Inflated Costs Dampen Festive Mood at Hotels

New Year’s Eve is always an opportunity for hotels and restaurants to make extra bucks, and this millennium year, with all its attendant hype, should promise rich rewards. But local establishments are crying foul over the sky-high costs of everything from hiring musicians to buying Year 2000 party hats, and some question whether they will break even.

“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.

As might be expected, prices are up. New Year’s Eve revelers will pay $249.99 plus tax at Sportsmen’s Lodge, up from $150 last year, for an evening that includes a four-course dinner and a bottle of Moet Chandon champagne per couple.

Prices are also up at the Airtel Plaza Hotel and Conference Center in Van Nuys. Tickets to the 1999 New Year’s Eve party were $110; for the 2000 blowout, it will be $199.

As with Sportsmen’s Lodge, much of that increase is being blamed on music costs.

Last year, the hotel paid $5,500 for a band on New Year’s Eve. This year, the price tag is a whopping $20,000 for the services of the KRP Millennium Band.

Karla Ross, president of the organization that represents the band performing at Airtel, 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.”

Ross said many musicians are refusing the booking unless they get the desired rates.

“I’ve heard guys say, ‘I either want to be paid my price or I’ll stay home.’ ”

In part because of inflated prices, the Hilton Universal City & Towers has decided to keep the millennium simple, said food and beverage director Farid Kalantar.

The hotel’s Cafe Sierra restaurant will offer a seafood buffet, a mainstay on Thursday through Sunday evenings. But this time, there will be millennium extras, such as flaming desserts, party favors, champagne and a piano player.

The Hilton, too, will up its price. The seafood buffet is regularly $26.95 per person; for New Year’s Eve, it’ll be $50.

Kalantar said it reflects higher costs. Party favors for 40 that used to cost $19 to $24 now have a $50 price tag. New Year’s Eve hats? In the past, he said, the Hilton paid about $20 to $25 for 50 hats. This year, suppliers are asking about $60 for the same quantity, Kalantar said.

The Hilton executive looked into hiring a three-piece band for the evening, but balked at a $5,000 asking price. “They normally charge $1,500 to $2,000 at the most,” he said. Kalantar also said food suppliers have warned him that the price of items he needs, including beef and seafood, will also soon jump.

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

Holleran said Sportsmen’s Lodge does expect to make money, but he said New Year’s won’t be a major profit center. The facility makes the bulk of its money on the more than 150 bar mitzvahs and 300 weddings it holds annually, not special events such as this.

Most hotels, in fact, make their money on business travel and New Year’s is not turning out to be the bonanza that some predicted, said Pam Greacen, an associate with PKF Consulting, a Los Angeles-based hotel industry consulting firm.

“Everybody was expecting big, big business, and it’s not quite panning out,” she said. “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.’ ”

Locally, however, hotels seem to be booked--which is not unusual. Most years, there is little room at area inns because of the throngs who fly in to take part in the Rose Bowl in Pasadena on New Year’s Day.

Since early this year, the 200-room Radisson Valley Center Hotel in Sherman Oaks was fully reserved, but it recently had some cancellations and now has a few openings.

The Sportsmen’s Lodge Hotel and Beverly Garland’s Holiday Inn, both in Studio City, say they have nothing available at this time. Hilton Universal City & Towers, adjacent to New Year’s Eve shindigs at the Universal Amphitheater and Universal Studios Hollywood, is 80% booked. All are charging full retail rates.

Warner Center Marriott in Woodland Hills still has rooms available for Dec. 30 through Jan. 1, at $125 a day or $200 for two nights, as part of a special package, but there are only a few openings, according to Terry Alder, general manager.

Like hotels, restaurants are filling up. The Bistro Garden at Coldwater in Studio City sold out its second seating (a $250-per-person, five-course dinner with live music, dancing, hats, horns and noisemakers) at least a month ago.

Likewise, Saddlepeak Lodge in Calabasas, has been fully booked for both its early and late seatings for the past two months, and has a waiting list ($125 for the first seating; $200 for the second).

Other establishments, such as Posto in Sherman Oaks ($85 per person for a six-course fixed menu, plus a disc jockey) are fielding phone calls, but still have openings. “I expect to feel the full impact of New Year’s Eve after Thanksgiving,” said General Manager Santo Selvaggio.

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.”

Gonzalez said the restaurant doesn’t want to jeopardize its relationship with its customers. Nor does she think the public would stand for big price hikes. In the past, Villa Piacere has imposed a $25 nightly cover charge, with patrons paying more for what they order on the menu. This time, it will probably have to raise the cover to $40 to offset increased costs, she said.

Despite rising costs, most Valley restaurants are hosting some kind of special package that evening, and expect to attract locals who may be skittish about possible drunken drivers and Y2K computer bug failures.

“Some people are afraid and want to stay home,” said Dionisi Araklisianos, general manager of the Great Greek in Sherman Oaks. It’s booked about 45 patrons for New Year’s Eve for a three-course Mediterranean meal, plus music and dancing at $80 per person.