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Operations

How restaurants are trying to recoup revenue from a bleak holiday party season

Large shindigs are out, but operators are innovating with alternative holiday events to bring in some cash.
RPM cocktail class
Photo courtesy of RPM

Last year at this time, RPM Steak and RPM Italian, two brands in Lettuce Entertain You’s restaurant group, were booking six events a night as soon as the holiday party season started ramping up in the fall. Both on- and off-premise sites were booked for parties large and small, says Samantha Henry, RPM’s catering manager, including a brand-new ballroom space above RPM Seafood on the Chicago River.

November and December is the most lucrative time of year for many operators, especially those with large event spaces. But this year, the spread of COVID-19 is cutting into company Christmas parties, private social events, winter weddings and any gathering of more than 10 people in most parts of the country. Some locales are even banning outdoor dining as coronavirus cases spike. But operators aren’t giving up. Many continue to hatch plans to recoup lost revenue with innovative alternatives.

Back in April, RPM started doing virtual events and marketing them to both private and corporate customers, says Henry. “Law firms still had entertaining budgets and we brainstormed ways we could provide an experience in a warm, comfortable and fun environment,” she says. “We are now set up to do multiple virtual events per night.”

As many as 70 people have participated, with the boss footing the bill. One law firm in New Jersey is offering employees a virtual event series in lieu of a holiday party, says Henry, and corporate business has revved up from now until the new year.

While companies might have spent $150 per person at RPM steak for a holiday dinner and many thousands for a large Christmas party, the virtual events have a lower ticket price—about $95 per person—and a lower customer count. “It pales in comparison to what we did in 2019, but it’s an additional revenue stream and better than the alternative,” says Henry.

Lettuce Entertain You has also winterized its patios and is booking some outdoor events. In addition, smaller celebrations with family members or friends in the same “COVID bubble” are happening where allowed. Fogo de Chao, the Brazilian steakhouse chain, is counting on generating similar holiday business.

With the absence of company parties, “our sales team is marketing to families who want to celebrate the holidays together in a smaller group,” says CEO Barry McGowan. “Plus, we added festive tent dining to several locations.”

Fogo

On Nov. 1. Fogo de Chao launched a “Journey Back to Joy” initiative to engage team members and stimulate excitement for the holidays. At its Rosemont, Ill., restaurant, one of the locations where a large outdoor tent has been set up, the campaign motivated employees to bring in their own decorations and transform the tent into a winter wonderland, says McGowan.

Employees are also encouraged to lead management to people in need, so personal friends and families do not go hungry over the holidays. “We’re continuing to deliver free meals to vulnerable people through our partnership with No Kid Hungry as well,” says McGowan.

He’s also optimistic about boosting the check average with smaller family get-togethers and social dinners. “We noticed that people are indulging like never before, ordering higher-end items,” says McGowan. “Pre-COVID, we might have seen 300 Wagyu steak orders per week, while recently, those increased to 1,600.”

Nevertheless, he doesn’t expect Fogo de Chao to totally make up the falloff in business from 2019 to 2020. “Q4 is always our biggest quarter of the year, with large group events accounting for 25% of sales,” McGowan says, “but I think we’ll come through better than expected.”

Villon, a restaurant in the San Francisco Proper hotel, usually hosts two to three events per week during the holiday season. While these bookings didn’t come through this year, management is actively trying to get larger groups to hold multiple events over time instead of planning one huge party. But many companies are struggling to shorten their lists and have decided to hold back until Q1 2021, says Mario Bevilacqua von Gunderrode, GM of San Francisco Proper.

Patio

To try to make up for lost corporate party business, Villon has opened 40 extra seats on its new Villon Patio, added an afternoon tea program and debuted a robust selection of pastries for takeout. “We’veintroduced an incredible assortment of to-go cakes, DIY cookies and pastries from our Pastry Chef, Sohrob Esmaili, winner of a Food Network baking championship,” says Gunderrode. “Additionally, we have brought back our delightful afternoon tea program that guests can enjoy for $45 per person at our winter garden, the Villon Patio.”

One Market Restaurant, an independent, seasonally-driven concept in San Francisco, estimates that it will lose over $1 million in revenue this holiday season, based on last year’s figures, says Lorenzo Bouchard, partner and GM. Typically, all the private-dining spaces are booked well in advance for both business and social events, he adds.

Over the past months, One Market has created a program of “chefinars” and virtual wine tasting tastings and curated a small takeout menu. “We had solid success but couldn’t rely on such a limited offering,” says Bouchard. Currently, indoor dining is prohibited in San Francisco and One Market has no outdoor patio.

charcuterie

But the fine-dining restaurant came up with another option—Mark ‘n Mike’s NY Style Deli—a pop-up that was an immediate hit out of the gate, says Bouchard. The pop-up occupies space within One Market and the overstuffed sandwiches, smoked meats by the pound and other deli must-haves “are earning the concept widespread media attention and wonderful feedback from guests,” he reports. “So much so that we have extended Mark ‘n Mike’s indefinitely.”

 

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