Doing What They Can
Paymon Raouf, owner of Paymon’s Mediterranean Cafe & Lounge, doesn’t mince words:
"This is not a good time for restaurants."
"Big time," echoed Bob Ansara, owner of Ricardo’s of Las Vegas on West Flamingo Road. "It’s kind of been the perfect storm of anti-business economics, in that wholesale costs have been rising incessantly over the last 18 months. Couple that with the impact of fuel prices — not only on the wholesale price side of things but the pressure and stress on our customers — add minimum-wage increases and wrap that all up with the macroeconomy of Las Vegas and the country with the slowdown in tourism and the housing crisis/mortgage meltdown trickle-down/trickle-up stuff that winds up affecting the people who eat rice and beans and tacos."
Whew.
In their candor, Raouf and Ansara, who both have been in business in Las Vegas at least 20 years, stand somewhat apart from their fellow restaurateurs. Most maintain that they’re holding their own with, at worst, revenues flat when compared to this time last year. But they all have heard the stories about what’s happening to other people, citing drops of 22 percent to 25 percent — even as much as 38 percent — in the fine-dining category, and at lower levels in the casual and casual-plus dining categories.
"Everybody is affected by it," Raouf said.
John Gerarde has heard the stories as well. But at the same time Gerarde, general manager and managing partner of Maggiano’s Little Italy at the Fashion Show mall, sees a lot of positive thinking.
"Most people that I talk to feel that we’re going to get through this," Gerarde said. "They’re looking to the future, feeling confident that things are going to improve. It may not be for six months to a year, but I think most people share that optimism."
And they’re not just waiting for the perfect storm to pass. Most restaurants across the valley are coming up with new ways to draw in customers, while at the same time saving money in ways that won’t be obvious to the customer.
Raouf’s business climate is even stormier than some. Since his businesses carry a large proportion of imported foods, they’re affected not only by the factors that Ansara cited but also by the weakness of the dollar. Not long ago, Raouf was paying $39 for a five-gallon container of tahini, which is sesame-seed paste. Now, he said, the same container costs $95 — and would be $115 if he bought it only two or three containers at a time, instead of by the pallet.
To help cope, Raouf has expanded the menu at his West Sahara location, adding big plates of pasta, plus six panini sandwiches.
"These are items that are more mainstream," he said. "More people know about pastas and panini than falafel and tabbouleh."
At the same time, Raouf feels a commitment to the community, and compassion for those who have been hit even harder than he.
"We are in this bad economy with our customers," Raouf said. "You want to sometimes give back when you hear the stories from customers, that they are hit by fuel prices and unemployment and other stuff is going on."
To that end he’s also instituted a $14.95 pasta-for-two special, available from 4 to 7 p.m. Sundays through Thursdays.
"Hopefully this will be a way to help the single mother, to help our customer base that got hit by the bad economy," he said.
John Arena, co-owner of several Metro Pizza locations in the valley, said his business hasn’t dropped off, although it’s "not experiencing the kind of growth that we normally do from one year to the next." The reason, he thinks, is because Metro’s average per-person check is $11, and "for dining out, with a beverage, $11 is not exorbitant."
There also has been a big increase in Metro’s catering business, which he sees as an indication that while people are cutting back in some areas, they’re still managing the kids’ birthday parties.
But there also, Arena said, are more families looking for value. Metro’s three full-service restaurants used to host kids’ make-your-own pizza nights once a month, during which the kids’ pizza was free while the parents purchased their own. Now Metro is doing it twice a month, and participation has increased from an average of 50 to 60 kids a night to an average of 115.
"In the summertime, parents are looking for something that’s relatively inexpensive to do with their kids," Arena said.
He’s also seeing more families coming in during the period from 2:30 p.m. to 4:30 p.m. Mondays through Thursdays when pizza is half-off — a time that used to be dominated by retirees. With a wine special that offers a bottle for $12 — $3 over wholesale — a family can have a pizza and bottle of wine for about $20.
"That’s extremely popular," Arena said.
At Golden Gaming, the marketing orientation has become "a little more call-to-action," said Christopher Abraham, vice president of marketing. A current promotion offers a chance to win a mortgage paid for a year. To enter, customers need only buy a Peroni beer or hit four of a kind.
"We always have four or five different promotions going on" at the 33 PT’s Taverns and three Sierra Golds, Abraham said. From 8 to 11 p.m. Wednesdays at PT’s, he said, everything on the menu, including drinks, is 50 percent off.
"We’ve seen a little bit less of the casual diner and drinker than in ’06, when the economy was just buzzing," Abraham said. "We’re trying to target all the markets, but certainly yes, the casual diner and drinker."
Even some fine-dining restaurants are taking a two-pronged approach.
"We have not been hit as hard as we thought we would at this point," said Tom Kaplan, senior managing partner of the Wolfgang Puck Fine Dining Group. "That could change next week. It’s a choppy environment."
In response to the economy, the group’s six local restaurants — Spago and Chinois at The Forum Shops at Caesars, Postrio at the Grand Canal Shoppes, Trattoria del Lupo at Mandalay Bay, Wolfgang Puck Bar & Grill at MGM Grand and Cut at Palazzo — all are offering specials (generally involving reduced-price prix-fixe menus) to locals. The specials join the group’s ongoing Compliments of the Chef program, in which locals can get priority reservations, preferred seating and a free dessert per couple at each of the six restaurants.
The restaurants, Kaplan said, also are trimming operational costs, such as extending contracts with cleaning crews at reduced prices, being extra careful about breakage and changing some cleaning products. As was the case after Sept. 11, the group plans no layoffs, he said.
"We feel very fortunate being a nonpublic company," he said. "For a few points less in profit, we won’t cut insurance or lay people off." He said he, Puck and local managing partner David Robins are of one mind: "As long as we can pay the bills and we’re making a little money for the investors, we’re not going to do it at the expense of somebody. That just doesn’t sit right with us."
At Ricardo’s, Ansara is taking "more passive steps," such as turning off lights in rooms that aren’t in use, turning gas off to burners that aren’t in use, watching overtime and working with vendors to get the best deals. And he remains philosophical.
"It’s going to be OK," Ansara said. "I’m concerned for the industry, because I’m concerned for the small operators. It makes me sick.
"We’re going to have to keep our heads down and tails up and fly low for a while. It’s going to get better."
Contact reporter Heidi Knapp Rinella at hrinella@reviewjournal.com or 702-383-0474.
