A Not-So-Happy New Year For Restaurants

ELV POSTS CORRECTION: We mistakenly reported that Woo in The Palazzo had closed. We discovered last night that reports of its death had been greatly exaggerated. All bets are off, however, on its chances for survival. ELV blames his staff and regrets the error.

Now, back to reality.

The headline in Nation’s Restaurant News in June said: “Vegas refuses to fold as economy craps out.” By late September that same banner read: “Hard luck befalls Las Vegas following U.S. housing bust.”

The first article was full of quotes from the usual celebrity suspects and their flacks about how things weren’t as bad as they seem. Three months later, every one of them admitted business is down (in food and beverage up and down The Strip) around 16% from a year ago.

Off the record, a number of F&B honchos have told me the figure is closer to 20%, and one very famous celebrity chef suffered a 45% decline in sales for 2008.

The canary in the coalmine was probably DJT. This exquisite jewel box could only sustain itself for five months – which didn’t prevent it posthumously from receiving a Michelin star. But then, quickly, it became a harbinger of things to come.

In rapid succession Louis Osteen closed Louis’ and Louis’ Fish Camp, Joseph Keller quietly folded Bistro Zinc at Lake Las Vegas, Sapporo, SeaStone and even a steakhouse: Becker’s – threw in the towel. Andre’s Downtown is history (good riddance) and a number of places in The (overbuilt) Palazzo are said to be hanging on by the skin of their teeth. As of this writing, Mainland has closed and more shutterings (Woo, Table 10, et al) are rumored to be in the works.

All of this bodes well for diners, as early bird specials and bargain prix fixes are showing up in places everywhere but the big boys…and even Guy Savoy has his Bites and Bubbles bar menu, that’s a relative bargain, and a wine list that seems to have more good bottles under $100 than ever).

Are you listening out there sommeliers of the world? Bring down your wine prices if you want to sell the stuff! This economy won’t abide 3-400% markups anymore, and the salad days of expense-account-drenched, Dionysian revelry are over….

Into this stew pot of lowered expectations comes Encore – with five new restaurants — three of which are aimed at the fine dining crowd: Sinatra’s (Chef Theo Schoenegger); Botero Steak (Chef Mark Lo Russo-KNPR’s Chef of the Year in 2007); and Switch (Chef Mark Poidevin). How these will fare in an already crowded (and much less profitable) field, should be most interesting to watch.

Wynn has already scuttled plans to open Larry Forgione’s An American Place, in the space housing Tableau. Forgione (an American food and chef icon) is now hard at the stoves at Tableau as its Executive Chef – updating and revising its menu – but not getting his signature restaurant name on the door (or the redesign that the place sorely needs).

Yes, we’d like to say Happy New Year to all, but the last 12 months have been anything but for our restaurant scene, and 2009 may be even worse….

10 thoughts on “A Not-So-Happy New Year For Restaurants

  1. This will certainly be more visible in Las Vegas, but the problem is not limited there. I expect that we will begin to see a consolidation within the industry much like in other industries that is also happening. Hopefully the survivors will not just be those with business smarts, but those with quality restaurants and business smarts. Unfortunately, I expect that we will begin to see (as we already have) very good restaurants with either poor timing or lesser business acumen fall by the wayside.

    Sorry to hear that about Tableau not changing over its name to An American Place. As disappointing as that must be to Forgione, at least he still has a place, which is not a bad situation to be in right now regardless of the name on the marquee. I imagine that life will be more difficult for name (or other) chefs between projects.

  2. Happy New Year, John (ELV) & John (docsconz)!

    I was talking with a chef recently, and he was saying that one good thing about this situation is we’ll see restaurants run by chefs who really want to cook, instead of all those nightclubs posing as restaurants. Restaurants with substance (and substenance), not a bunch of scenes with attitude.

    I’m not 40 million people (not do I eat like that), but I’ll try to do my part … In fact, I’ll be staying at the new Encore Resort later this month, engaging in some culinary research. I wouldn’t mind having some research assistance when I come into LV in a couple of weeks.

  3. I walked by Woo this afternoon and it was very much open. I am sure it is on the way out but it’s not dead yet. Also, my fearless predictions for the Encore restaurants are as follows: Botero and Switch will do well, because steak and gimmicks do well in this town. Wazuzu will survive thanks to a continuing stream of Asian businessmen who already recognize the Wynn brand and want something at least somewhat familiar to eat. Society will lower its prices in the next three months. And finally, the north end of the Strip is home to so many run of the mill and even bad italian places, that people won’t even realize Sinatra’s is there. I give it a year and a half in it’s current incarnation before it finds a gimmick or more steaks on the menu.

  4. bw, I disagree with your prediction about Sinatra. Frankly speaking, Sinatra is the flagship restaurant of Encore, IMO. Chef Theo is a great chef from Patina in downtown Los Angeles. And the Sinatra family would not give their permission to Steve Wynn for just a gimmick or museum piece.

    Mind you, my opinions might change after I tried all five Encore restaurants. Would you like to be a volunteer research assistant during the three-day weekend in Jan. 2009, Brian?

  5. Woo has some excellent dishes, and Peter Woo is obviously a very talented chef, but it’s had problems from the start–being one of at least 6 Asian destinations in one property (V/P), with a relatively low-key approach. It’s kind of like the ugly girl at the dance, who just happens to have a fantastic personality. I hope it figures things out.
    The New Yorky Mainland would’ve kicked ass at a 3-star property like, um, New York New York, but was totally hidden in the Shoppes and hampered again by too much Asian competition (duh!) and not enough marketing.
    Encore’s mix of restaurants is intriguing (I’ve only tried one so far), but it’s hard to say whether anything will outshine the star galaxy already in place at Wynn. I had one of the best breakfasts of my life at Tableau under LoRusso, but never had dinner there–too many other great choices on property, frankly.
    Sometimes I believe that operators really misjudge the culinary interests of their guests–or simply fail to understand that chef name alone doesn’t say enough about a restaurant. As in all things, communication is key.

  6. I don’t know if I was clear enough in my Sinatra prediction. I have not eaten there, so it is not a judgement of its food, it is, however, a judgement of the typical strip clientele and their predilection for bad Italian food at moderate prices (as illustrated by the always busy Zeffirino at the Venetian). And, if I can break away from work, I would be happy to dine with you, Russell.

  7. Sounds like the bubble has popped on the wine prices, it’s a bit arragant of the restaurants to keep raising prices until they stop selling, it makes it guaranteed that we’ll always be paying too much.

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