Smoke ban has little impact on food, beverage
Editor's note: Because of the realities of deadlines, production, printing and mailing schedules, we were only able to look at approximately the first two weeks of business under the now universal indoor smoking ban. Grappling with business revenue impacts is surely a moving target and may have moved again by the time readers receive this issue.
Analysis By Cole Boehler
In interviews conducted with video gaming machine manufacturers, route operators and location operators during the week of Oct. 15-22, a picture of the impacts of the Oct. 1 imposition of a smoking ban in taverns and casinos began to emerge:
• Gaming departments in most of these businesses suffered some impacts, from significant to substantial, though that was not universal.
• Food, beverage and entertainment impacts were also varied, with some businesses reporting improvements, some were flat and others said they were down.
• Generally, the businesses worst affected were in urban areas and heavily reliant on gaming entertainment for their income.
• Generally, the businesses least affected were more traditional taverns with full beverage, food and entertainment offerings located more rurally where more customer loyalty is the norm and where alternative venue options are fewer.
• Compliance seems almost universal. Tavern owners still largely believe it is an infringement of business owner prerogatives, but have always striven to operate within the law in this will be no different. The Montana Tavern Times has only been told of one location that was abridging the law, but that may have ended by now, as well.
Most, too, said it was hard to get a handle on how much weight to attribute to several business factors at play: early October being a typically slow "shoulder season" anyway, a generally sluggish economy with rising unemployment and decreasing discretionary income, an unseasonable cold snap that gripped the state for almost a week, flu epidemics in the headlines and the full enforcement of the smoking ban.
But almost all agreed the smoking ban had some impact on their businesses to one degree or another, in one way or another.
In the northwest corner of the state, Jeff Windorski, proprietor of the Cattlemen's in Kalispell, reported mixed results for the first three weeks of October. He said the bar-side of the business was holding its own on the traditional Thursday-Saturday busy nights, but that typically slow nights appeared to be even slower. Overall, though, he said he thought the beverage department was "about even with last year."
The Kalispell area has been the hardest hit in Montana by the recession.
Windorski said it appeared that gaming machine play was down significantly, by 10-15 percent compared to the same time last year.
Cattlemen's has always been a popular hangout for pool and darts enthusiasts, with numerous tables and boards. Pool and darts leagues starting up soon, Windorski said, would hopefully generate the same steady revenue stream as in years past.
The Cattlemen's also serves a light menu of fried foods, sandwiches and burgers. Windorski said food sales might be up marginally, but he said he also might now start to more aggressively develop that department. Since his establishment is now smoke-free as of Oct. 1, he can cater more to diners, especially families.
Ironically, Windorski noted, the smoke ban may hurt restaurants that have mostly been smoke-free since 2005 or earlier, as taverns now ramp up foodservice operations, and customers who shunned smoke try new pub eating venues.
Windorski said he had some landscaping shrubbery and plantings out front that he removed and replaced with a cement slab that is under an overhang, something he intended to do before the smoking ban anyway. He added benches and ashtrays for smokers.
An unanticipated consequence of forcing smoking patrons outdoors, Windorski said, is now he feels compelled, on big nights such as when a DJ is in-house, to have his security door personnel monitor what has become his "outdoor crowd."
He said some customers have grumbled and said they wouldn't be back, "others are just dealing with it."
Meanwhile at the extreme other end of the state, Pat Knaff, partner and manager of the Waterhole #3 in Fairview, where the eastern state line runs literally through the town, said his relatively unique geographical setting has helped keep his business strong, regardless of all the other factors.
Fairview sits over a rich formation of the Williston Basin oil field, and so the economy has been strong, perhaps not so much from oilfield employment as much as from royalty checks going to local mineral owners.
At the time of the Oct. 22 interview, Knaff reported a record sugar beet crop was mired in muddy, icy fields in the surrounding Lower Yellowstone Valley. Sugar beets and sugar refining, as well as other good cash crops in the highly productive valley also prop up the economy.
Most significantly for Knaff and the Waterhole, it's proximity to North Dakota with its almost exclusively reservation-only gambling, assures a large reservoir of potential customers, especially for the video gaming not available close-by across the border.
The Waterhole operates an adjacent casino and Knaff said it seemed to be "holding pretty even."
As far as the beverage department goes, Knaff said "it might be down a little bit" but that "so far, there's no real problem."
He, too, added a cement pad, a few tables and chairs and ashtrays out back for customers. He said the outdoor area is uncovered but that could change by next winter. He said he has been assured by the city there was no open container violation if customers were on his property.
"We've lost a few customers, but we're seeing ones we haven't seen before, too," he said.
Knaff admits to being a smoker, himself, but said popping out the back door for a quick smoke isn't a big deal. He said he had to talk to his smoking staff (five of 13 smoke) before the ban, letting them know smoke breaks were fine, keep them to five minutes and please don't abuse them. He also said he needs to make sure the casino attendant and bartender don't take a break at the same time. "We're all doing fine," he said of the new arrangements.
He's also a Harley Davidson enthusiast and deigns helmets. "It's just one of those adult choice issues," he said, "just like seat belts and smoking should be."
"The smoking ban hasn't really impacted us," is how Knaff characterized the new environment, then he expressed his satisfaction that, as far as he knew, all competitors and area taverns were fully in compliance with the ban. "We could all see it coming."
