Critical Mass?

[Nathan]

SneakEater posted a comment the other day that I thought was worth singleing out -- are there more high-end restaurants (average check per cover of $100-plus) in NY than the market can bear.

Is this why any new high-end place is packed for three months but many struggle after that?

And specifically, is this why even established, well-regarded restaurants often close after a couple years in business? Heck, even Jovia and March are now apparently on the ropes.

[Sneakeater]

Just to keep things in the same thread, here's the post:

It's true about places like the Biltmore Room and Cru:  they get these extremely favorable reviews, for a while you can't get into them, and then at some point it's all too easy to get into them.

Meanwhile, you still often can't get near Landmarc, even after all these years.  Not to mention a place like Balthazaar.  Or even Al Di La, for that matter.

Which makes me wonder:  are there actually more expensive restaurants in New York than the market can bear?  Were there always so many new openings each year, with new places edging out old places, and then getting edged out in turn?  Or is this a relatively new phenomenon (maybe having its roots in the 80s and developing from there)?

I'd have imagined that there used to be more stability, but maybe I'm just imagining a past that never existed.  (Certainly, things still stay fairly stable at the very top:  it's not like it's that easy to get into JG or Daniel.)

This seems like the kind of thing Fat Guy would know.

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[Megan Blocker]

Or, is it a possible representation of New York's finicky nature? In other words, do high-end restaurants close because the market can't bear the number of them that exist? Or is it that New Yorkers are unwilling to commit to more than a handful of favorite high-end places, and constantly demand change and renewal?

[Sneakeater]

Same question, though: was it always like that?

[oakapple]

SneakEater posted a comment the other day that I thought was worth singleing out -- are there more high-end restaurants (average check per cover of $100-plus) in NY than the market can bear.

Is this why any new high-end place is packed for three months but many struggle after that?

And specifically, is this why even established, well-regarded restaurants often close after a couple years in business?  Heck, even Jovia and March are now apparently on the ropes.

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I don't know how we'd measure that. What's the basis for the statement that many (as opposed to "some" or "a few") struggle after the first three months?

In particular, neither of the examples in Sneakeater's post really stood for the stated premise. Cru isn't struggling at all. You don't need to reserve months in advance, but it generally sells out prime-time seatings. Cru is clearly a hit.

Biltmore Room did close, but that was after almost a three-year run. If it was already struggling after three months, I doubt it would have lasted that long.

March was not in business for "a couple of years." It had an extremely long run, having opened in 1990.

Jovia? Well, that's the only one mentioned that more-or-less fits the pattern, though not necessarily because there are more high-end restaurants than the market can bear. A certain number of restaurants are going to fail, even in the best of times. (Was the average check size at Jovia over $100? I actually think of Jovia as a mid-level place.)

[Sneakeater]

So maybe it's just that there's a pattern that John LaFemina reported (and none of his places are high-end). Great first several months for practically anywhere with decent publicity. Then, the shake-out period, where only the places with legs survive (and even then with business diminished from the honeymoon period). (It's here, I believe LaFemina noted, that things like reviews become important.)

Edited December 21, 2006 by Sneakeater (log)

[Chris Amirault]

oakapple, are you suggesting that a three-year run, a la the Biltmore Room, demonstrates stability? I'm just wondering what counts as a "long" or "solid" run in this context, particularly given the astronomical start-up costs for any restaurant in Manhattan.

edited to indicate addressee -- ca

Edited December 21, 2006 by chrisamirault (log)

[Sneakeater]

SneakEater posted a comment the other day that I thought was worth singleing out -- are there more high-end restaurants (average check per cover of $100-plus) in NY than the market can bear.

Is this why any new high-end place is packed for three months but many struggle after that?

And specifically, is this why even established, well-regarded restaurants often close after a couple years in business?  Heck, even Jovia and March are now apparently on the ropes.

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I don't know how we'd measure that. What's the basis for the statement that many (as opposed to "some" or "a few") struggle after the first three months?

In particular, neither of the examples in Sneakeater's post really stood for the stated premise. Cru isn't struggling at all. You don't need to reserve months in advance, but it generally sells out prime-time seatings. Cru is clearly a hit.

Biltmore Room did close, but that was after almost a three-year run. If it was already struggling after three months, I doubt it would have lasted that long.

March was not in business for "a couple of years." It had an extremely long run, having opened in 1990.

Jovia? Well, that's the only one mentioned that more-or-less fits the pattern, though not necessarily because there are more high-end restaurants than the market can bear. A certain number of restaurants are going to fail, even in the best of times. (Was the average check size at Jovia over $100? I actually think of Jovia as a mid-level place.)

