At Mel's Drive-In, the iconic '50s-themed eatery adjacent to the Hollywood History Museum, waiters and busboys were laid off when business dropped suddenly last winter.
"It used to be a madhouse at night with lines out the door," said restaurant manager Gannon Grace. "Now it's like this," he said, motioning to a half-empty diner.
Even foreign tourists, who make up about 30% of Hollywood's visitors, are cutting back. Jenny and Bob Minns, a retired couple from Norfolk, England, took a tour bus across the U.S., ending in Hollywood. To save money, they planned to skip expensive eateries and pass over the bus tours of the celebrity homes.
"I can see them better on the telly," Bob Minns said.
The penny-pinching has resulted in more aggressive tactics by Hollywood tour bus companies, which solicit tourists on Hollywood Boulevard, said Shellee-Ann Kellee, an actress and singer who also runs All Star Showbiz Tours near Grauman's Chinese Theatre.
But sometimes tourists try to save a buck by haggling with bus tour operators for lower fares. Kellee has been forced to oblige, sometimes cutting her fare of $38 almost in half.
"They are always trying to get you to go down a little further," she said.
Some Hollywood businesses have responded with price cuts and discounts. The Hollywood Wax Museum, the Guinness World of Records Museum and Ripley's Believe It or Not have teamed up this year to offer a $26.95 pass that gives buyers access to all three places. Also, Starline Tours now offers $5 discounts to tourists who buy tickets online.
And now Hollywood is waiting for a happy ending. Its merchants are betting this summer season will draw visitors back, particularly locals who will stay closer to home to save money.
Business owners also hope several new developments will spark a buzz in Hollywood, including a new W Hollywood hotel opening this fall near Hollywood Boulevard and Vine Street. Next year, a 500-seat Hard Rock Cafe is scheduled to open at the Hollywood and Highland complex, adding yet another tourist magnet and hip music venue to the busy intersection.
Later this month, the refurbished Vine Theater, near Hollywood and Vine, will open a new Laserium light show aimed at families and tourists. And in 2011, Cirque du Soleil, the acrobatic circus show, is scheduled to move to the Kodak Theatre.
