the California Zephyr that runs from San Francisco to Chicago.

At Miyamoto Travel, Sacramento's oldest brick-and-mortar travel agency, owner Jerry Miyamoto said fears about swine flu abroad also dented the industry. But he senses a comeback.

"It appears that money is starting to loosen up a bit," he said. "We're getting more calls. It appears that way. Maybe it's just my wishful thinking."

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