Business reports mixed
By Cole Boehler
The health of hospitality businesses in Montana seems mostly dependent on the health of the local economy. Reports from around the state generally indicate a very challenging business climate, with the biggest revenue declines seen in gaming departments while food and beverage is also down in some locations.
But the trends are spotty, from location-to-location, city-to-city and region-to-region.
All agree the national and state economy combined with the Oct. 1 smoking ban and other factors are putting pressure on licensed businesses.
The following interviews were conducted mid-May.
Lois Franzen, Triangle Nite Club, Sidney
The Triangle lies just south of town and been there more than 50 years. Franzen became the owner 16 years ago. The place has long been one of the area's premier steak and seafood supper clubs as well as a chief entertainment venue with its bandstand and big dance floor, though live music is now limited to special events. Otherwise, it's a DJ, Franzen said.
She said business has been steady, "about the same. It was a little slow at the beginning of the year, but it's better now."
Sidney is in the heart of the eastern Montana oil fields where business can boom ... and bust, depending upon oil prices.
"They say the oilfield activity is coming back," Franzen said, noting the cycle that coincided with oil prices spiking to $145 a barrel in the summer of 2008, which now, at time of the interview, had fallen to $73 a barrel.
Franzen said gambling has never been much of a revenue center for the business which relies far more on the restaurant and bar. "We've only got four gaming machines so it's not that important."
The Triangle went smoke-free two years before the law mandated Oct. 1 of 2009. They have not built any special outdoor smoking areas. "The bar business has been good," Franzen reported, "and the food side has been about the same. In hindsight, going smoke-free early was a good move. The cleaning is sure easier; we don't have to repaint as often."
John Blair, Reno Club, Billings
Blair describes his establishment, established by his late farther in the late 1940s, as a neighborhood tavern, a workingman's bar catering to "locals." He has active pool leagues but doesn't do live entertainment. He does a pretty good package off-sale business, too.
"I can only speak for myself (and not other operations in Billings), but my bar is up," Blair said. "That's probably because I'm working harder at promoting because it was going down. Besides, my part of town (southwest Billings) is waking up.
"My bill with the Budweiser distributor was up 67 percent over last year and with Miller it was up 27 percent. But, my liquor store is up 33 percent. So I guess some people are getting their liquor here (not drinking it here) and taking it home."
The Reno Club used to offer "convenience" food – served from a fryer and a grill – but Blair replaced the kitchen one year ago with additional space for his bottle shop. "The food went flat probably due to a lack of attention. I grossed more in the first week with the (expanded) liquor store than I did the previous six months on food," he said.
"My gambling is down maybe 5 percent since Oct. 1" when the full smoking ban went into effect, Blair said.
The Reno Club has recently been listed for sale with a realtor but Blair says he is letting the listing expire. "I've got it going in the right direction. Besides, I'd have to go get a job in this business since I don't know anything else.
"People have all been whining about smoking, but I'm not hearing that too much lately. Look, it's over. Let's move forward."
Merlynn McOmber, Corvallis Tavern, Corvallis
Merlynn, and husband Cal, have operated this "workingman's" Bitterroot Valley venue for 28 years and it's become a pretty tough slog, she said.
The Bitterroot had been thriving with subdivision development, construction, burgeoning population and commercial activity. But the recession hasn't been kind to the local economy. The dozen log home building businesses that bustled along Highway 93 and employed hundreds are ghostly quiet right now.
"Things were way down," McOmber said, "but its picking up a little. I think more people are going back to work with the better weather. Our gaming is down 25 percent."
The establishment also offers "bar food" – prepared frozen goods cooked in a fryer. McOmber reported there hasn't been change in that department, though allowed food has been more of a customer convenience than a profit center.
