Courting the corporate crowd: businesses are rewarding their employees with high-end meals while enterprising restaurateurs compete for their dining dollars

Nation's Restaurant News,  Jan 29, 2007  by Lisa Amand

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At his three-month-old steakhouse in Manhattan's Time Warner Center, chef Michael Lomonaco's bait for luring corporate diners is to make them feel comfy.

"Porter House New York focuses on the guest, their comfort, their experience," he says. "We try to create an atmosphere of hospitality. The guests set the tone. We're in the business of making them happy."

The price tag for a porterhouse steak for two is $82, so an expense account helps to digest the restaurant's $67 per-person check average.

When it comes to business dining, location is a deal maker. With an address in midtown Manhattan, Porter House New York draws diners from brokerages, law firms and media companies, as do such neighboring expense account magnets as chef Thomas Keller's bustling Bouchon and pricey Per Se, and the high-end restaurants Masa and Cafe Gray.

In the years that he has cooked at New York restaurants, Lomonaco has seen the percentage of legally allowable deductions for business dining decrease and such spending plummet in the aftermath of the Sept. 11, 2001, terror attacks.

Still, "the restaurant industry always manages to recover," he says, adding that New York "certainly had a good year in 2006."

Tim Zagat, co-founder of Zagat Survey, agrees: "Right now the restaurant industry is having the best year in history; 2006 was a phenomenal year for restaurants."

But the dining guide publisher also warns, "At the first sign of a real economic downturn, you'll see companies cutting back." For now, however, Zagat believes that 2007 will not be any different from last year in terms expense account dining. He doesn't see the slightest sign of the restaurant industry slowing down, and he points to areas in New York, such as 10th Avenue just north of the Meatpacking District, that have experienced numerous restaurant openings and a huge expansion of seating capacity.

"This is a time of great generosity in corporate America," Zagat says, pointing out that a basic part of doing business is rewarding employees when they have to work late by buying them a good meal.

On average, 16 percent of the meals purchased by the New York Zagat guide's citizen surveyors were for business, the same percentage as in San Francisco. In Los Angeles that number was 19 percent.

American Express officials, without divulging specifics, confirm that restaurant spending by corporate clients rose substantially last year, though not as much as general spending across all travel and entertainment categories. American Express cites statistics from its 2006 Global Business Travel Forecast that show food and beverage spending for business meals having grown exponentially, including average increases of 8 percent from 2004 to 2005 and 12 percent from 2005 to 2006. Those spikes also reflect increased charges for gratuities and service fees, which totaled 22 percent of the tab in 2006, up from 18 percent the year before.

According to Zagat data, the cost of restaurant meals increased an overall 5 percent in 2006, while checks at expensive restaurants rose 15 percent.

The sophisticated seafood destination Le Bernardin continues to be a top choice for business lunches among Zagat's surveyors, and chef Eric Ripert believes the restaurant's attraction to the corporate crowd is because it's in a neighborhood "where business is done," near Rockefeller Center, and because "our cooking is always evolving."

Regardless of the direction taken by the economy, Ripert does not envision changing his quality standards or his menu's dedication to seafood delicacies. "We are a luxury product," says the chef, whose prix-fixe lunch carries a $57 tab. "We don't bargain."

New York's Four Seasons remains a see-and-be-seen destination for expense account diners. At lunch, its Grill Room's clientele of credit card-wielding movers and shakers appears unfazed by the $55 Japanese Kobe beef burger or the $56 Dover sole. But owner Julian Niccolini believes dinner in the adjacent Pool Room is where business transactions really occur.

Most evenings, 50 percent of the Four Seasons' customers are dining for business purposes, Niccolini estimates. The big spenders might choose between Mediterranean branzino, $42; day-boat scallops, $38; or a $125 Kobe rib-eye.

Regardless of the economy's health, Niccolini says, he will not lower prices at his restaurant since costs of labor and food will continue to increase. "If you lower prices, you become an airline," he says, "and look what happened to the airlines."

Niccolini says business is good at the moment. "I think everyone is spending money," he says. "Major corporations have to make sure their employees go out to great restaurants. When you go out, you have to impress people."

In San Francisco, Michael Buich is the third-generation family owner of the legendary Tadich Grill, a seafood-specialty restaurant whose history dates back to 1849. Buich believes that his professional waitstaff helps to draw the corporate crowd. Tadich Grill "has a business feel to it," he says. "You have a no-nonsense waiter. He's busy, out of your way and giving you the privacy you need."