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As the economic downturn bites, it’s the midrange establishments that are being hit hardest, reports Angie Wong

“If money isn’t loosened up, this sucker could go down,” declared President Bush as he watched the US$700 billion bailout package fall apart in the Cabinet Room of the White House last month. That sentiment is shared by many of Hong Kong’s restaurants and drinking establishments following the vertiginous collapse of the financial market in recent days.

There used to be a time when a trio of girls could roll into Privé and be greeted with free glasses of champagne. But since the fast-cash collapse, drinks have been slow to the pour, and girls have had to resort to paying for their own bevvies. The good old days of investment banks and generous boys have come to an end. One analyst of a now-defunct investment firm used to rack up $20,000 each month for bottle service at Privé alone, with a table reserved every weekend at the back, by the dance floor. “Good viewing platform,” he says. These days he is trying to sell his club membership at a discount.

Bankers are also trying to unload their Beijing Club memberships as the market continues its downward spiral. No longer is it considered to be a privilege to pay $12,800 to drink. But a phone call to the Beijing Club revealed that memberships are non-transferable anyway.

Restaurants aren’t faring much better. At lunchtime, the dining room of Cipriani used to be filled with CEOs and “people you see on Bloomberg,” says one of the principals of the hedge fund Ajai Partners, who calls the place his cafeteria. But these days, there are more empty tables and less bookings coming through, according to one of their chefs, who would rather not be named.

“Lunches are a bit emptier because of bankers. Normally we see more reservations. This same time last year, we were fully booked,” says executive chef Gianni Caprioli, of Isola in the IFC Mall. “People still need to eat, but they will probably be less likely to splurge on big company meals,” says Nicola Chilton, of the Four Seasons Hong Kong. “It would be looked at as kind of irresponsible right now.”

In fact, the weekend after the fall of 158-year-old investment bank Lehman Brothers and the shotgun wedding of Merrill Lynch to Bank of America, Zuma, the host of many a celebratory corporate splurge, was much quieter than usual (with the exception of a packed bar of suits drinking their blues away). Luckily, it was just reactionary, as business has picked back up since. To cope: “We just pretended that everything was going to be okay,” says executive chef Dan Siegel.

Eric Ting, general manager of Harlan’s eateries, where an elite selection of bankers have dishes named after them, had this to say: “Touch wood, business remains the same. In fact, growth is expected if this business pattern continues.” Although for the first time ever you can make a last minute booking for a table of eight at 8pm on a Friday at your pick of any Harlan establishment.
Some people we’ve talked to traded their Harlan’s H One burger for the cheap and cheerful Triple Os even before the historic fall last month. In moments of uncertainty, comfort food is king. Case in point: in the US, Campbell Soup’s sales rose 13 percent in the third quarter, a phenomenon aided partly by “strapped consumers looking for an inexpensive meal,” Campbell’s CEO Douglas Conant told Ad Age. Kellogg’s, Kraft Food, and General Mills also saw upward leaps, while Maruchan Ramen noodles sales went sky high. As the credit crunch continues to bite, more of us are dusting off our lunchboxes and re-embracing McDonald’s. Speaking of which, at the time of writing this, London's dealers were quoting the same price to insure a bond issued by McDonald's as they were for US Treasury bonds, according to the Financial Times.

And what about filling those lunchboxes? The Friday following a surge in the market after the Fed announced a plan for a toxic subprime mortgage bailout, supermarkets around financial centres were full; though carts were stocked with pasta, cans, and ground meat, rather than gelato, Wagyu steaks, and pink peppercorn. Food journalist Reggie Ho, who followed food trends during the Asian financial crisis of the 1990s, says: “It’s not the high-end restaurants that will be affected, and it won’t be the cheap restaurants either. People will always want to go to their special place for celebrations or just because they like it. Inexpensive restaurants will do well anyway. It will be the mid-range restaurants that will get hit the most. People are going to go with what has best value. They won’t be willing to experiment with newer places they don’t know or with unfamiliar cuisines.” It’s just a shame that several big concept restaurants that have been months in the making, such as Caviar Kaspia at The Landmark and premium steakhouse Dakota Prime at LKF Tower, will be opening up during the downturn.

As for the beverages industry, as the market went up and down all month, so did cold pints at the Captain’s Bar. Drinking holes around town are high fiving each other as the market tanks, because “when times are bad, people eat less and drink more, which affects the restaurants more than the bars,” says Alasdair Nicol, Time Out’s wine writer.

As Katherine Anthony of the Mandarin Oriental says: “[It’s a] good time to drown your sorrows.”