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Not that I'm arguing with you on the facts, because you're probably right.

But:

From your own weblog, Town.

Also, Alto.

Edited December 21, 2006 by Sneakeater (log)

[Fat Guy]

One thing to bear in mind about restaurants in the grand-luxe category is that two restaurants with identical food costs and menu prices can nonetheless have radically different balance sheets. Things get especially murky when a restaurant is part of a hotel's food-and-beverage operation or a centrally planned mega-project like the Time Warner Center, or is a signature/flagship operation subsidized by lower level places within a conglomerate built around a chef's brand.

[Daniel]

SneakEater posted a comment the other day that I thought was worth singleing out -- are there more high-end restaurants (average check per cover of $100-plus) in NY than the market can bear.

Is this why any new high-end place is packed for three months but many struggle after that?

And specifically, is this why even established, well-regarded restaurants often close after a couple years in business?  Heck, even Jovia and March are now apparently on the ropes.

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Yeh, I dont think New York is saturated by any means.. I just think that places need to serve a purpose.. Here is my quick Theory.. An expensive restaurant needs to have customers.. Who goes to an expensive place.. Either business folks not paying, rich people eating there daily meals, a couple out for a special occasion or romantic dinner, or people looking for awesome food and service.. So, if these places start to stray from there roles, they are left out in the cold..

Here are my catagories for why people are eating at expensive restaurants..

1)Expensive new place which is hot and hard to get into.. Morimoto was one 2)Expensive regular place were they have there Rich Regulars and business people.. 21 club comes to mind or LCB 3)Special Occasion/Romantic expensive places One if By Land 4) Four Star expensive places Per Se..

A place like March for example didnt fall into any of these catagories.. I had gone through out the years and was not taken back by the food, or the room.. It was just an ok experience that required me to wear a suit.. It must have had a group of rich regulars that kept the place going.. Anyway, I think there is plenty of room for high end dining and plenty of money in Manhattan..

Edited December 21, 2006 by Daniel (log)

[oakapple]

oakapple, are you suggesting that a three-year run, a la the Biltmore Room, demonstrates stability? I'm just wondering what counts as a "long" or "solid" run in this context, particularly given the astronomical start-up costs for any restaurant in Manhattan.

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No, I'm not. I was only suggesting that it did not meet the description of a "hot place that starts to struggle after three months." Failure after about three years is pretty common in the restaurant industry, in both good times and bad.

Not that I'm arguing with you on the facts, because you're probably right.

But:

From your own weblog, Town.

Also, Alto.

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There's clearly a natural birth-life-death phase in the restaurant industry, as in all industries. The question is whether it's due to over-capacity, or some other explanation.

Alto strikes me as a place that never truly caught on. Scott Conant's reputation got people in the door, but there were some peculiar items on the menu that diners didn't fancy (Conant has admitted this).

Town is now five years old, and obviously it was doing well enough for Zakarian to double-down with Country. Clearly it's no longer the "hot restaurant" it once was, but I don't have enough data to conclude that it's struggling.

[Nathan]

going to Daniel's post:

Stephen Starr said in a recent interview that making a relatively high dollar per cover (his places seem to be in the $75-100 average as an educated guess (similar to Jovia -- people always discount how much booze boosts the average in these places) place survive in NY depends upon pretty much one factor:

the B&T. You've got to get them in the door with buzz and keep them there with glitz.

I tend to think that's true. Now the expense account places (mainly steakhouses) are an obvious exception to this, as well as certain restaurants aimed at an older UES crowd (the Carlyle etc.)...but in general, I think he's right.

[Nathan]

I somewhat overstated Starr's opinion -- he thinks that B&T business is necessary for survival, not necessarily the only factor:

"We still need the steady bridge-and-tunnel crowd. Even restaurants that think they’re supercool and super-trendy need the suburbs."

http://nymag.com/restaurants/features/24739/index.html

but that doesn't change the thrust of the point at all.

[docsconz]

I liken it to Broadway. There are plenty of new openings each year. Some are very well produced, but for whatever reason have limited runs. Others, ill-conceived, bomb out more or less quickly and others become big hits with multi-year runs fueled largely by out-of-town visitors lured by the name and reputation of the show, but also supported to varying degrees by New Yorkers.

[oakapple]

"We still need the steady bridge-and-tunnel crowd. Even restaurants that think they’re supercool and super-trendy need the suburbs."

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Is that true of all restaurants with sustained success, or merely of the kind Stephen Starr is associated with?

[Nathan]

my post characterized it as above a given price point -- with the exceptions that I noted.

