By FRANK SWERTLOW

Staff Reporter

How high are you willing to go to ring in the new millennium?

A thousand bucks for dinner? An $8,740 hotel suite?

There is no shortage of outlandishly expensive offerings for this New Year’s Eve, and despite ongoing debate about whether some hotels and restaurants are reaching gouging proportions, some of the priciest blowouts already are booked to capacity.

“It’s a high-priced evening,” said Carol Martinez, a spokeswoman for the Los Angeles Convention & Visitors Bureau. “Look around the world, that’s what’s happening.”

Demand for lavish year-end fetes is especially strong in Los Angeles, where many residents have seen their net worths explode with the Wall Street bull market and a strong local economy.

At the Hotel Bel Air, the New Year’s tab is $1,100 per couple for a six-course meal that includes champagne and dancing. While that’s a veritable bargain compared with the Beverly Hilton’s $1,000-per-person tab, Hotel Bel Air guests are also required to book a four-night minimum hotel stay, starting at $350 per night for a double room.

But don’t bother to call. The hotel is sold out and has been for a year.

Not to worry Merv Griffin’s Beverly Hilton still has openings for its $1,000-per-person millennium soiree, which includes a six-course meal, all the booze you can drink, and dancing to the music of five bands.

“While it might not seem to be the lowest charge, we have done a competitive cost analysis and the magnitude of what we are offering is the best in town,” said a Beverly Hilton spokeswoman.

The epitome of self-indulgence can be found in Santa Monica, where Shutters on the Beach is asking $8,740 for the minimum three-night stay in its presidential suite, which includes daily breakfasts, a millennium brunch, a gift and New Year’s day dinner. Its New Year’s Eve party is a relative steal, at $275 per person. (That doesn’t include tips, alcoholic beverages or taxes.)

Several marketing experts agreed that there’s nothing unethical about charging nosebleed prices.

“This is nothing like what happened after the Northridge earthquake, when people were overcharging for necessities like food and water and gasoline,” said Nancy Kurland, an assistant professor at USC’s Marshall School of Business. “This is not life and death. This is not access to needed resources. (Customers) have an alternative. They don’t have to do it.”

But whether charging sky-high prices is a wise business strategy depends on whom you talk to.

“I know a lot of people will try to take advantage of (New Year’s) night,” said Joachim Sandbichler, general manager of the Water Grill in downtown Los Angeles, where a four-course meal at 5 p.m. on New Year’s Eve will be $100 (an eight-course meal after 8 p.m. is $200). “We want to give people value for their money. A $150 meal will be worth $150. We don’t want to turn off the clients. We are not gouging anyone.”

Still, New Year’s Eve pricing policies are clearly a business judgment. “Some places prefer a safer approach; they prefer to cultivate long-term relationships,” said Mike Hanssens, a marketing professor at UCLA’s Anderson School of Business.

But other businesses are targeting the once-in-a-lifetime crowd, who will become very “price insensitive” on New Year’s Eve.

“They have to produce something that the consumer values in line with the steep price,” said Arvind Bhambri, associate professor of strategy and ethics at the Marshall School. “Let the market determine what the consumer will bear. If people can afford this and it will be truly memorable, you can argue that it’s OK.”

Setting prices at sky-high levels for special occasions is hardly new. It’s regularly done during major events like Super Bowls and the Olympics with hotels and restaurants doubling and tripling their normal rates to capitalize on the one-of-a-kind spectacular. But unlike many of those other high-profile events, which draw large numbers of out-of-towners, the New Year’s Eve festivities will most likely draw primarily locals.

And that makes the high-price strategy riskier.

“If it’s perceived as gouging, it could hurt them in the long term,” said Kurland.

Hanssens said many overpriced establishments might eventually be forced to cut their prices rather than face empty seats or hotel rooms. “Many people have overestimated the hype,” he said. “If the prices are too high what you will be seeing is traditional price-and-demand economics come into play.”

Hoteliers and restaurateurs deny they will cut their prices, saying it is too early to make any such decision. But demand for millennium festivities, which had been bubbling for months, has cooled in recent weeks.

Hotel and restaurant experts blame the chill on price gouging, a desire among some people to stay at home and celebrate quietly with friends, and even on Y2K fears.

“A lot of people are concerned about the year 2000; they want to stay close to home for Y2K,” said Keith Elmer, an accountant at Ernst & Young LLP.

The final days before the turn of the century, however, could still turn into a stampede to get that perfect table or hotel room with a view at any price.