A few weeks ago, Terlato Wines’ regional sales manager, Samuel Roe, had a business partner visiting and called a friend at one of New York’s most expensive rooftop restaurants to ask if his team could find a table.
He got the reservation, he said, but also with one requirement: “Make sure to spend money.”
Roe explained that executives with corporate expense accounts who used to order $200 bottles are now “showing off” and ordering $1,000 bottles. His friend didn’t want to get in trouble for bringing a less profitable party. $12,000 per night for a private room in the restaurant. Lately, it’s always been booked.
Driven by the Covid era The tax cut window that closed at the end of the year — under pressure to cement ties and reassure customers — companies are now spending a lot of money to win and attract existing and potential customers.
“The last two to three years have been tough,” said Thomas Donohoe, chief marketing officer of Cuisine Solutions, a Sterling, Va.-based food company whose partners and clients include Starbucks (SBUX), Hilton (HLT) and American Airlines (AAL).
“We want to reconnect with these people, and we need to splash, engage,” he said. The company, which operates globally, needed events that would make customers “want to fly from Singapore or Japan” to attend.
On January 26, Cuisine Solutions will host curated events with celebrity chefs in Washington, D.C., Reims, France and Bangkok to celebrate “sous vide” day, a French cooking technique the company excels at.
Donoghue declined to reveal the cost, but noted that in France, “there may be castles and Champagne caves”.
The wine and dining boom started last summer and accelerated in the fall when many Wall Street workers were asked to return to the office, said Eric Ripert, chef at New York seafood restaurant Le Bernardin. The three-star Michelin restaurant is one of the most expensive in the city.
“It’s like kids don’t want to go back to school, but then they get excited,” he said. “That’s it, but with adults. And tequila.”
Lawrence Scott, a New York-based event planner, said companies, hedge funds, and especially real estate companies “realize that recovery is still a year or so away.” “They think the only way they can stay in the industry is to have fun.”
Events are smaller, like 60 people instead of 200. “They invite [clients] who will float their boat. ”
Most of Le Bernardin’s private rooms have been booked since late September, Ripert said. At the restaurant, guests typically opt for the $298 chef’s tasting menu — $468 paired with wine. Ripert’s manager told him that business was particularly boosted by expiring tax cuts.
Known as the Enhanced Deduction, “In 2021 and 2022 only, businesses can generally deduct the full cost of business-related food and beverages purchased from restaurants. Otherwise, the limit is typically 50% of the meal cost,” IRS express.
Of course, this spending stands in stark contrast to what most consumers do when they pay for their own meals: slashing spending. Inflation and natural gas costs are at record highs, and recession fears are mounting.
Meanwhile, Food-TV celebrity chef Maneet Chauhan, who owns Indian, Chinese and U.S. restaurants in the Nashville area, said the restaurant industry is still struggling with “staffing, food costs and supply issues.”
But companies feel they have to spend money to compete and keep TonTheir relationship is optimistic, especially after years of lockdowns and Zoom meetings.
“Everything changed after Covid,” said New York publicist R. Couri Hay. “People don’t want to go out anymore, they get lazy. They start editing activities – when they do go out, they say ‘It’s great, you’re still here, you’re alive! ” ”
Companies in particular are scrambling to attract younger guests and next-generation businesses, Hay said. “They think: You have to do a grand event.”
Group meals or gatherings are rare during the pandemic. At first, charity events began to return, then weddings. Since then, bars and bar mitzvahs have popped up, according to restaurateurs and event planners across the country.
But now it’s bankers, watchmakers, real estate investors and executives launching new projects, Manufacturers, retailers and “tech brothers” also throw more expensive dinners and lavish parties.
Auto technology supplier Bill Laurie has begun inviting current and potential customers again to dinner at top restaurants in Detroit and Dearborn, Michigan, for hundreds of dollars per person. “It’s not a luxury if you do it right,” he said.
In this post-pandemic world, “people want to feel noticed,” Laurie said. Hospitality isn’t just about spending money on them, he said, it’s asking them what they think about the market or family.
Of course, there may be some businesses that have a lenient view of the IRS rules. This deduction, designed to help support restaurants during the pandemic, applies only to restaurant meals and only when members of the client company are present. Businesses cannot deduct “luxury or extravagant” meal expenses.
However, according to the IRS, “it would not be considered an extravagant or extravagant expense if it was reasonable based on the facts and circumstances.”
This definition leaves a lot of wiggle room.
“Meal expenses are not barred simply because they exceed a fixed amount,” or because the meal occurred at a luxury restaurant, hotel or resort, the IRS said.
But even in this more relaxed environment, customer expectations must be managed, Laurie said. Due to inflation, he can no longer say “order anything on the menu”.
Now he says, “Even if caviar is on the menu, caviar is not on the menu.”