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  • Nick Lander
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  • Nick Lander
8 Nov 2008

This article was also published in the Financial Times.

Private dining rooms within restaurants have always been popular even if something of a contradiction in that restaurants are ostensibly public, egalitarian places which people visit to see and to be seen.

But no restaurateur would open today without delineating a specific area as one or more private dining rooms, the number depending principally on location, and which can most usefully seat 10-20 in comfort. In a new building, the architect or designer will be instructed to ensure that the space can be as flexible as possible to accommodate private groups. The most striking example of this is the Lan Club in Beijing, where a Phillipe Starck design ensures every table – from a two to one seating 16 – can be curtained off.

These private spaces answer very different customer needs: to celebrate, to impress, to inform and, even in today’s market, the need to spread the message and to entertain but to do so in a much less conspicuous arena.

For the restaurateur, private rooms can be highly profitable, as Silvano Giraldin, the former maitre d’ of Le Gavroche in Mayfair, explained, “The customer has invariably chosen a set menu, which helps with the food costs. You know precisely how many staff you are going to need and that is covered by the service charge. These customers tend to drink good wine and of course payment is not a problem as the restaurant will have already taken some form of deposit to secure the room.” The private rooms above Le Gavroche were so profitable, Giraldin continued, that when they lost the right to manage them they had no alternative but to open on Saturday evenings to make up for the lost revenue.

To gauge the current demand for private rooms and how customers can take best advantage of them, I spoke to half a dozen restaurateurs in London and New York with a varied set of private rooms at their disposal.

The unanimous response was that these rooms have been extremely popular and profitable, often contributing to the significant amount of modern art on the walls. There has, however, been a fundamental and long overdue change in how these rooms are charged for.

Out has gone the room hire charge (as antediluvian and unfriendly as the cover charge on a menu, in my opinion) and the common practice now is to charge a minimum hire for the room. This is the amount charged even if the total of the food, drink consumed plus the service charge added to both comes to less than this agreed minimum although today restaurateurs do seem to be setting realistic figures. The River Café in west London has introduced a private dining room for 18 as part of its redesign with a minimum charge of £500 at lunch and £1,000 at dinner, reasonable indeed in view of their robust menu pricing.

But while private rooms can become both useful and profitable, they do take much longer to become established than the restaurant they are part of. Most sensitive restaurateurs and chefs will not turn their attention to marketing their private rooms until the kitchen has found its feet with the main restaurant and there is a general air of confidence that is invariably lacking when a restaurant opens.

There are other stumbling blocks, too. Private rooms do not benefit from the fillip a new restaurant receives from a favourable review. Moreover, those who regularly organise private lunches and dinners usually have their favourites and are loath to move. While those looking to organise product launches will invariably seek out the private room of the newest restaurant, winning corporate clients away from the private rooms they feel comfortable in is always a challenge.

That was certainly the view of my colleague, Rowley Leigh, who converted the former antique shop next to his old restaurant, Kensington Place, into a very popular private dining room that had the added benefit of being visible from the street and now has specifically built one into Le Café Anglais. His sentiments were echoed by Sam Hart at Quo Vadis in Soho, who, now that he believes his kitchen can cope with the extra business, has turned his attention to marketing their two private rooms that seat 12 and 24 with a minimum spend of £1,000 and £1,500 respectively.

Hart had another interesting insight into why these rooms can be profitable. “When we fill them both we can take the total number we serve in an evening from 100 to 136 with little marginal cost. There is no way we could seat or serve the same number of customers on tables of two or four in the restaurant. It can be great business.”

But what contributes to the success of a private room, perhaps more even than location, food or the cost, is the professionalism of the person dedicated to marketing it and ensuring that for the organiser the meal lives up to expectations.

Unusually in a restaurant that normally relies on a team effort, this is a specific job and in talking to Natalie Hadley at Hibiscus in London’s West End and Jeffrey Katz at Del Posto in West Chelsea, New York, it was impossible not to pick up on the enthusiasm each has for this role. Under Hadley, the 18-seater private room (no minimum spend and no room hire but £75 for three courses) now has a 60% occupancy during the week, only a year after the restaurant opened.

In the much larger Del Posto, where a flexible layout means Katz can accommodate parties of 10 to 350, he reported that private dining generated US$5 million in turnover last year (a quarter of total revenue) and he is confident that he can exceed this figure this year. At the moment, however, like many of his contemporaries, he is working hard to replace the corporate events that are quickly being cancelled with more social occasions.

One venue that is managing to fill its private room with a steady stream of corporate and social events is Vinoteca in Smithfield Market. 18 months after opening, its partners, Brett Woonton, Charlie Young and Elena Ares, spent £80,000 to dig out the basement that created a private room for 30 but crucially, Woonton, explained, “housed its own kitchen and chef so that it seems very much part of the restaurant". Its location close to the City, good food and wine at reasonable prices (£30 for a three course dinner) mean that the room has significantly exceeded Woonton’s forecast but its presence has also meant that when empty it can be used for their regular wine tastings.

In fact, one of the most unusual facts to emerge from my research is that as those responsible for selling these private rooms universally acknowledge that 2009 will be much more difficult than this year has been, many are planning to use these separate areas to market the restaurant itself.

Will Guidara, at Eleven Madison Park, New York, has already noticed customers booking later, often for smaller groups than last year, choosing their menus and wines with greater care and invariably requesting an outline estimate of the total once it has been confirmed. And, on occasion, citing the economy as a way of negotiating the price. But he too is looking to host more wine dinners and tastings to keep his private rooms busy.