Holiday bookings are back at upscale restaurants - at higher prices

Ruth's Hospitality

15/12/2022 11:00

By Hilary Russ
       NEW YORK, Dec 15 (Reuters) - Holiday parties are back at
posh eateries - even with soaring menu prices.
    At the Michelin-starred restaurant Boka in Chicago, bookings
are back to pre-pandemic levels. But the whole-roasted, dry-aged
duck for two runs $110 – 22% more than it was two years ago. 
    Instead of big parties for 75 to 150 people, guests are
planning more moderate gatherings for 20 to 30 people, said Boka
Restaurant Group co-founder Kevin Boehm.
    Private event bookings at Charlie Palmer Steak NYC are also
increasing, but more new clients are reserving rooms that can
accommodate 30 to 75 people instead of 200, said the chain's
sales director, Thomas Young.  
    After government COVID-19 curbs shuttered dining rooms in
2020 and the Omicron variant of the coronavirus stymied
gatherings in 2021, ritzy restaurants are finally hosting
holiday parties again this year despite higher menu prices and a
looming economic recession.
    "This year there's been a really exciting buildup of people
getting back together again, which coincided with people going
back to the office," Boehm said.
    Robust restaurant events indicate optimism about spending
and the economy - a positive sign even as Meta Platforms Inc
 META.O , Amazon.com Inc  AMZN.O , DoorDash Inc  DASH.N , banks
including Morgan Stanley  MS.N  and other employers have
announced major layoffs in the last few weeks. 
    In the UK, labor strikes by railway workers and snowy
weather have started to cause restaurant cancellations, said
Martin Williams, CEO of owner Rare Restaurants, which runs
Argentine steakhouse brand Gaucho and grill-centric M
Restaurants.
    Even so, sales at Gaucho and M Restaurants have grown about
50% in the first two weeks of December versus 2019. December was
the first month during the pandemic in which bookings increased
for group events, he said, citing pent-up demand to celebrate
the holidays.
    In Manchester, England, dining at high-priced restaurants
rose 18% from Dec. 1-12 versus the same period last year, even
as overall dining in Manchester fell 13%, according to online
booking site OpenTable.
    BEEF PRICES BE DAMNED
    At steakhouse chain Smith & Wollensky's Boston location, a
10-ounce coffee and cocoa rubbed filet mignon now costs $65, or
18% more than in 2020, due to higher beef costs. The chain did
not reply to requests for comment.
    In November, comparative sales for high-end U.S. steakhouses
were 17.4% higher than in 2019 on both higher menu prices and
increased foot traffic, according to Knapp Track data.
    This quarter, Ruth's Chris Steak House owner Ruth's
Hospitality Group Inc  RUTH.O  is on track to post comparable
sales growth of 5.4%, Refinitiv data shows.
    Diners are still eating out in part because the cost of
groceries has risen even more than a restaurant meal. The cost
of groceries eaten at home is expected to rise 11%-12% in 2022,
versus predictions for increases of 7-8% in restaurant food
prices, according to November forecasts from the U.S. Department
of Agriculture.
    Many independent restaurants also still have not raised menu
prices enough to offset the higher cost of goods, for fear of
scaring off diners. 
    "We can't keep up with it," said Ann Hsing, chief operating
officer of the French bistro Pasjoli in Santa Monica,
California, referring to inflation.
    The cost of turkey, butter, truffles and canola have all
risen threefold or more, prompting Pasjoli to hike the price of
its Thanksgiving to-go boxes by about 40% to $140 this year from
last year. Pasjoli's email inbox has been flooded with requests
for information about private events, she said.
    Overall, Thanksgiving reservations in the United States –
usually a signal for the rest of the holiday season – were up 6%
over last year and about flat compared with pre-pandemic levels,
according to data from OpenTable.
    "Short of some other external pandemic-esque-type event,
we're quite bullish on what's going to happen this holiday
season," OpenTable CEO Debby Soo said.     
    New York's iconic Tavern on the Green in Central Park was
closed for much of 2020, and last year many people cancelled
their holiday parties there due to Omicron.
    Now, tourists and guests are making up for years of lost
experiences, undeterred by the fact that the Chocolate Peanut
Butter Lava cake costs $16, which is 14% more than it did in
January 2020, owner Jim Caiola said. Booking levels are higher
than in 2019.
    "It feels amazing," Caiola said. "I'm very full of hope."
 (Reporting by Hilary Russ in New York
Additional reporting by James Davey in London
Editing by Matthew Lewis)
 ((Hilary.Russ@thomsonreuters.com; +1 (646) 223-7381; Reuters
Messaging: hilary.russ.thomsonreuters.com@reuters.net))