Holiday bookings up despite inflationary prices
Cost of meat has escalated considerably
16 December 2022
4 minute read
By: 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, 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 US 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 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."
