Hotels, Nightclubs Face High Costs for New Year’s Bashes

While New Year’s Eve is usually lucrative for hotels and restaurants, some this year wonder if they will even break even, as the costs of everything from musicians to Year 2000 party hats soar.

“We’ve spent 10 times more than we ever have before,” said Pat Holleran, general manager of the Sportsmen’s Lodge in Studio City.

The big expense is entertainment. The hotel paid $50,000 to hire the Nelson Riddle Orchestra and singer Harry Connick Sr., Holleran said.

“Typically, I’m used to paying double the price for entertainment New Year’s versus a normal night, but because of the millennium the asking price is four to five times normal,” he said.

Last year, the Airtel Plaza Hotel and Conference Center in Van Nuys paid $5,500 for a band on New Year’s Eve. This year, the price tag is $20,000 for the services of the KRP Millennium Band.

Karla Ross, president of the organization that represents the band, said musicians have quadrupled their prices for this New Year’s Eve.

“The feeling among musicians is that they are underpaid the rest of the year,” Ross said. “They feel this is a once-in-a-lifetime opportunity to make extra money.”

At the Hilton Universal City & Towers, the food and beverage director is wondering if he’ll be in the red on Jan. 1.

That hotel has decided to keep the millennium simple, said director Farid Kalantar. But even the price of simplicity has climbed. For example, he said, the Hilton paid about $20 to $25 for 50 party hats in the past. This year, suppliers are asking about $60 for the same quantity.

Kalantar also said food suppliers have warned him that the price of items he needs, including beef and seafood, will soon jump.

“I’m looking at this and I’m thinking, ‘Am I charging enough even to break even?’ ” he said.

Pam Greacen, an associate with PKF Consulting, a Los Angeles-based hotel industry consulting firm, said, “Everybody was expecting big, big business, and it’s not quite panning out. Prices are coming down. A lot of people who were thinking of taking a vacation are saying, ‘I can wait two days and pay one-third the price.’ ”

Dana Gonzalez, special events manager with the restaurant Villa Piacere, has been holding back on final New Year’s Eve plans for the 200-seat Woodland Hills restaurant because of similar concerns. In the past on New Year’s Eve, she could hire a disc jockey for $800 to $1,000 for the evening, but this year, asking prices range from $2,000 to $3,000.

“They say it’s the millennium and everyone is upping it,” Gonzalez said. “But it’s just really gouging.”