REALITY CHECK: US CATERERS SAY DEC 31 A BUST, BUT WAGES SOAR
By Gary Rosenberger
NEW YORK (MktNews) - This Millennium is crashing hard under the weight of its own hype, but anyone willing to work that night will earn a king's ransom for whatever events remain, say caterers and party planners.
The big losers are mega-event organizers who overestimated the amount of conspicuous consumption the public could handle, and are now forced to slash ticket prices or cancel.
But caterers say the private party scene is thriving, even if people are forced to pay unheard of wages to get help for the big night.
In Manhattan, for instance, anyone with reasonable experience willing to work that night will command $200 or more an hour, about seven times the prevailing hourly wage in the catering business.
But even far away from Wall Street and Madison Avenue, wages will spike well beyond the double-time that holiday events typically bring.
One notable cancellation was for Celebration 2000 at the Javits Center, where $1,500 or so got you and 15,000 others a gourmet meal, champagne and entertainment by the likes of Sting, Aretha Franklin and tenor Andrea Bocelli.
That cancellation freed up a lot of catering help for the New Year, but hardly drove down wages.
"All that did was to take away the 10-hour guarantee whether you worked the whole 10 hours or not," said Marilyn, a professional caterer who turned down a $150 an hour job in Connecticut for one in Brooklyn that pays less but was less demanding.
She said she's normally paid between $20 and $25 an hour.
She committed herself to New Years but "most people I know are saying no," Marilyn said.
"A lot of my friends got calls from catering companies who said we need you for New Years Eve, name your price. One person I know said '$500 an hour.' The guy who offered the work said 'never mind.'"
Owners of catering companies agree that the Millennium appears to be something of a bust and, despite that, wages are spiraling.
"Both statements are true and that's not necessarily a contradiction," said Paul Neuman, owner of Neuman and Bogdonoff, a higher-end Manhattan caterer.
"When the price of labor gets ridiculously high, people say they don't want to pay for it," Neuman said.
"We had waiters tell us they're expecting $1,000 an hour -- it's absurd," he said.
"When I call someone up, the first question I hear is 'can I get $2,000-$3,000 for the night?' The second question is 'can you make it in cash?'-- which we don't do," Neuman said.
But the real message seems to be that people just don't want to work that night and can't be bought off, he said.
"The labor market collapsed under its own weight -- there aren't that many jobs out there now," he said.
But at the same time labor costs weren't dragged down because "people just figured if they weren't going to work, they'd just have a nice evening," Neuman said.
Neuman added that, depending on qualifications, catering help can get between $100 and $250 an hour -- versus about $150 for an entire night.
He said he was not particularly upset by the fact that "this Millennium is turning out to be a big bust."
"It was such a turn-off when we couldn't commit to a price range or staff when we were bidding back in August and September -- we couldn't even guarantee that we could bring it off," he said.
"There's so much pressure for that night," he said. "What do you tell someone who paid $2,000 for a waiter who just spilled something -- that he's the same guy you usually pay $150 a night?"
Neuman said when Celebration 2000 was canceled, an event he had no part in, one of its suppliers offered him 20,000 plastic cups "really cheap."
"I couldn't believe it, here were people paying $1,500 and they were going to drink champagne out of plastic cups because they don't allow glass inside the Javits Center," Neuman said. Phone calls to the Javits Center were not returned.
Neuman said his favorite catering job this New Year is for a corporation whose information technology staff has to work that night. "We're really pulling out all the stops for them -- as long as they have to work, they're getting lobster and filet of beef."
Another Manhattan caterer said his private party business is strong for this New Years, but even at $200 an hour he had to twist arms to get help.
"About a year ago, when there was this absolute pre-Millennium frenzy, we sent out a query to our staff -- and the response was not terrific," said Ken Wolfe, co-owner of Robbins Wolfe Eventeurs, a higher-end catering company based in Manhattan, the Hamptons and Locust Valley, Long Island.
"We didn't even know what plans we had for that night, but we could tell that we'd have a lot of difficulties getting people to work that night because they wanted to be with family and friends," Wolfe said.
Wolfe said when Celebration 2000 was canceled he was able to get his staff beefed up for the New Year -- but at a rate of around $200 an hour.
"That's three to three-and-a-half times the going rate for holiday events -- which are normally double time," he said. "If I didn't own this company, I'd be out there too."
Wolfe said along with labor costs, the cost of linen, china and other supplies tripled and quadrupled as everyone who could jacked up prices at the height of Millennium planning.
"There was a lot of corporate interest in the beginning, but it started dropping as the cost of the party became more prohibitive," Wolfe said.
But he added that his "social clientele" will keep him busy that night, offsetting the fall-off in his corporate business. "I say the Millennium is a bust, but it's not really a bust for us."
The social business is strong because "people decided they wanted to stay at home and not travel," he said.
A large Virginia-based caterer also complained about the havoc that wage pressures are wreaking on Millennium affairs.
"I can tell you that we're at the mercy of waiters," said Sara McGregor, president of Capitol Catering in Alexandria.
McGregor said waiters who normally command $26 to $30 an hour for holiday affairs are getting $75 an hour.
"The Millennium is a bust because it's very unaffordable," she said. "The Smithsonian was planning a three-day affair and they're scaling back like crazy."
She said that in her area the Millennium balls put on by promoters at hotels and other venues took the biggest whipping.
"They're slashing ticket prices to get people to go," she said. "I know of one promoter who is getting calls from people who say they paid $500 for tickets that are now going for $200 and they want a refund."
"I think the price-gouging hurt everyone -- they were counting on people having a ton of disposable income," she said.
McGregor said her most satisfied customers are the ones who ignored the big night and opted instead for quieter pre-Millennium parties that have been taking place since last week.
"There's just too much pressure to have the perfect party that night," she said.
Mike Aug, general manager for Event Tech in Hanover, Maryland said labor has been the most difficult part of organizing events.
"For the labor company we use, rates between the 26th of December and the 1st of January have tripled -- we got this information too late when we had already booked events and budgeted for them," said Aug, whose company provides technical support like sound systems, video, staging and lighting.
He has not suffered cancellations where others have, he said.
"We've been fortunate that all the events that we do do not fall into the category of ticketed sales," he said.
Aug's scare story involved a prestigious hotel that sold a New Years package for $850 a ticket. "That's unheard of," he said. "No one wanted to pay that much and they cancelled."
Interestingly, he noted that the stage hands union in Washington is keeping rates normal for the New Year -- keeping it at time and a half.
"People are going to grumble," Aug said. "But if they turn down the call from the union, they go to the bottom of the list."
* * * * * HAPPY HOLIDAYS FROM REALITY CHECK * * * * *
Editor's Note: Reality Check stories survey sentiment among business people and their trade associations. They are intended to complement and anticipate economic data and to provide a sounding into specific sectors of the U.S. economy. |
