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WHEN CORPORATE EXECUTIVES began ordering $40 bottles of wine at Daniel, the posh Upper East Side eatery, earlier this year, Brett Traussi knew the local economy was turning sour.
Just last year, the same people were throwing lavish celebratory dinners lubricated by wine costing $ 125 a bottle.
"When someone is on a budget, alcohol is the first thing that gets cut," says Mr. Traussi, director of operations for Daniel Boulud's Dinex Group.
The slumping economy is spurring companies to rein in their travel and entertainment spending. And across the city, restaurants and hotels are noticing a significant falloff in what is traditionally a major cash cow: corporate parties and banquets.
The only good news is that things would be far worse if not for a hefty stream of business still flowing from international clients.
For hotels with large meeting facilities, the decreases of recent months are particularly worrisome because they also affect room revenues. If a property is hosting fewer parties, then fewer people are booking hotel rooms at premium corporate rates.
"There are travel...