Economy won't devour Vancouver's upscale eateries

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      You need five stars' worth of ballsiness to charge $24 for a sushi roll in all-you-can-eat-obsessed Vancouver. Especially when the canaries in Vancouver's recession coal mine—the construction workers—have started to hang up their hardhats. Especially when the 2010 Olympics threaten to rip the heart out of Vancouver's restaurant market for six months. And especially when celebrity chefs are descending on the West Side like a parachute team from Planet Wealth, saturating the market for fine dining.

      But Hidekazu Tojo, the blunt-speaking chef and owner of celebrated Japanese-cuisine landmark Tojo's Restaurant, isn't scared. After 20 years on West Broadway, his mortgage is paid off, he explained, he has a faithful clientele, and he knows he can weather the 30-percent drop in business he's seen over the past month. International customers still clamour for his $24 Pacific Northwest Roll, he said, featuring locally caught Dungeness crab, avocado, scallops, and flying fish roe, as well as his tasting menus, ranging from $55 to $110 and up.

      Others will not be as lucky, the B.C. Restaurant Hall of Fame inductee believes.

      “Smart businesspeople will wait until after the Olympics to open a restaurant,” he told the Georgia Straight in a phone interview. “Then there will be lots of restaurants for sale. Lots of bargains.”¦Honestly—don't do it now.”

      No one, it seems, is heeding his advice. Scores of new restaurants opened in 2008, including several new high-enders. New York–based celebrity chef Daniel Boulud took the reins at Lumière and db bistro moderne on December 10 (chef's menu: $135; wine pairing: $85). Former Lumière chef Marc-André Choquette presided over the opening of Voya Restaurant and Lounge on October 18 (shared roast-beef dinner: $75). And Jean-Georges Vongerichten's signature MARKET opened at the Shangri-La Hotel on January 24 (six-course dinner Market Menu: $65; compare that with dinner tasting menu at Jean Georges in New York: US$148).

      Tojo says that at the best of times, 5,000 to 7,000 Vancouverites regularly dine out at high-end restaurants. That's not enough to support a New York– or San Francisco–sized appetite for fine food.

      “I said it to Daniel and Jean-Georges,” Tojo recalled. “They say, ”˜We know, we know.'”¦Everybody's not going to survive. All new restaurants come up because of the Olympics. Only one month is super-busy. Every month we need good business.”

      Tojo isn't the only Vancouver restaurateur who feels immune to the perilous trio of the recent restaurant boom, the economic bust, and the Olympic question mark. In fact, the Straight couldn't find anyone in the industry who seemed genuinely concerned. Considering that about US$33 trillion in wealth has been wiped out in the stock markets, according to Bloomberg, you'd think businesses that receive cash for discretionary edibles would be quaking. In Vancouver, it seems, they're not. At least not yet.

      Boulud told the Straight that he has created an “elegant cocoon” at Lumière, and that Vancouverites will always find cash in their wallet for “pampering”. John Bishop, owner of Bishop's, told the Straight that “It's challenging times”¦but the restaurants that have established clientele—the clientele, they still come. Special occasions still happen, so they continue to come.”

      In the U.S., the highest-profile high-end closure has been the famed Rainbow Room Grill, in New York's Rockefeller Center. The Cipriani family, which has operated the restaurant since 1998, blamed the recession—along with a dispute with the landlord that raised their annual lease to $6 million, after arbitration, according to the New York Post.

      In Middle America, however, the recession took its first punch at midrange restaurants. In July 2008, the parent company of Irish-themed grills Bennigan's and Steak&Ale, the S&A Restaurant Group, closed 150 restaurants, according to Newsweek. In October, Bonanza and Ponderosa steak and buffet restaurants filed for Chapter 11 bankruptcy protection. They were also owned by S&A, according to the Wall Street Journal. On January 11, Ruby Tuesday's Inc. announced it will close 40 restaurants in 2009. The burger-and-steak joint closed 28 locations in 2008; it plans to close 30 more over the next few years, as leases expire, according to a company news release.

      By contrast, in Vancouver's casual scene, both Cactus Club Cafe owner Richard Jaffray and White Spot president Warren Erhart say they're not scared. Instead, they've revamped their casual chains with help from Iron Chef winner Rob Feenie, formerly of Lumière. Both Jaffray and Erhart told the Straight they don't regret going upscale, and that great food and service will see them through the hard times.

      At the B.C. Foodservice Expo on January 25 and 26, the Canadian Restaurant and Food Services Association offered seminars on hiring foreign workers, taking advantage of Olympic dollars, and management. Surviving a recession? Not on the menu.

      However, the anxiety should be in the air. On December 15, the Toronto-based consumer research firm NPD Group released a survey that said 88 percent of Canadians are planning to eat out less in 2009 than they did in 2008. If they do, it'll break a trend. Statistics Canada reports that, each year since 1997, British Columbians have spent more of their household budget on eating out. In 2007, about 25 percent of household food spending went to restaurants, or $2,106 per year. That's up from $1,273 in 1997. In addition, Central 1 Credit Union predicts B.C. residents' disposable income will drop by 1.5 percent in 2009, and won't grow again until 2011.

