The beat is slowing on the Sunset Strip, muffled by a less-than-festive economy.
For the first time in years, clubs in this night-life mecca on Sunset Boulevard and nearby will be ringing in 2009 on Wednesday by slashing cover charges or offering special incentives, such as open bars and free hors d’oeuvres. A night out on New Year’s Eve will still cost a premium, of course, but many club operators say they are purposely keeping a lid on prices even though they might be able to charge more.
“We need to understand that we’re not the only ones in this game, and not just for today,” said Arich Berghammer, a partner in the Viper Room in West Hollywood. “The economy is really making people more discriminating. If you’re not careful, you can screw them for one night and suffer for the future if they pay it now but then never come back.”
Berghammer said the Viper Room considered setting New Year’s Eve ticket prices around $200 but opted instead for a basic cover of $50, or $100 with drinks and other goodies included.
The less extravagant tone for New Year’s reflects the big hit that nightclubs have taken in the yearlong recession.
More than half the nation’s 50,000 or so clubs, bars and dance halls had their last call in 2008, said J.C. Diaz, chairman of the National Club Industry Assn. of America.
Most of those that closed were smaller neighborhood venues, he said, but bigger clubs are also feeling the pinch.
“Bottle service dropped as soon as the word ‘recession’ hit news wires,” Diaz said.
At $6 to $8, drinks at the famed Whisky-a-Go-Go are a relative bargain, noted general manager Tisa Mylar. But even at those prices, customers are spending less.
“They might have one, but if they feel it’s overpriced, they won’t buy two,” she said. “They don’t want to feel like they have to spend every penny they have when they just want to have a good time. But I don’t want people to drink beforehand in parking lots when they can have whiskey at the Whisky.”
Frequent clubgoers such as 28-year-old Charlotte Barry of Beverly Hills are looking for ways to economize.
Though she still goes dancing once a week, the advertising account executive will usually have her first drink at home so she won’t have to spend so much on cocktails. She arrives earlier, before bouncers start charging cover, and keeps an eye out for nights when women are admitted free of charge.
Especially on weeknights, the clubs she patronizes are looking emptier, she said. And after witnessing several rounds of layoffs at her agency, she’s not in the mood to throw money around.
“I’m cutting back just as a precaution, because the general economy may go down to where I’ll start feeling it in my paycheck,” Barry said, as she left an uncrowded Cabana Club in Hollywood around midnight one recent Friday. “People are preparing for the worst and are more cognizant of needing to save.”
Club owners and party promoters say they’ve definitely gotten the message.
Party planner Justin Saka of Go Productions LA says he has seen a drop-off in attendance at the parties his company and others stage at various Hollywood-area venues.
At least three local party promoters have shut down this fall, and others have teamed up to stay afloat, he said.
For the last three New Year’s Eves, Saka said, he promoted events that drew 2,500 people and cost at least $100 a head, not including drink prices.
But this year, “people are hurting,” so he’s expecting just 800 people at a party he’s staging at the El Rey Theatre in the Miracle Mile district. He’s charging just $75, and that includes an open bar.
“There’s more supply than demand,” he said. “There are a lot of clubs in Hollywood right now, and a lot of them are struggling.”
At least half a dozen Hollywood-area club operators say they are cutting their prices to ring in 2009. Half a dozen or so others were reluctant to use the word “discount,” preferring to describe their prices as being “in step with the times,” as one put it.
The Highlands Hollywood has reduced its basic ticket price to $40, from $50 last year. At Vanguard on Hollywood Boulevard, you can get in the door for $50 -- down from $60 last year and $100 in 2005.
Next-door neighbors Nacional and Holly’s on Wilcox Avenue in Hollywood are for the first time offering a two-for-one special on New Year’s Eve: Admission to both clubs costs $40, or just $10 more than what it cost to get into just Nacional last year.
“Around the holidays, people are on more of a tighter budget, so the pricing tier is a huge deal and can be tricky,” said Alex Orlovsky, director of marketing for Nacional.
“We wanted to take an existing promotion and beef it up. We’re using all the resources available to us.”
The Avalon nightclub on Vine Street is teaming with concert promoter Live Nation at the Palladium. People who buy tickets to an electronica show at the Palladium can buy discounted $50 tickets to the New Year’s Eve party at the Avalon, which runs from 9 p.m. to 9 a.m.
Those Avalon tickets are also cheaper if bought in advance. They were initially available online for $45, but advance tickets are now $55. That will go up to $80 to $100 at the door. The club’s management will be paying close attention to purchase patterns to determine whether prices need to be discounted more for future events, said Garret Chau, an Avalon executive.
Clubs also struggled after the Sept. 11 terrorist attacks, but the Viper Room’s Berghammer said the current downturn looks to be worse because of the competitive environment and the projected length of the recession.
For months, clubgoers have been showing up earlier and staying later to maximize the value of their cover charge instead of bouncing from club to club throughout the night, he said. Instead of splitting bottle service among four people, the cost is now shared among many more.
It’s quite a contrast from just a few years ago, Berghammer said, when high rollers thought nothing of dropping $30,000 a night on table service and clubs could get $750 for a bottle of Grey Goose vodka (which sells in stores for about $30).
“There’s some sticker shock there when you don’t give people options,” he said. “I’ve been doing this a long time in L.A., and this coming shakeout is going to be severe. I’d rather forgo a few points off the bottom line for the longer-term win, just to have people come back to us again.”