SF Restaurants Stand to Lose Hundreds of Millions Without Tech Conferences

“It was going to be a banner year,” says Anna Weinberg, managing partner of the Cavalier. She’s referring to big tech events that bring big tech money into the SoMa neighborhood of San Francisco. Last year, the city closed out a decade of record-breaking visitor numbers, culminating in 10 billion dollars spent by visitors in 2019, SF Travel, the organization responsible for marketing SF to tourists, reports. Even though Oracle decided to move its OpenWorld conference to Las Vegas last year, there was still a sizable lineup of conferences and conventions in SF in 2020.

Until, of course, it wasn’t. When coronavirus shut down the city, conferences moved to the cloud. Business trips got canceled. Hotels stood empty. Restaurant reservation lines went silent. And millions of dollars vanished into the virtual ether. With tech employees working from home, maybe forever, will that money come back? Only time will tell.

In the meantime, SoMa has been hit hard. So far, 28 groups have cancelled conventions at Moscone Center this year, to the tune of more than 300,000 attendees and 500 million dollars in spending, according to SF Travel. That includes Google Cloud Next (40,000 visitors) and IBM (25,000 visitors). But above and beyond them all — Dreamforce. Salesforce’s “trailblazing” and “visionary” hometown conference pulls in 170,000 attendees. Last year, Barack Obama spoke and Fleetwood Mac performed. SF Travel estimates that those four days alone would have poured 176 million dollars into nearby hotels, restaurants, bars, and ground transportation this year.

The Sentinel

“For everyone in the cluster around Moscone Center, Dreamforce was the most profitable week of the year,” says Dennis Leary, owner of the Sentinel and House of Shields. Both are immediately across the street from the Palace Hotel, which is typically packed with Dreamforce attendees. Leary is an intriguing character in the restaurant scene in downtown SF: A former fine dining chef, he’s into hole-in-the-wall sandwich shops and historic bars with grit and patina, and he owns various establishments across SoMa and the Financial District. The Sentinel is arguably the best known, with a long line of dudes in hoodies waiting it out every weekday for meaty sandwiches. (“But I love those dudes,” Leary defends.) His team watches the line, and “You can tell if there’s a conference in town, because they start showing up with lanyards and ID tags. That’s how you know it’s going to be a busy week.”

“We made fucking bank,” says Mourad Lahlou, chef and owner of the eponymous Michelin-starred restaurant just down the street from Moscone Center. “It was the most lucrative week of the year. We were guaranteed to make at least half a million in revenue, up to $800,000, depending on the year.” Lahlou describes how companies would book buyouts up to a year in advance, paying up to $150,000 per day. Even if they only had 30 or 40 people, if there was a famous CEO and security involved, they would take over the entire space, all 8,000 square feet, including the main dining room, the second dining room upstairs, and two private rooms. Mourad would roll out breakfast, lunch, dinner, and happy hours. Employees showed a company ID at the door and got any food or drink their hearts desired.

The Cavalier

The Cavalier is a bar-hop south on 5th and Mission, at the foot of Hotel Zetta with 160 rooms right upstairs. “It was all hands on deck,” Weinberg describes. “But you want to know what that week was really like? 700 guys wearing the exact same backpack, walking through the door, and asking, ‘Can I check my bag?’”

“But they were drinking more than you could imagine,” adds James Nicholas, managing partner, “God love them.” The bar covered all meals from coffee to cocktails, sometimes open from 7 a.m. to 3 a.m., only closing for a few hours. Weinberg and Nicholas estimate that in conference business alone, they’ve lost a million and a half dollars this year. “Let me put it this way,” says Weinberg. “It’s the difference between the black and the red.”

SoMa might have been one of the first neighborhoods to feel the economic ripples of the pandemic, as the big tech companies preempted local government, sending employees to work from home. Historically a warehouse district, it’s never had a cozy neighborhood feel, and without daytime workers, it empties out fast. “This is not a neighborhood where everyone is home,” says Weinberg. “It’s like, board up the windows, hide the booze.” Lahlou, for his part, worries that his regulars, some of whom lived in penthouse suites in high rises, have now fled to second homes in the country. “I saw a coyote,” the fine-dining chef swears. “The neighborhood feels dead. It has no pulse. It’s like the apocalypse.”

California is reopening dining rooms on a county by county basis, so there’s still no set date for the city of San Francisco. But Dreamforce wasn’t scheduled until the fall, and it’s already off the books. Many tech companies, like Google and Facebook, are encouraging employees to work from home through the end of the year. Or in the case of Twitter, they’re free to work from home forever. Without knowing how many employees will return to a traditional office setting, it’s hard to fathom the impact on the restaurants and bars that surround and serve these tech titans downtown.

“Losing Dreamforce is dire for the industry … but we remain hopeful that we’ll be able to survive in the post-apocalyptic landscape,” Leary contends. “After all, I opened the Sentinel in the teeth of the last recession. House of Shields has endured two world wars, the ’89 earthquake, and even the foie gras ban. We’ll endure this as well.”