Restaurateurs decry sales drought as Republicans depart Manhattan

Nation's Restaurant News, Sept 13, 2004 by Paul Frumkin

NEW YORK -- The 2004 Republican National Convention ended up not being much of a party for many Manhattan restaurateurs as snarled traffic, disruptive demonstrations and widespread residential flight choked off business during the four-day event.

While a handful of foodservice operators benefited from private-party business generated by the estimated 50,000 visitors in town for the GOP convention, most operators reported that their regular business was down for the period.

"It's killing us," Zane Tankel, chief executive of Apple-Metro Inc., said three days into the convention. Harrison, N.Y.-based Apple-Metro operates three Applebee's and one Chevys Fresh Mex dinnerhouse in Manhattan. "We're probably down 50 percent for the week."

Most operators cited the heightened security measures around Madison Square Garden and the midtown area for scaring off regular tourists and local residents, many of whom fled the city for the week leading up to Labor Day. At the same time, businesses around Madison Square Garden--the site of the Convention--advised employees to work from home if possible.

"[The convention] has turned out to be a big disappointment in terms of bringing large crowds into restaurants," said Chuck Hunt, executive vice president of the New York City chapter of the New York Restaurant Association. "After listening to all of the hype about security and traffic being redirected, a lot of people who live and work in New York just decided to leave town. Obviously, the security is necessary, but they made such a big deal out of it."

Organized political protests also were a factor as an estimated 250,000 demonstrators gathered in the city for the convention. By the end of the week, police had made about 2,000 arrests.

City officials had hoped that the convention would generate a windfall for New York businesses. New York Mayor Michael Bloomberg earlier had estimated that the GOP convention, which ran from Aug. 30 through Sept. 2, would generate $260 million for the city.

Restaurateurs had said they hoped positive publicity from the event would benefit New York over the long run, but most placed the week in the negative column. Drew Nieporent of Myriad Restaurant Group--which operates such restaurants as Montrachet, Tribeca Grill and Nobu--said he was involved in the mayor's efforts to attract both the Democratic and Republic conventions to New York.

"I didn't think the security would affect business this much," Nieporent said. "I suppose the convention has helped hotels and some places hosting big parties. "Unfortunately, I think restaurants took a beating."

"It's had a negative impact," agreed Phil Suarez of Jean-Georges Management, which operates such restaurants as Jean Georges, Spice Market and Vong. "But it's what we expected. This week is historically slow, and [the RNC] has compounded that."

On the whole hotels in Manhattan were expected to derive a greater benefit from the convention. About 18,000 hotel rooms had been set aside for delegates, of which about 80 percent were booked, according to NYC & Co. As a result, hotel occupancy would hit 87 percent for the week. up from 73.7 percent last year, according to a PriceWaterhouseCoopers estimate.

Nevertheless, discounted delegate rates of $156 per night fell beneath the city's average room rate of about $190.

Nor did a hotel's occupancy necessarily translate into business for its restaurants. At the Waldorf-Astoria--which, as the headquarters hotel for the RNC, was booked fully--business at the Bull & Bear restaurant was down by 25 percent to 30 percent. "It wasn't unexpected," said representative Shelley Clark of Lou Hammond Associates. "A lot of the restaurant's regulars are out of town, and those that are here may have concerns about possible security nightmares around the hotel. [And conventioneers] have many other free dining options."

Much of the restaurant community's event-related business, in fact, came from the hundreds of private catered affairs around the city. Tavern On The Green catered 23 parties during the event, which is expected to boost the restaurant's revenues 40 percent over the results for the same period a year ago. However, Clark, who also represents Tavern, reported that a la carte business was down for the week.

Even several of the foodservice companies that had been selected to cater official events characterized business as being flat. Dan Searby, senior vice president of marketing for Restaurant Associates, said the New York-based company catered 35 events and served "north of 10,000 covers. We captured a lot of event business. But our a la carte business was down significantly [for RA's restaurants]. It hasn't quite been the windfall we expected. I'd say it was a bit of a wash."

RA catered most of the parties at its high-end restaurants around town as well as at the new Time Warner Center. At the same time, RA's Nick & Stef's steakhouse in the "frozen zone" of the Madison Square Garden complex was bought out completely and used by the Republican National Committee as a hospitality suite. "People needed security clearance to get in," Searby said.