Davies Tanner surveyed 623 central London businesses between January and March this year. It found the number of parties with up to 100 guests will grow by 61% this year. By contrast, the number of Christmas events with more than 250 guests will drop by 45%.
"The signs are that companies are saving money by having smaller, less extravagant Christmas parties," said Davies Tanner managing director Robert Wright.
He believes organisers looking to cut costs are opting for the smaller more dedicated event venues that are offering better rates.
However, the survey did find that organisers are booking earlier. In 2002, 70% of organisers booked their party in the second half of the year. This year that figure is down to 65%.
Alexandra Palace in north London has launched a Wild West themed Christmas offer. The £45-a-head package includes a live band, dancing and games including rifle-range shooting.
London venue The Brewery unveiled its Christmas party packages, which start from 50 guests, in June. Its Grade II-listed Porter Tun room can host up to 600 guests for a sit-down dinner, with a "House of Blues" theme incorporating 1960s New Orleans styling.