Less appetite for dining out

For more than 20 years, the Pasta Shop & Ristorante has lured in Las Vegans hungry for the Italian specialties it serves out of its East Tropicana Avenue eatery.

But the Pasta Shop sees fewer local takers today for its baked rigatoni, saffron shrimp and chicken parmesan, as local businesses and consumers slash expense accounts and snap shut their wallets in response to rising unemployment and falling home prices.

David Alenik, owner of the Pasta Shop, said the past eight months have brought the restaurant a "fairly significant" downturn in the number of businesspeople -- especially professionals in real estate and construction -- bringing in clients for lunch. Local families who used to visit once or twice a week now stop by perhaps once or twice a month, he said. And the Pasta Shop's wholesale business, which serves the resort sector, is off about 15 percent, as hotel-casinos grapple with tightened consumer spending, he said.

Still, the Pasta Shop's overall sales are up about 8 percent from a year ago, thanks to mentions in the Zagat Survey of restaurants and the city's first Michelin Guide to eateries. The publicity, combined with the restaurant's proximity to the Strip, has boosted tourist traffic, and that gain has outweighed losses on the local side, Alenik said.

Numbers from the Nevada Department of Taxation show many of Alenik's competitors aren't faring so well.

Taxable sales among restaurants in Clark County have fallen three of the past 12 months, including a 10.3 percent drop in February year over year. From the start of the fiscal year on July 1 through February, taxable sales inside the county's 3,000 restaurants decreased 1.6 percent, from $4 billion a year earlier to $3.95 billion.

The state doesn't track sales on the Strip separately from sales throughout the rest of Clark County, but resort operators' first-quarter results suggest slower food-and-beverage sales inside hotel-casinos.

MGM Mirage, which operates 10 resorts on the Strip and properties in New Jersey and on the Gulf Coast, reported food-and-beverage revenue of $417.4 million in the first quarter, down 4 percent from $402.4 million in the same quarter of 2007.

Boyd Gaming Corp., which has resorts in six states, including Nevada, posted $66.9 million in food and beverage sales in the first quarter, a 2 percent drop from $68.3 million a year earlier.

Paul Hartgen, president and chief executive officer of the Nevada Restaurant Association, said he's seen both "pockets of joy and pockets of closed restaurants."

Pinpointing trends -- whether luxury restaurants hurt more than budget places, for example -- is tough, Hartgen said.

Many new restaurants remain busy, he said. And though some affordable taco eateries and fast-food options have closed, others, such as some pizza parlors, are thriving.

"It's very mixed right now," Hartgen said. "It's a cautious phase right now. Sales overall are down. Some restaurants are making less money these days, but they're figuring things out."

Sales are flat for Brad Burdsall, who owns the Egg and I on West Sahara Avenue and the Eggworks on West Flamingo Road. Burdsall, who's preparing to open a second Eggworks at Sunset Road and Eastern Avenue, said it's the first time in his nearly 11 years in the local restaurant industry that he hasn't experienced sales gains of 5 percent to 10 percent year over year.

Yet Burdsall said he's feeling the economic pinch less than many of his colleagues. With an average check below $10 per person, the Egg and I and Eggworks remain affordable for most of their customers, and it's easier to whip up a family dinner after work than it is to cook a big breakfast first thing in the morning, Burdsall said.

"Just from the few people I've spoken with, I think the dinner houses are feeling the squeeze more at this stage of the game," he said.

Burdsall's clients aren't ordering less food or visiting less often, though he said that could change if gasoline prices rise much more. He expects his industry's fortunes to improve by the end of 2009, when the local population swells with tens of thousands of employees working inside new properties on the Strip.

Consumers on Wednesday expressed mixed appetites for scaling back.

Diners interviewed outside Cozymel's on Flamingo largely said their restaurant-going habits haven't changed significantly.

Greg Darling, project manager for a local construction company, said he dines out four to five times a week -- unchanged since the economy began softening in 2007.

Noni Johnson, director of the state Board of Engineers and Land Surveyors, also continues to frequent restaurants.

Reno-based Johnson, visiting Las Vegas on business this week, still eats lunch out virtually every day.

"After I started working at 16, I realized I owed it to myself to get out and have a nice lunch each day," Johnson said.

Also, Johnson and her husband enjoy breakfast out once a weekend, and dinner out once a month. They haven't cut back, Johnson said, because they like to eat out "more than anything else."

And with the price of groceries skyrocketing, staying in and cooking a gourmet meal could cost as much as or more than going out, she added.

Nor has Vicki Nozero, a librarian at the University of Nevada, Las Vegas, reined in her restaurant spending. Nozero said she eats lunch or dinner out at least three to four times a week, because her budget hasn't required any paring. That could change if gasoline prices continue to spike, she said.

Debbie Millett, external relations manager for university libraries at UNLV, hasn't reduced trips out to eat, either. But she said she's been less likely to visit the city's pricier restaurants in the last few months. She's also skipping appetizers and desserts more often, though health concerns more than budget issues have spurred the sacrifices.

"We're still eating out as much as always, but we definitely go to less-expensive places," Millett said. "We're just reprioritizing our entertainment. "We're putting more gas in the SUV."

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.