In these days of financial doom and gloom, companies view these extravagant bashes as an unforgivable sin.

In Hong Kong, there have been reports about big firms, such as Citibank, cancelling bookings for Christmas parties at top international hotel chains. A loss of business for hotels and high-end party venues means big business for catering service operators when companies retreat to the office for a cosy celebration.

'The tight budget will also drive some companies, that originally planned to dine out at hotels or restaurants, to shift back to the office and order outside catering from us for a celebration,' said a spokesman for leading caterer Cafe de Coral.

Coco Wong, a wedding planner whose company also organises corporate and festive events, said some clients in the banking sector had already minimised their expenses for Christmas celebrations and were planning to hold internal gatherings instead of throwing a big party outside the office.

Even though companies are justified in reining in their party expenses in tough times, it is not a good idea to completely scrap a party for a combination of reasons from a human resources point of view.

According to Alice Kaushal, corporate trainer and managing director of Refine Consulting, companies should take advantage of an office Christmas party to boost morale by thanking employees for their hard work and acknowledging their support.

She advised that the boss or department head should deliver a short thank you speech.

'It is a good time to inform the staff briefly of the company's current business situation and challenges ahead, ending the speech with a positive note. If you keep silent, people will be wondering.'

Although a Christmas party is considered to be an informal gathering, there are certain manners and etiquette that staff are expected to observe.

People attending an office party should note it was important to provide every staff member with an opportunity to mingle with senior executives and management because it was a good opportunity to make a good impression with your colleagues and superiors, Ms Kaushal said.

Employees should be encouraged to come out of their comfort zone by talking to people in other departments with whom they don't usually interact in their working lives.

According to Ms Kaushal, it is a good opportunity to widen the network and social circle within the company.

'Take the chance to understand what they do and how they can facilitate and contribute to your work in your department. You need to get outside your customary boundaries and also try to talk to your boss.

'A lot of people will exclude their boss in a conversation, but in fact it is a good way to impress your boss,' she said.

While engaging senior executives in a conversation is vital, people should not monopolise their conversation with the management and avoid bringing up issues or filing complaints about the workplace.

No matter how causal the party setting, employees should always dress appropriately for the occasion and guard against wearing clothing that is revealing.

While it is common to serve alcohol at a Christmas party in a western corporate culture, employees should know their limit. Remember Christmas is a special time for the company but also a family time for staff.

Ms Kaushal suggested the best time to hold a Christmas party should be one or two hours before the office closing time, which allowed people to make personal arrangements after the celebration. To ensure a fun party, it is also important to have a lot of food and drinks, with party games being a great way to break the ice and improve communication between staff at all levels.