She said beverage sales have improved since a January low, but, still, it is down considerably year-over-year. "I think there's just a lack of (discretionary) income. And there's the smoking ban, heavy police patrols ... and the environmentalists have pretty much killed logging and lumber. "
The McOmbers are working to add entertainment options focusing on NASCAR racing, pool and darts leagues and so on. "We're looking for a shuffleboard to see if we can revive that," she said. "We're not a sports bar, but we do have two TVs and may be adding another one." They do not offer wireless Internet service, which seems to becoming more prevalent in licensed establishments.
Nearby U.S. Highway 93 has been under reconstruction for the past several years and that has helped, said McOmber, but the stretch in her part of the valley is done and current construction has moved well away down the valley.
"But people still come in looking for donations," McOmber said. "We're just having to tell them 'no.'
"We need to raise our prices, but it's hard when people don't have money.
"It's said, 'You make 80 percent of your money from 20 percent of your customers,' and I guess that's true. We're working hard to take care of all of our customers."
Darla Kelman, Little Chicago, Black Eagle
Kelman purchased the Little Chicago about three years ago. It was – and is – an established blue collar neighborhood bar north of the Missouri River which separates Black Eagle from Great Falls.
It is a center for pool and darts players, has a kitchen that serves up meals all day beginning in the early morning, does a good adult beverage business and relies on significant income from its gaming machines.
Kelman said, in mid-May, that her league play, which brings in a lot of paying traffic, had just ended and she was concerned that she would be able to keep income up during the summer. "I've got to do something extra for the next three months: host more parties?; maybe horseshoes league?" she said, thinking out loud.
She said she believed the Great Falls area was doing better than many parts of the state. "We've been working the business hard and we were up pretty well last year but right now we're holding our own. Friday and Saturday nights have been pretty good.
"I've got some good help right now and that makes a big difference. And I just raised my prices 25¢ (domestic beer went from $2.50 to $2.75) and that is making a big difference."
John Perino, Pair-A-Dice, Butte
Perino runs what must be considered a true workingman's bar on Harrison Avenue, Butte's busy commercial main drag. He runs a darts team in league play but no pool. The place does not run live entertainment of offer food. Nope, it's bar.
Perino says his business has dropped off 10 to 15 percent, but most of that decline has come since the first of the year as opposed to October 1 when many felt the first real crunch.
He attributes the down cycle mostly to the national – and then Montana – economy. He says some of his "regulars" have left town in search of work in other locales. He also concedes he thinks Butte may be doing better than most places, especially with copper prices still ranging well above $3 a pound. The local copper mine employs almost 400 and paychecks there are healthy.
"I hear some other places – Kalispell and Bozeman – are really tough. Construction is way down there, though I see some new building going on here."
Perino said he did lose some "hard cores" over the smoking ban, "folks who would rather sit around their home and sit and smoke," he said, "something to be expected."
The Pair-A-Dice has just six gaming machines and Perino says that while they are only a small part of his income, they are down too. "Even the people up at the liquor store say they are down," he said.
"I think the ones hurting are the casinos," Perino said. "I think it's the little old ladies who saw their 401 K (retirement accounts) lose value" during the Wall Street crash.
"Funny thing is," Perino said, "my gross is down a lot more than my net, and I'm not sure why. I've been studying my computer reports trying to figure it out.
"Yes, we're down, but we're still making a buck. The economy will just have to turn around before we see much recovery."
Dave Waylander, 49er Casino, Livingston
The 49er is a tavern, casino and restaurant with plenty of amusement options including pool, darts and televisions for sports viewing. Waylander told the Tavern Times business was tough, and that there had been layoffs and now a 90-day pay reduction across the board. "We've let staff know how serious this is," he said.
In addition, the street in front of the business in under a major reconstruction which has interfered with easy customer access, further pinching trade.
"Livingston is tough," he said, and indeed state tax collection figures show gaming is off in the city 28 percent in the last quarter compared to last year. "We may be doing better than some others here, though," he said. "Our food and beverage is down a little, gaming is down a lot."