For the planet’s bars, restaurants, and hotels, the pandemic has been a brutal, sometimes terminal experience. The industry journal Restaurant Business has, for example, estimated that the restaurant sector as a whole is on track to lose $240 billion in 2020 in the U.S.
High-end establishments have not been spared. The James Beard Foundation says that surveys of its members, foodies who tend to patronize more exclusive venues, report that some 40 percent of restaurants are still fully closed, as they try to weigh re-opening amid shifting capacity limits.
Many may be shuttered forever; in the height of the pandemic, celebrity chef Wolfgang Puck told CNBC that he believed one-quarter of U.S. restaurants would never open again. That assessment, made in July, may now look optimistic.
There is a common misconception that expensive restaurants, hotels, and bars are money-printing machines, but in reality profit margins are much tighter.
The truth is (usually) rather different; as the restaurateur and writer Joe Bastianich memorably summarized the low-margin, high-overhead, big splash world of fine dining in his book, Restaurant Man, “You have to appear to be generous, but you have to be inherently a cheap fuck to make it work.” Bastianich had this lesson drilled into him by his father who, he writes, used chalk to hide sauce stains on tablecloths to minimize laundry bills.
Few hospitality venues were in actuality sitting on big piles of cash in March 2020 to see them through the abrupt halt to their revenue stream.
However, this week there was some cheer for the luxury dining sector when it was reported that one of America’s most famous chefs, Thomas Keller, of the legendary French Laundry in Napa, California, was re-opening after the county became the only one in the Bay Area to allow indoor dining, albeit at just 25 percent capacity.
Eater San Francisco reported that, for a cool $850 per person, parties of up to eight guests can book one of three inside tables. Each table is in its own dining room, which before the pandemic would have hosted several tables. Diners will enjoy the restaurant’s signature extended chef’s tasting menu that starts with canapés and a bottle of 2006 Dom Pérignon, and includes dishes such as oysters, foie gras and Wagyu beef.
More tables are available in the restaurant’s outdoor courtyard, where a more modest $350 menu is available.
It’s tempting to assume a chef of Keller’s stature can simply click his fingers and have the credit card numbers rolling in, but the reality is that event the smartest restaurants are in a fight for their lives right now. It is a fight that another of Keller’s restaurants, the TAK Room in New York’s Hudson Yards, has lost, with Keller announcing that it would be closing permanently because of “irreparable damage” from the pandemic.
Different outfits have approached the battle for their survival differently, and one of the most interesting dining trends to emerge from the pandemic is the elite take-out.
Take, for example, the much admired The Brothers Sushi, in Woodland Hills, California. Brothers was on track for a stellar 2020, having been named “Best Omakase” by LA Magazine (omakase means, “I’ll leave it up to you,” and is typically a multi-course menu with dishes selected by the chef).
But when indoor dining ground to a shuddering halt, The Brothers Sushi sought to keep its brand alive and stay engaged with its customers by effectively turning its high-end sushi offering into a delivery and take-out operation.
Owner and executive chef Mark Okuda told The Daily Beast, “I never imagined doing a take-out business. We always ran Brothers as a high-end, eat-in experience. But in March, when the pandemic hit, we had to adapt really quick. We had to come up with take-out menu items.”
Despite reducing prices by around 30 percent, and including some bargain lunch items such as soy sauce glazed chicken and rice for a mere $18, the menu is still eye-wateringly expensive by the standards of most mortals' take-out habits. Fancy plunking down $180 for a 30-piece sushi or $250 for a 2-person omakase to go?
Astonishing as it may seem, sales have held up. Another popular item has been the seasonal menu, which might include such delicacies as hair crab or Wagyu beef from Japan, and clocks in at a cool $180 per person as a take-out.
“Honestly, I miss the customers. I miss having them in front of me,” says Okuda, “But at the same time this has been a chance, an opportunity to venture out and do something completely new, which is high end in a take-out fashion, really focused on quality.”
Noah Tepperberg, co-founder of the Tao group, which currently has a variety of Tao and Lavo restaurants open in New York, Las Vegas, Singapore, Los Angeles, and Chicago told The Daily Beast that his restaurants are taking the temperature of all guests and crew, leaving plenty of space in between tables, and that all guests are required to wear a mask when they get up from their table.
Tepperberg, who sold a controlling interest in Tao Group in 2017, says that bookings are “going well at most places,” and detects pent up demand: “With limited availability—in L.A. only outdoor seating is available; in Chicago, Vegas, and Singapore, we are allowed 50 percent capacity inside—we are booking up pretty quickly. Going forward it looks like people are itching to go out, so we are hopeful that will continue.”
Tepperberg thinks that a forthcoming easing of regulations in New York will help matters: “In New York City we have been limited to outdoor seating only, but, per this week’s announcement, indoor dining will return but will be limited to 25 percent (with a max of 50 people) beginning September 30. This is a step in the right direction. If we can get a few days in October with inside and outside that will help a bit. But hopefully we will be at 50 percent sometime in November.”
Luxury bars where cocktails sell for premium prices are also figuring how to turn a profit in a world of social distancing. For example, one of the most exciting new bar brands of recent years, the award-winning Broken Shaker, which has outlets in New York, Los Angeles, Miami, and Chicago, charges $17 for a cocktail before tip or tax.
Despite seeing a “an uptick” in bookings, and having had some success with home cocktail kits and natural wine deliveries, it’s still an immensely challenging time. Jarred Grant, director of operations at Broken Shaker, told The Daily Beast, “Everyone is gun shy to hard book things.”
Like everyone in the hospitality industry, the big hope at Broken Shaker is increased capacity. “Because we have venues in multiple cities," Grant says, "we are dealing with varying degrees of capacity. We are hoping to see the conditions to safely open indoor spaces at a higher occupancy is in the near future.” (The James Beard Foundation says that most restaurant owners say they need to have at least 50 percent capacity available before re-opening will be a realistic prospect.)
Reduced capacity is an issue even at one of the world’s largest and most spacious hotels, the super-luxury Irish hotel Ballyfin Demesne, which is decorated with Old Masters and was named the “Best Hotel in The World” by Conde Nast Traveller in 2016. A double room with gourmet meals included for a couple starts at around $1,000.
Manager Damien Bastiat tells The Daily Beast, “We are a 20-bed hotel in a 40,000 square foot building set on 690 acres of parkland, so social distancing per se has never been an issue for us, but we have reduced our capacity further, to just 12 rooms, so our guests feel further reassured.”
Bastiat says the reduction in capacity has enabled the hotel “to remain an experience” and says “the feedback has been overwhelmingly good.”
What does the future hold? “It’s really hard to forecast more than couple of weeks away at the moment,” says Bastiat, “We don’t want to be presumptuous, but we are seeing very strong support from our repeat guests. Some of our repeat guests have said we were the first place they thought of getting to [when the lockdown lifted].”
But, says Bastiat, winter is coming, and there is no denying there are going to be “tough times” ahead.
It’s a somber and cautious sentiment, and one that most in the super-premium corners of the hospitality business will identify with.