Companies have been tightening their belts this year as the country continues to suffer in one of its worst ever recessions.

And Christmas parties have been high on cuts lists as companies slash their budgets.

The cancellation of festivities is arguably bad for morale but it can also be devastating for local businesses.

Tina Young, licensee at the The Royal Oak, in Kingston Road, Leatherhead, said: "I haven't had a single Christmas booking this year. I usually have a couple but I have just had nothing.

"There has been a massive downturn. I am 35 and I can remember the late 1980s/90s recession and it was nothing like this. Morale is just so low."

Matthew Granger, licensee of The Stephan Langton Inn, in Friday Street, Wotton, has also seen few Christmas bookings this year.

He said: "There haven't been many bookings for Christmas parties this year. People have booked for after Christmas, like on New Year's Day, but there are very few big parties for Christmas.

"I think people are just having less Christmas do's this year.

"We still have bookings for individuals but not the big groups."

Other businesses have had to slash their prices in a bid to beat the crunch.

Paul Montalto, who owns Two to Four and Viva in West Street, Dorking, said: "We decided to reduce the price of our Christmas menu this year at Two to Four.

"For a three-course meal it has been reduced from £35 to £20 and it has worked because we are getting more bookings now.

"People are being much more careful with their money so you have to make your prices value for money or people just go elsewhere."

Jeannette Simpson, from Denbies in Dorking, said the vineyard had also had to adapt to changes in the economic climate, stating that party share nights had been its way forward since the downturn.

She said: "We have gone down the route of party share nights.

"We plan all the entertainment and then various small companies book a table.

"We have had four nights like that this year. Last year we had two.

"We did it to pre-empt companies stopping having big parties, so that we covered ourselves in the event of a decline.

"In times like these you really have to fit in with what customers want."

However some large employers are bucking the trend.

Consumer goods company Unilever, which is based in Leatherhead and produces products such as Domestos and Persil, is going ahead with its Christmas bash.

A spokesman for the company said: "We think it's important for staff morale, team building, and as a mark of appreciation for our employees' hard work throughout 2009."