Restaurant business lights up as smokers drift outside

Study notes parallel, doesn’t credit ban with
sales increase

 

Photo by Paul Moore

Kristin Walton, Brenda Causey and Nikole Johnson smoke outside the Horseshoe Café July 25 in Bellingham. Despite being a smoker for 20 years, Walton said she voted for the smoking ban because she doesn’t want her son to have to breathe second-hand smoke. “I like coming home and not smelling like smoke for days,” she said. “My son says, ‘Mom, you still stink, but not like before.’”

Corey Masterson, a 35-year-old who has lived in Washington for 11 years and Bellingham for seven months, said he hates the fact that he smokes.

“It’s just a habit now,” Masterson said as he tried to French inhale in the face of a strong breeze outside Downtown Johnny’s. “But people don’t like it so they make laws that make us smoke outside, which is fine with me because no one should be affected by my decisions but me.”

Since December 2005, smokers, non-smokers and the restaurant and bar industry have seen big changes as a result of voter-approved Initiative 901, which banned smoking indoors in Washington state.

Masterson said it was hard to light up even before then.

“This has been where things are going,” he said. “Starting back in the late ‘90s, you could not light a smoke indoors without getting some kind of dirty look.”

As of July, 24 states and Puerto Rico have statewide smoking bans with most being adopted between 2004 and 2008. California was the quickest to act with this issue and passed its statewide smoking ban in workplaces and restaurants in 1994 and finally included bars in 1998.

But Masterson said the Washington state ban doesn’t keep him from going out.

“I’m not just going to stay home if I want to go out for a drink,” Masterson said.

In June, the Washington State Department of Revenue released numbers which suggest that after sluggish revenue growth in 2006 after the ban, bars and taverns posted a gross revenue jump of 20.3 percent in 2007.

“Their average growth rate actually was stronger in the two years after I-901 than in the years preceding the ballot initiative,” according to the department’s press release.

However, it clearly stated that its data did not conclusively link the two issues and “did not attempt to establish a statistical correlation between the smoking ban and revenues, nor investigate why revenues changed as they did,” the press release stated.

Stephen D. Smith, the state economist who compiled the numbers, did venture this guess: “Perhaps patrons are just returning to their favored places because the alternatives were not as convenient. We sometimes see this when the price of cigarettes rises due to a tax increase: The short-run dip in sales is fairly large, but over time it diminishes.”

 

 

Bars and taverns posted a 20.3 percent gross-revenue increase in 2007, a big jump after sluggish 2006 numbers, according to Washington State Department of Revenue statistics released in June. The report also stated that it “did not attempt to establish a statistical correlation between the smoking ban and revenues.” Source: Washington State Department of Revenue data released on June 10.

 

After the smoke has settled

The smoking ban affected local businesses in many different ways, with as many people singing its praises as calling for its repeal.

John Tsimouris, owner of Downtown Johnny’s, said immediately after the smoking ban took effect, he lost almost all of his business from 5 p.m. to 9 p.m.

“It has had a big impact on our happy-hour business, which was businesspeople and [young customers] that liked to come in to shoot pool and smoke cigarettes,” Tsimouris said.

Aside from this loss in business, Tsimouris said there have been benefits and drawbacks to the ban.

The main benefit, Tsimouris said, is cleaner air and an overall better smell in the club.

“Now my clothes don’t smell like cigarettes when I get home,” said Tsimouris.

Tsimouris said the main drawbacks to the ban were that his staff now has to check IDs more often as smokers go in and out and they are unable to keep track of customers once they leave the premises.

“You never know, you could have people going out to do drugs in their cars,” Tsimouris said. “You just can’t keep track of that. It’s way too hard.”

However, Tsimouris said these considerations are minor compared to the elimination of his happy-hour business.

“It still hasn’t picked up,” Tsimouris said. “I would open at 9 p.m. if I could.”

Mare Boyle, co-owner of the Village Inn Pub & Eatery, said when the ban hit, business tapered off for a while but then rebounded with new customers.

“[The ban] really helped our food business,” Boyle said. “We’ve had people coming in who wouldn’t come in before because of the smoke.”

Overall, Boyle said, the ban was a good thing for business. She said that both she and her husband are non-smokers but even their employees who smoke are enjoying the ban.

“They love it because they don’t go home reeking of smoke every night,” Boyle said.

 

Market adjustments

Anthony Anton, executive director of the Washington Restaurant Association, said although the December 2005 smoking ban prohibited smoking in Washington’s restaurants and bars and other indoor establishments, the market was shifting in that direction already.

He said 85 percent of restaurants were already non-smoking establishments and another 5 percentto 10 percent were heading in that direction.

The DOR’s numbers agree that restaurants were the least impacted with no significant dip in 2006 and a 0.5 percent revenue increase from 2006 to 2007.

Anton said the restaurant-and-bar market was moving toward no smoking anyway but by the time the ban was in place, smoking establishments had developed a clientele that was 90 percent smokers. Anton said these businesses mostly fell into the blue-collar tavern category.

“They were a small segment that was really hit hard,” Anton said. “We saw a lot of them go out of business.”

Anton said the survivors were businesses that refocused their marketing.

“Some businesses built patio sections, developed lunch business or worked on their food menus more aggressively,” Anton said.

Boyle, from the Village Inn, said with a cleaner, smoke-free environment, she and her husband have taken the opportunity to spruce up the pub.

“We’ve got more and more people coming in to eat, so it was nice to paint some walls and get some new carpet in there.” Boyle said. “Before we had to clean carpets every six weeks because it really used to stink after a while. Now we don’t have to.”

 

‘Huge boon’ for tribal gaming?

Boyle said that while her business has rebounded, she did lose some regular customers to tribal casinos, which are not affected by the smoking ban because they are subject to federal rather than state laws.

“I see people at the casino that used hang out at our place and they are not even gambling,” Boyle said. “They are just sitting at the bar having a beer because they can smoke there.”

Aaron Thomas, director of marketing for the Silver Reef Casino, said the casino has seen an increased head count over the past year or so but he does not attribute this fact to the smoking ban.

“I think a lot of people are eating and drinking out here,” Thomas said. “We have seen an increase in food and beverage sales in the restaurant specifically, which is non-smoking.”

However, Anton, from the Washington Restaurant Association, said many businesses that based their clientele around smokers lost a lot of business to tribal casinos when the ban went into effect.

“I think it was a huge boon for the tribal gaming commission,” Anton said.

Anton said the restaurant and bar business is brutal with more than 50 percent going out of business every five years.

“Those who were struggling because of the ban were probably going down due to sheer numbers anyway,” Anton said.

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