Smoking ban’s impact on KP establishments both good, bad

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Lori Losee, KP News

Nearly a year after the statewide smoking ban went into effect in Washington, Key Peninsula bars and restaurants are still seeing its repercussions on their bottom line. But not everyone is impacted equally.

Greg Calahan, owner of two taverns, O’Callahan’s in Key Center and another in Tacoma, said the smoking ban has impacted his two establishments in opposite ways. At O’Callahan’s, business involving nonsmokers increased in revenue by 25 percent; however, at his North End Tavern (in the Proctor Business District), business has taken a 75 percent nosedive.

“Since there are no Indian casinos near O’Callahan’s, the smoking ban hasn’t bothered us,” he said.

Calahan said the majority of his business at the North End comes from the business of pull-tabs. “Smokers gamble and therefore I could afford to provide gamblers with free alcohol and drinks, it keeps them establishment gambling,” he said. “By taking away their cigarette, they leave.”

Initiative 901, which was passed by state voters in 2005, prohibits smoking within 25 feet of doors or windows of all public places. The ban took effect Dec. 8, 2005.

Calahan, a nonsmoker himself, said he estimates his losses at his Tacoma tavern at $300,000.  “They (the state) took that revenue and threw it in the toilet,” he said.

“My tavern was very profitable until the smoking ban, and my bar is only three and a half miles from the Indian casino where all my smokers now go,” Calahan said. “I didn’t buy this place as a nonsmoking bar.”

At the New Brookside Restaurant, which opened before the ban went into effect, owners made the decision to go smoke-free before the state required it, so they haven’t seen any decrease in business.

“It should be at the discretion of owners,” said manager Shellie DeWitt. “The reason why we went smoke-free is that we have one large open dining room and no separation if we allowed smoking.”

At Lulu’s Homeport in Home, owner LuLu Smith has a different dilemma. Business has increased in the restaurant, but in the lounge, business is way down.

Smith said the lounge is really hurting by a 30 percent loss in revenue.

“It’s been wonderful in the restaurant, but we have lost a lot of business in the lounge,” she said.

The experience of the local business owners appears to be similar to those of establishments around the state. According to a state Department of Revenue press release, gross business income reported by state bars and taverns declined 3.4 percent to $122 million during the first quarter of 2006. That compares to a 4.3 percent increase in sales during the same period in 2005. However, sales at sit-down restaurants, many of which already were nonsmoking establishments, increased by 8.1 percent to $1 billion during the first quarter of 2006, compared to an 8 percent growth during the first quarter of 2005.

State officials cautioned it is too early to draw conclusions about the economic impact of the smoking ban and data for additional quarters needs to be gathered to assess the longer-term trend. They pointed out that businesses affected by smoking bans in other states have tended to “adapt and recover.”

“The volatility of the bar and tavern industry, which saw significant ups and downs prior to the ban, is a complicating factor in assessing what impact, if any, the smoking ban has had,” according to the statement.