Designates a spot where parties will be centered. Parties use an area around the spot.
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Party spots are particularly useful when lots of your colonists are hospitalized. Having colonists in bed near a party still counts as attending the party, therefore even immobilized colonists can stay sane. Unfortunately there is no way to predict them or to reliably get parties started.
There is no cost, build time or skill requirements for placing party spots. Just select them from the menu and place them.