Private Dining Can Boost Profits for Savvy Restaurateurs | Food Newsfeed
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The Absinthe Group

At Absinthe Brasserie & Bar in San Francisco, private-dining checks average $100 per person.

By Invitation Only

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Hosting groups, large parties, and events brings many advantages, not least of which is a boost in revenue.

By Amanda Baltazar June 2016

Savvy restaurateurs know the benefits of private dining, a side business that will typically boost the bottom line, enhance a brand’s reputation, and keep staff busy and happy.

“If à la carte dining is the cake, private dining is the icing and decoration,” says Steve Zagor, dean of culinary business and industry studies at the Institute of Culinary Education in New York City. “It makes a business so much more profitable. It often makes the most money after the bar and can really become another part of the business.”

Case in point: Private dining constitutes 30 percent of the revenue at Louie and Chan in lower Manhattan. And the icing on this value-add initiative: The profit margins for its catering business are 10 to 15 percent higher than the restaurant, says owner David Wiesner. The average check for private dining runs $120 to $130 per person, which is 20 to 25 percent higher than in the restaurant.

Louie and Chan’s secret to success is offering their space as a home away from home. The restaurant is located in an old tenement building, and its private-dining space is two doors down in a separate enclave called The Louie. There’s no rental charge for the space, but the restaurant does require a minimum of 10 guests.

It serves food family-style—to create that home-away-from-home feel, as well as for more practical reasons: Plated food would get cold quickly, traveling from the kitchen, along the street, and into the 400-square-foot private-dining space. And serving individual plates would require many more journeys for the wait staff. Serving food family-style also helps keep the profit margins healthy.

The private-dining room comes with a private butler (almost always the same person) and during the week the space belongs to one group of guests for the night. On the weekend, the space is booked for two seatings, at 6 p.m. and 9 p.m., but Wiesner offers the first party the option of continuing their event at a private booth within the restaurant—with a bottle of bubbly on the house.

Like at Louie and Chan, the private-dining room for Absinthe Brasserie & Bar in San Francisco—owned by The Absinthe Group—is separate from the restaurant, located two doors down the street, but connected to the restaurant at the back. However, unlike Louie and Chan, private-dining meals here are plated. Although guests don’t place orders in advance, the executive chef creates a prix fixe menu for private affairs. Absinthe’s private-dining checks average $100 per head, with prix fixe dinner menus priced $75, $85, and $95 per guest.

The important thing to remember with private dining is that it may not bring in more money than the restaurant in gross sales, but it may be more lucrative in the percentage of profits, Zagor says. “You know what you’ll be making, and it’s a very planned experience. Also, you are customizing the event so you can charge top dollar for it [that] can create a really strong percentage on your bottom line. It’s also a great way to maximize revenue over fixed costs.”

Private-dining profits should preferably be double that of à la carte dining, he says. “There’s no waste to private dining; everything is pre-budgeted and pre-planned. Also, you use [precisely] the staff you need, not more.”

In a word of caution, Zagor warns that restaurants need to be careful with budgeting for private dining. “You can’t just ‘feel’ something out, you have to cost it out precisely,” he says. 

Party-Size Affairs

Down the California coast in Costa Mesa, King’s Seafood Company offers private dining at two of its San Diego restaurants—at Water Grill and Lou & Mickey’s. These venues also offer family-style food but will allow guests the option of plated meals, says vice president of operations Mark Augarten. Plated meals are the most popular, however, since much of the business is from corporate clients and both locations are near the San Diego convention center. 

At Lou & Mickey’s, private dining constitutes about 15 percent of overall revenue, and the restaurant offers five spaces, which can also be connected to make one or more larger spaces accommodating up to 500 cocktail guests or 180 for a seated dinner. Water Grill has two spaces.

King’s Seafood prefers to focus more on complete buyouts—when a group buys out the entire restaurant or the entire upstairs of Water Grill. Each of its restaurants has three to six buyouts per year, which tend to be cocktail receptions and buffets, with passed hors d’oeuvres and stationary dishes as opposed to sit-down meals. Some of these events include action stations such as grill stations, surf and turf stations, and oyster stations featuring oyster shucking.

“Buyouts can be profitable, but you are literally giving up the sales you’d enjoy for that day,” Augarten says. “They can be lucrative, but we always have a deep discussion before doing every buyout. If we’re closed, it can lead to goodwill issues, so we wouldn’t do it on a busy day. But on a quiet Monday, we’d be super happy to accept one.”

Vandal in New York City, a new restaurant from TAO Group, also has requests for full buyouts, or it can close off its entire first floor for private events of up to 550 people. This is an entertaining change of pace for the staff, says events director Natalie Barragan. “[It’s great] being able to throw a really fun party and watching the venue turn into a big event with production add-ons, like photo booths, DJs, and interactive stations.”

However, on the downside, she says, removing and storing furniture for more space can be challenging for these events. Other operators, however, have that banquet mindset in place from the get-go. Marin Restaurant & Bar, located in the Le Méridien Chambers hotel in downtown Minneapolis, operates as a restaurant plus has 10 private-dining spaces and manages the hotel’s room service. Marin’s private-dining events can accommodate from eight to 300 people.

“When we first opened there wasn’t a plan for private dining, but now it’s driving our business so much that we have a two-person team dedicated to it,” says sales director Jay Pierce. The business is split evenly between corporate and personal events, he says—more on the corporate side during the week and more personal events, like weddings and baby showers, on weekends.

