Spending on New Year's Eve parties falls in tough economy

The Times Square ball won't be the only thing dropping as we ring in 2009: Spending on New Year's Eve festivities is falling as well.

High-end indulgence was the rage in the boom years, but today's economy means tonight will be "celebrated in a much more frugal way," says Marshal Cohen, chief industry analyst at trend tracker NPD Group.

For many, apparently, that means at home. For example, the Sommet Center in Nashville canceled a New Year's Eve concert with Lynyrd Skynyrd and Trace Adkins. Reservations dropped for the shindig at the Lexington Downtown Hotel in Kentucky. "It's really scary," says Angela Matherne, director of sales and marketing. "We had 2,000 (people) last year. If we get to 1,500 this year, we'll be lucky."

In New York City, sales of $85 party tickets at Divine Bar West are less than last year's. Co-owner Shari Schneider thinks that people are staying in to save money.

Enola, Pa., resident Nancy Bohr and her husband are skipping their usual dinner/dance ($50 a ticket, plus drinks) to head to a friend's house for a potluck meal. The tickets "exceeded our price range," says Bohr, a retiree. The potluck will cost "a lot less money" and be "just as much fun."

That kind of thinking worries hospitality businesses who count on New Year's as a big moneymaker. To keep cash registers ringing in the new year, many have fought back with economy-sensitive strategies. Examples:

•Economy-related themes. Divine Bar West's ads promote "wishful thinking" and say, "Since we're all in the red, let's get Back in Black!" It will serve black-themed fare such as blackberry-infused champagne and Black Forest ham.

•Freebies. Las Vegas' famous Tao restaurant is charging $150 and up for its party hosted by Carmen Electra but will also give guests free access to the Fergie-hosted bash at sibling location Lavo after midnight. "We gave people a bit more for their money," co-owner Noah Tepperberg says.

•Scaling down. Hot eatery Cuba Libre cut its party price from $150 to $95 in Philadelphia and $115 in Atlantic City. Nixed: the open bar.

Ming Tsai, owner of Blue Ginger restaurant in Wellesley, Mass., says his patrons want to celebrate that this year is over but not be "over the top." He's offering a four-course meal for $85, down from his traditional $125 fixed-price meal that included extras such as caviar and truffles.