Nestled deep in the Calabasas hills, the Saddle Peak Lodge has seen more than its share of disaster-related business swings. This time, it’s different.
“We’ve had fires and floods, but nothing this bad,” said managing partner Gerhard Tratter of the extremely slow days following the Sept. 11 attacks.
Meanwhile, Santa Monica’s Library Alehouse had a different experience altogether. “The night of the 11th was one of our busiest Tuesdays ever,” said David Lackman, head of the establishment. “I guess people just wanted beer and comfort food.”
The local restaurant industry, noted for its unpredictability in the best of times, has been even more so during the six weeks since the terrorist attacks on New York and Washington. While restaurateurs are largely reporting a return to pre-attack form during the weekends, mid-week business has proven to be a mixed bag. Some popular eateries are dying for customers even during the prime 7-8 hour; others are just as crowded as before.
“There’s some decline, more noticeably mid-week,” said Tratter. “Weekends are back to regular strength.”
The mid-week drop-off is attributable to several factors: a decline in business customers, the near-disappearance of the tourist industry, and to some extent, a greater desire to eat at home.
The popular Daily Grill chain offers a good snapshot of the environment. While the eight “free-standing” Daily Grill restaurants have returned to pre-attack business levels, the LAX, Burbank Hilton and CityWalk locations are still suffering. “CityWalk was hit very hard,” said Bob Spivak, chief executive of Los Angeles-based Grill Concepts Inc.
Local losses
But even the more “local” operations feel the effects of the loss in tourism. California Beach Restaurants Inc. Chief Executive Alan Redhead, whose company owns and operates Gladstone’s Malibu and RJ’s in Beverly Hills, noted that Gladstone’s is just starting to get back to last year’s revenue levels.
While he reported a 30 to 40 percent decline at the $13 million-a-year (revenues) operation in the first couple of weeks after the attack, his weekend business, which is predominantly local, has been strong. Meanwhile, RJ’s in Beverly Hills, which is largely frequented by tourists, “has been a disaster area,” as it continues to experience a 15 to 20 percent drop in business.
Lackman noted that Library Alehouse hasn’t processed a traveler’s check since the attacks. “We usually get five to 10 a week,” said Lackman.
While it’s hard to quantify, some of the decline seems to stem from concern about the economy and an effort to put the brakes on disposable income.
Tratter said there has been a drop in business dinners, leading to the mid-week weakness. He estimated that his corporate business has fallen to 20 percent of his mid-week traffic, from the typical 40 percent. “Until many of the larger companies get back to what they used to do, that’s not happening at all,” he said.
But quirky trends are also at play. Michael Cardenas, a partner at Sushi Concepts LLC, said the company’s West Hollywood restaurant, Sushi Roku, is actually benefiting from the travel drop because “entertainment people are not traveling abroad, so they’re doing a lot of business lunches.”
Whether the business is mid-week or weekend, people returning to restaurants appear to be favoring the tried and true over the novel.
The ultimate example is the 93-year-old downtown institution Philippe The Original. “We actually suffered no downturn,” said Richard Binder, general manager and partner, who noted that the restaurant met its expected 3 percent annual revenue increase for September.
Comfort zone
Some less venerable operations that have established themselves as a neighborhood standbys also returned to pre-attack levels within a couple of weeks. “My business has not suffered because it’s a comfort zone,” said Jack Srebnik, owner of 17th Street Caf & #233; in Santa Monica.
“I think that the companies that are proven, either neighborhood or corporation, are seeing a resumption,” said Douglas Christopher, an equity analyst for Crowell Weedon & Co. in Los Angeles.
Almost as unpredictable as the effect of the attacks has been the timing of business declines. For Gladstone’s, Saddle Peak and 17th Street Caf & #233;, the effect was swift and severe, as each reported a dramatic drop in business during the week of Sept. 11. But Library Alehouse’s decline was somewhat delayed, as it reported a 10 percent drop during the last week of September and the first week of October. “It really took a couple of weeks for any effect to be felt,” said Lackman.