Menu Engineering

Offering too much customization is an error restaurants often make in their private dining, says Zagor. “The only way to make money is standardization—but don’t let people know you’re doing it. Tweak dishes from your regular menu slightly and you have a magically different dish with mostly the same ingredients.”

That’s basically the approach Louie and Chan adopts, as it offers three menus—priced $50, $70, and $100 per person—that are based on the restaurant’s regular menu. It also allows guests to design their own drink packages, including a full bar. 

At the two King’s Seafood restaurants, private-dining menus are also based on the restaurants’ menus—a strategy that serves to continue the restaurants’ branded images. The organizer of an event and the restaurant together create a customized menu in advance, and then on the night of the event each guest chooses a meal from the planned selection. “The customized menu may even include a personalized welcome greeting and a logo or picture,” Augarten says. “A lot of guests appreciate this because it’s not something that all venues offer.”

However, private-dining staff will bend over backward to meet the requests of those booking events, and the restaurant often outsources special needs to vendors, he says. Examples of special requests that are frequently accommodated include nitro-pops (nitro-frozen treats that create the sensation of dry ice popping in the mouth), ice sculptures, mini desserts, or gluten-free desserts. Preferably these accommodations produce a wow factor, but the real motivation is to keep customers happy. 

Additionally, the two King’s Seafood restaurants have buffet menus, which are becoming more popular because they are more affordable and interactive, Augarten says. From the operations side, buffets are a little more profitable, he says, because they require fewer front-of-house staff and are easier for back-of-house staff to execute—with chafing dishes as opposed to plated meals. But either way, private dining is a win for the restaurants, “since it’s generally more profitable based on the increased efficiency in execution,” Augarten says.

Similarly, Vandal provides a list of food options for private-dining events and creates a custom menu from the choices selected. “The chef has put together a list of our most popular, classic dishes, and the guest creates a menu from that,” says Barragan. The restaurant serves these meals family-style in order to create more social engagement and to give guests the opportunity to sample more dishes.  

At Marin, private-dining menus are preset by the event organizer with options for each course, and guests make their own selections the night of the event. “We go off of the regular menu and make adjustments if our clients are looking for something particular or have been with us for several events and are looking to change things up,” Pierce explains.

Private dining at River Roast in Chicago offers several menu options, all of which can be customized. “If guests have eaten in the restaurant, they will often opt for something to be added to the package—such as our in-house charcuterie,” says private-dining lead Darcey Gerber. “We are trying to close that gap between the restaurant and private dining. We try to mix and blend the items from the restaurant that stand out and are guests’ favorites, and we offer a lot of the same foods because in essence the restaurant and the private dining are marketing each other.” 

Profit margins are 55 percent for private dining at River Roast, and 45 percent for the restaurant. For private events such as weddings and receptions, plated meals are served, while private corporate events most often are served from food stations. River Roast re-evaluates menus each year but keeps them mostly consistent. “It’s nice to have everything down to a science. It works like clockwork, and when we do mix in seasonal items or customized items, it’s fun for the chefs,” Gerber says.

Staffing and Selling 

Restaurants differ in their approaches to their private-dining staff, and there’s no right or wrong way about it. “Private dining is a change of pace and can bring a level of excitement to your staff,” says the Institute of Culinary Education’s Zagor. “It can give them a shot of feel-good.”

At King’s Seafood Company, all hires are trained in private dining, but the restaurant group develops select employees who have a flair for it or especially enjoy it. Absinthe’s staff crosses over between the restaurant and private dining, although a couple of banquet captains are exclusive to the private-dining business. For the other staff, “it’s a nice change of pace and gives them more flexibility and structure—they know what to expect,” says director of events Lauren Holgerson. 

River Roast’s private-dining staff, from the servers and bartenders to the chefs, works solely in private dining. If needed, the restaurant staff may step in to help out, but private-dining staff doesn’t transition to restaurant service. “When you are working with a wedding that requires a slightly different style of service, it helps that the staff are familiar with the room and kitchen,” Gerber explains. Another advantage of a dedicated staff is that they can arrive early and set up with no additional training.

As with most operational decisions: If you’re going to do it, do it up really right and get the word out. At both Louie and Chan and Absinthe, that means always being dressed for success, so to speak. “Our most successful way of marketing is that we always have the space fully decked with candles, flowers, and lights dimmed—it’s the best business card we can have,” Wiesner says. 

But he’s also proactive with marketing outreach. Every month he and the restaurant’s PR agency select 10 influential people, such as concierges and editors, “and we show them what Louie and Chan is all about,” he says. The show-and-tell sale starts with a cocktail, followed by a full meal in the private-dining room, and then he gathers everyone in the lounge where he mingles with them.

Absinthe also keeps its room lit so it can be seen from the street, but since the room connects to the main restaurant, the space is used to seat guests when the restaurant is busy and no events are scheduled.

For its outreach, King’s Seafood nurtures close relationships with associations in San Diego’s Gaslamp Quarter as well as with the convention center. It also works closely with local concierges and is active in the Gaslamp Quarter’s marketing program. Beating the streets also works well for Marin. “We visit companies, condos, hotels, and apartments around the downtown area—delivering treats and private-dining information,” says Pierce. “This helps introduce us and lets people know the different private-dining options we offer.” 

He also follows up with the organizers of large parties who have eaten in the restaurant “to learn how everything went and to offer information for future parties,” he says.

Restaurants should market private dining “every which way,” says Zagor. He recommends dedicating a special place on the restaurant’s website and creating a separate Facebook page for private dining. “Mention it on the menu and in the check presenter,” he adds. “You want customers, wherever they see your business, to see the adventure of a party that can be had.”