"We're Eastern Montanans," he said with a laugh, "we can adapt to anything."
Back to west in the beautiful Swan Valley, Kaye Lockwood keeps books and runs the business side of the operation at The Coop at Seeley Lake. This going concern has a hopping casino and bar and a restaurant renowned for it's fried chicken.
Lockwood said when summer tourists and residents depart, there is a natural lull before hunting season cranks up. "This time of year it's slow, but we get a real rush out of hunting season," she says.
She said the facility already had a concrete outdoor customer area under an overhang, so they only added some tables, chairs and ashtrays.
"The smoking ban hasn't impacted us," she said, acknowledging that the separate restaurant/dining area has been smoke-free for years. The bar and casino allowed smoking until Oct. 1.
Lockwood also acknowledged that ownership and management keep a very close eye on business operations and finances and, to that end, have been growing the enterprise every year since it was acquired from Gene Herndon a few years ago.
She also acknowledged that in this tourist area sales in any and all departments are subject to anomalous swings based on weather, forest fires, changes in the competitive environment and other unpredictables. However, she said for Oct. food sales were up 4 percent, bar sales were up 3 percent and gaming was up "nicely," though she wouldn't specify an exact figure.
"Our performance has more to do with our unique area than anything else. I hear they're hurting over in Missoula," she said. "We were worried ... the economy ... very concerned. But we have very loyal customers. We've always catered to the locals; the tourists are the topping."
Across the Bob Marshall Wilderness from Seeley Lake is Augusta, tucked under the towering Rocky Mountain Front. And that's where you'll find the rustic Buckhorn Bar and its famous hamburgers.
Frank Delwo, the second generation to run the establishment, said the place, despite offering food and seated dining for years, just went smoke free Oct. 1. He said gaming machine income is down, "But everyone expected that. The restaurant and bar haven't taken a big hit," he said.
"We're in the middle of cattle shipping season and hunting season hasn't started. We haven't really noticed it but we might later this winter.
"We've haven't had many customer complaints; they've been pretty good. But a lot of our good customers are smokers," he continued. "The ones who are really complaining are the staff, but most have adjusted.
"I like it (the smoke ban). My kids and grandkids are in here. We all had a long time to get ready."
Bob Dompier at the Holiday Inn in Great Falls, says things are steady there, too.
"I'm told some other places around town are down, so steady is good," he said.
The facility has 168 rooms so food, beverage and gaming revenues may be more dependent on occupancy rates than any other factor, Dompier said, and occupancy rates have been pretty good, considering the general economy.
The Holiday Inn has been entirely smoke-free since Oct. I, he said, not even offering smoking rooms anymore, and including the bar and casino. "We're proud to be 100 percent smoke-free," he said.
He said before the switch, they carefully surveyed customers to gauge the potential reaction and fallout.
He said since Oct. 1 the beverage department is up and feels this is pulling the gaming department up with it. Both are up 7 percent, he said. These gains may be coming from new customers that hadn't been in before, Dompier said. "The crowd is a little bit different."
Across town at the Little Chicago Club, owner Darla Kelman reported she's seen "no change in revenue. My customers are cussing me because I haven't set up an outdoor area yet, but I'm going to. That's just another huge cost, maybe $5,000. But it's sure nice not to have to clean ashtrays.... And the place smells better, too."
The Little Chicago is a working class tavern with grilled and fried food and sandwiches served all day, including breakfast. It has always had an emphasis on pool and darts and has courted the league play that goes along with it.
Kelman said of her staff of seven, herself included, only one doesn't smoke, and that has created a hardship. "You can't leave that bar unless there's someone else on staff to cover for you," she said.
She said business since the ban had been steady, though it is up well over last year's figures. "Gaming is holding steady, beverage is not up, food is up a little."
She said she hasn't seen anyone inclined to quit smoking yet, as a result of the ban. "My cigarette sales are still holding steady. The smokers are just having to bite the bullet.
"One thing, though, we've had to remind customers to take their money and personal belongings if they're going outside to smoke. And some of my glasses have disappeared."
In the southwest corner of the state, Sam DeBree presides over the plank at the Cavalier Lounge in the classy old Finlen Hotel in Butte. It is a bar, period; no food, no gambling, just cold beer and wine and well blended cocktails. The hotel and bar do have a couple of ballrooms that work well for hosting special events.
"Our smokers are still coming in, they're just stepping outside," DeBree said. "I haven't had one say they weren't coming in anymore. It hasn't affected businesses significantly. We haven't done anything for smokers besides put a butt collector outside because we just don't have the room.
"We have a wedding reception this weekend," he said, "and both the bride and groom smoke. They still had it here; they're fine with it.”
When everyone under 18 was banned from smoking premises in 2005, "that hurt some taverns that were serving food," DeBree said, explaining that those businesses had to ban smoking to serve families, or cater to smokers and ban families.
DeBree also pulls a shift around the corner and up the street at Maloney's, a working class tavern on Main Street. There, he said, "A couple of customers bitched ... a lot ... but they go outside and smoke. We're just glad the playing field is level for everyone.
"People will complain, but once the adjustment is made they'll step out, smoke, and come back in.”