[Sneakeater]

I liken it to Broadway. There are plenty of new openings each year. Some are very well produced, but for whatever reason have limited runs. Others, ill-conceived, bomb out more or less quickly and others become big hits with multi-year runs fueled largely by out-of-town visitors lured by the name and reputation of the show, but also supported to varying degrees by New Yorkers.

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The only thing I'd say -- and this is part of what led me to raise this query, misbegotten as it might have been -- is that I'm not sure I see any clear correlation between any kind of discernable quality and longevity in restaurants (at least below the absolute top level).

Now you might say that's true of Broadway, too. But even with Broadway (where I personally would say that at least 80% of what's put up -- and at least 90% of what has long runs these days -- is absolute shit), I can at least understand why some things succeed and some don't (in other words, while they're not pitched to my taste, I can still sort of discern that there's a taste to which they are pitched, and against which they can be judged). And likewise, I can understand why there are things I like on Broadway that aren't huge hits.

Restaurant survival seems much more random than that to me. It just seems to me -- totally anecdotally, I admit -- like, now more than ever, perfectly good places get supplanted by other perfectly good places.

I may be wrong, of course.

Edited December 21, 2006 by Sneakeater (log)

[Nathan]

on any given night -- who composes the crowd at say, JG?

probably at least 30% birthday and anniversary types who eat at a place like this no more than once a year. this will be a mixture of locals and B&T.

probably 10% regulars.

probably 10-20% expense account and celebratory dinners.

probably 25% foodies with some disposable income. this will be a mixture of locals and B&T.

and probably 25% tourists. you can probably double this amount on the weekends.

(no, it doesn't add up to 100%. I'm just trying to be ballpark here. But I bet the restaurant knows the exact real numbers).

Now let's take a cheap neighborhood place like Ino.

75% locals (as in the WV or SoHo) any given night of the week.

the other 25% come from other parts of downtown.

on the weekends it might get a 2% B&T crowd -- if that.

now let's take a place similar in food and price point -- Otto. (I know that Ino doesn't serve pizza but Otto might as well not, it's the rest of the menu that's worth eating.)

Sunday through Wednesday (well, really Tuesday now that Wednesday is becoming the new Thursday) it might actually be 60% locals. But Thursday through Saturday it is 50% or more B&T and uptowners.

Go there on the weekend and you will invariably here the following conversation: "This place is cool! However did you know about it?" "It is a Batali restaurant!" "Oh really! Is he here?"

Edited December 21, 2006 by Nathan (log)

[Nathan]

and then you've got places like Frederick's Downtown (on my block) -- which I'll throw out a bet will close within two years.

why? cause no locals go there...and neither is there a B&T or tourist crowd as far as I can determine. Its all UES regulars from its sibling uptown. Once the novelty wears off they'll stop traveling down there to eat (except on the weekends) when they can eat at the same place a lot closer to home..

now maybe they'll figure out a way to bring in local business...but with the expanded Paris Commune and Cafe Cluny and Waverly Inne close by...

Edited December 21, 2006 by Nathan (log)

[Eatmywords]

do you think stuff like this has impact......

http://newyork.citysearch.com/roundup/40605

[Fat Guy]

probably 10% regulars.

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Hardly any restaurant can survive if only 10% of the customers on any given night are regulars. If you have to fill the dining room with 90% new people, night after night, you're in trouble. That's exactly the scenario under which so many places see their business go south after the opening few months -- that's the one time when you can actually count on 90% new people every night. That's also why restaurants value their regulars so highly -- even the ones who only come in a few times a year.

[Nathan]

FG: what percentage of customers at JG do you think are regulars? (I wasn't including expense accounters and foodies who might come in more than once in a year)

[Nathan]

EatMyWords:

Time Out and Zagat appear to have the single biggest buzz effect for garnering people who don't live in the city. After that it's probably the Times, New York magazine, Citysearch and the like.

But then some things are just bizarre. Several times I have heard comments from people (primarily in other cities) about that "great NY restaurant" -- Tao. I imagine that there is some sort of word of mouth effect as well.

For example, Batali famously doesn't hire PR firms. But he doesn't need to. Never discount the celeb effect. That seems to be very important to tourists and the B&T. (never mind that actually finding a celeb eating out in NY on the weekend is pretty darn rare -- although I did recently see a certain personage eating with someone not his wife and forty years his younger at the Spotted Pig on a Saturday evening (but it was also at least one in the morning).

[Sneakeater]

Why wouldn't you count expense accounters and foodies?

JG is weird because of its location. It's obvious that Daniel has loads and loads of regulars.

[Fat Guy]

FG: what percentage of customers at JG do you think are regulars?  (I wasn't including expense accounters and foodies who might come in more than once in a year)

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I guess I don't understand what you mean by "regulars."