Cocktail prices in New York have pretty reliably stayed in the $12 to $17 range for the last several years, but there will come a day, sooner than you might think, that $20 becomes the regularly accepted price for a nice New York City cocktail in a moderately elegant setting. In fact, the trail has already been blazed; now it's just a matter of everyone else catching up.
It's not as though this will happen tomorrow. Even Hakkasan, the new Chinese bar and restaurant just off Times Square that has turned Being Expensive into an art form, keeps its cocktails in the $15 to $17 range. Yet in some exclusive corners of Manhattan, you can already pay $18 (Monkey Bar, the Modern, the Lamb’s Club). This has led to a few brave owners at well-known places testing their luck with $20 drinks (Bar Masa, King Cole Bar). And at Daniel, a concoction called the Apricot Royal is $25 before tax and tip.
As bold hoteliers and restaurateurs show that people won't automatically balk at a $20 drink, it's only a matter of time before everybody else converges on that price as the new standard for a made-with-care cocktail. Bar owners are capitalists, of course, and will charge whatever the market will bear.
The only reason this hasn’t happened already is that $20 is a psychological barrier, much like $10 movie tickets were oh-so-many years ago. People see a bar menu with an average price point of $16, and a $19 drink appears expensive, but not necessarily outrageous. A $20 drink is a very different thing indeed. (And since it will be a pain for bartenders to give change and get a cash tip from customers who pay for a $20 drink with a $20 bill, expect to see a lot of $21 drinks.)
It’s not a coincidence that restaurant bars are leading the charge toward $20. They are in many ways the "diffusion line" for restaurants' main dining rooms — the way to attract people who can’t yet afford to eat there, maybe serve them a small plate or two, and build up their goodwill for when they do have the money and inclination to pay top dollar for a great meal. If a restaurant caters to the rich, its bar can cater to the merely affluent.
Could a $20 cocktail actually be worth the money? For restaurants and bars, wholesale liquor prices are far more predictable and reliable than food costs. But fresh ingredients — citrus, fruit, obscure spices for infusions — can cost them money, and the more intricate cocktails have gotten, the more reliant bars have become on those kinds of ingredients.
One way bars justify added cost to customers is showing them why a drink is worth more by making it look fantastic. Take, for instance, the Mamma Mia at Daniel. It comes inside a spherical ice cube, and it will set you back $23. And no matter how fancy a $23 drink needs to be now in order to justify the cost, as the number of bars and restaurants serving $20 cocktails increases, the sticker shock associated with such drinks will dissipate.
Greed will soon win out. My advice to you is to go out and enjoy those $14 Manhattans and martinis while you can. They won't be around much longer.