      On the morning of November 24, tourism operators packed the Fairmont Waterfront Hotel to hear scary words from Peter Yesawich, chairman and CEO of leisure marketing consultancy firm Ypartnership. He was a keynote speaker at the 2008 B.C. Hospitality Industry Conference & Exposition.

      “Consumer spending is slowing, and slowing significantly,” he told the quiet crowd. “But the good news is, there is life left in the marketplace. We just have to work harder.”

      In his speech on the travel industry—one of the first industries hit by the recession—Yesawich said that businesses are surviving by offering deep discounts. But some are only willing to discount so far; Dine Out Vancouver (on until February 1) has added $3 to the cost of its three-course prix fixe menus, now $18, $28, and $38, since last year.

      What will it take to show Vancouver hot spots there's a recession going on?

      Back in 2001, Peter Hall was living in San Francisco and watched the dot-com bust decimate Silicon Valley. The area went from jam-packed to ghost town overnight, said Hall, the associate director of SFU's Centre for Sustainable Community Development. He compared that era to Vancouver's current economic climate.

      “Suddenly, this thing appeared out of nowhere,” Hall told the Straight, noting that most Vancouverites haven't begun to see the recession yet. But they will. Referring to the Bay Area, Hall said, “The newer restaurants in the leading-edge, gentrifying neighbourhoods took a hit. They weren't established, and they didn't have a good client base yet. They shut down very quickly. But Chez Panisse in Berkeley is fine.”

      Chez Panisse is the 38-year-old local-cuisine pioneer, spearheaded by chef Alice Waters. On January 24, it was offering a prix fixe menu for $95.

      The recession will arrive in Vancouver soon, Hall believes, and will hit the city's employment rate and wallets with gusto. But the patrons of high-end establishments will be last on the chopping block, he noted. Workers who are approaching retirement will postpone leaving their jobs, rather than cut into their luxuries, Hall said. Those who are very comfortable, he explained, won't change their behaviour. Of the wealthy, only those who live entirely on investments will be forced to modify their spending.

      Indeed, SFU economics professor Stephen Easton told the Straight the businesses that will take a hit are those that sell things like multimillion-dollar yachts. Not the lunch business at CinCin.

      Meanwhile, the Olympics—seen by some as Vancouver's great recession saviour—could be a curse if 2010 echoes Salt Lake City's 2002 Games. In November 2008, Utah Restaurant Association president and CEO Melva Sine sent a series of e-mails to Isabelle Clements outlining the experience of local restaurants during the Games. Clements is collecting the information for go2hr, a tourism-industry association that is creating a human resources strategy for 2010, according to the e-mails Sine forwarded to the Straight.

      “People use much of their discretionary funds for tickets to events that are usually very expensive,” Sine wrote. “As a result there is not much discretionary spending for a while. It took us about six months to get people back out spending.”

      Sine noted that restaurants in Olympic venues did well; local establishments generally did not. Media personnel tend to spend their time in the media centre, she explained, and locals don't go out due to roads being blocked and traffic.

      But John Gilchrist, a long-time Calgary restaurant reviewer who covered the city's restaurant scene during the 1988 Olympics, said the opposite was true there.

      “There was an amazing afterglow,” Gilchrist told the Straight. Calgary's citizens came out for the Games, tourists swarmed the city, and several restaurants that opened for the Games are still around 21 years later.

      “But it was a transitional Games before the whole thing went hyper,” he said, noting that he paid $12 to see Olympic hockey. “Those Olympics were different, smaller. They were less paranoid about security, and very inclusive. And they were the first Olympics to make a profit.”

      What will become of Vancouver's feverish restaurant scene? Will it be cured by the recession? Broken by an oversupply of haute bistros? Or inflamed by a serendipitous turn to the Olympics?

      Tojo thinks Vancouver is about to see a Darwinian survival-of-the-fittest era for restaurants that won't touch the established high-enders. “Everybody's not going to have success,” he said. “Only a few percent of people.” Tojo also noted that a cuisine gold rush is no time to start a business. “Good reputation very slow. Bad reputation very fast.”

      Perhaps what will save the city's restaurants ultimately is that Canadians have become much cozier with debt since the last recession. According to a 2007 Vanier Institute of the Family report titled The Current State of Canadian Family Finances, spending has increased at triple the pace of income since 1990. And average household debt has mushroomed to an impressive $80,100, from just under $52,000 in 1990.

      Sadly, for those hoping the recession would slice through the infallibility of the overclass, Hall believes the tough times coming won't curtail Vancouver's horse riders, yacht buyers, and condo investors.

      “Food is a good indicator of when a recession is coming,” Hall said, “but I would look at the food banks rather than the high-end restaurants.”

      In other words, the Festivus at ritzy restaurants will continue, but it's recession brûlée for the rest of us.