Tuesday, September 28, 2004
Smoking bans don't hurt business, economists claim
Reality versus Perception
By Matt Leingang Enquirer staff writer
Smokers don't light up when they go to movie theaters. But Bill Heck, general manager of Madison Bowl in Madisonville, doesn't think they'd be so accommodating at his business.
Many of the 1,200 men and women who play in his bowling leagues are smokers, Heck says.
A government-imposed smoking ban in Cincinnati might drive away one-third of his business to suburban bowling alleys where smoking would still be allowed, Heck says.
"That would cut revenues, and I'd have to cut personnel, probably," says Heck, who employs 35 full- and part-time workers.
Heck's fear that a smoking ban would be bad for business is not entirely unfounded.
SMOLDERING QUESTIONS
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As a Cincinnati advisory panel prepares to report to City Council in November on a workplace smoking ban, The Enquirer examines two key questions:
Monday: What are the health risks associated with breathing secondhand smoke?
Today: Are smoking bans bad for business?
Ban favored
The Cincinnati Clean Indoor Air Coalition, an advocacy group funded with money from the national tobacco settlement, commissioned a telephone poll in April of 500 registered Cincinnati voters. The poll was conducted by Fallon Research and Communications Inc. and has a margin of error of plus or minus 4 percentage points. The results:
64 percent said they would support a law prohibiting smoking in all workplaces.
83.7 percent said they either would be more willing to eat at a smoke-free restaurant or wouldn't change their patronage.
16.3 percent said they would be less likely to go to a smoke-free restaurant.
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In other cities where clean indoor air laws have been implemented, there are anecdotes about restaurants, bowling alleys, bingo halls and small neighborhood pubs laying off employees or going out of business because of sudden drops in revenue.
Owners blame clean indoor air legislation for eroding their customer base.
But most of the scientific, peer-reviewed economic studies indicate that smoking bans either have no overall negative effect or a positive effect on a city's hospitality industry, in terms of sales and employment.
"The only studies showing a negative effect are of low quality and done by or for the tobacco industry or one its allies," says Stanton A. Glantz, director of the Center for Tobacco Control Research and Education at the University of California-San Francisco.
Glantz says the only accurate way to measure economic impact is to take sales tax receipts, provided by the state or local taxing agency, and compare the data before and after a smoking ban is enacted.
Some studies are flawed, Glantz says.
Flawed studies are the ones that typically ask bar or restaurant owners to "predict" what would happen to sales revenues, Glantz says.
Andrew Hyland, a research scientist at the Roswell Park Cancer Institute in Buffalo, N.Y., has reviewed all of the 97 economic studies of smoking bans published before 2002. Eighteen of what he considers the best studies - relying on both sales tax revenue and employment data - all point to the same conclusion.
"Smoking bans do not hurt businesses," Hyland says.
Still, he cautions that these studies should not be used by advocates as a guaranteed predictor of what might happen to a particular city or to a particular business.
"I can't say for sure what would happen in Cincinnati if they go smoke-free, although I'm pretty confident that the air will be cleaner and the hospitality economy will continue to operate at the same level it is now," Hyland says.
Border is close by
Northern Kentucky has emerged as a major issue in Cincinnati's smoking ban debate.
No marketing study has been done to support the notion that a smoking ban would drive customers out of Cincinnati and across the river to entertainment districts in Newport and Covington.
But similar arguments have been made in other U.S. cities where borders are involved, and it gets the attention of politicians.
Cincinnati Mayor Charlie Luken, who has not taken a public position on the issue, has told advocates that it may be detrimental for Cincinnati to go it alone. Getting Northern Kentucky and the surrounding Ohio suburbs to go along with smoking bans of their own would level the playing field.
Kentucky is already home to two high-profile establishments that have voluntarily gone smoke free: Applebee's at Covington Landing and the UpStarCrow Jazz & Blues Dinner Club in Newport.
"We do a survey of our customers, and 90 percent say the reason they come here and keep coming back is because of the nonsmoking atmosphere," says Steve Taylor, a managing partner with UpStarCrow.
About 67 percent of Kentuckians and 73 percent of Ohioans don't smoke, according the U.S. Centers for Disease Control and Prevention. Advocates of a smoking ban argue that bar and restaurant owners are missing a huge business opportunity to capture that market.
"I rarely ever visit clubs or go to indoor concerts anymore," says Jennifer Redwitz, 30, a nonsmoker who lives in Pleasant Ridge. "I miss going out, but my health is more important."
But opponents say it's the smokers who go to bars, and that's where many owners make their money. They argue that some smokers might refuse to go to Cincinnati bars if they can hop the state border to a place where smoking is allowed.
Tempe's experience
In 2002, Tempe, Ariz., banned smoking in all bars and restaurants, while neighboring communities exempt stand-alone bars.
"I was losing $7,000 a month," says Mike Cuneo, who owned a Tempe bar called the Ballpark Pub, less than a mile from Mesa. He closed it in 2003, one year after Tempe's smoking ban took effect.
Opponents of the ban in Tempe claim that 30 city bars have closed, but city officials say they can't verify that.
"There have been winners, and there have been losers," says Jan Schaefer, Tempe's economic development manager.
Tempe's overall economy went into a tailspin after the 9/11 terrorists attacks, and it hasn't fully recovered, Schaefer says. To blame bar closings entirely on the smoking ban isn't fair, she says.
"It's hard to distinguish between bars that may have been hurt by the smoking ban and those hurt by the economy," Schaefer says.
El Paso, Texas, where Americans can walk across a bridge over the Rio Grande River to Juarez, Mexico, passed a smoking ban in 2001. Its hospitality industry continues to hum.
"I didn't agree with the ban, but we haven't been hurt because we have the year-round climate where smokers can just go out on the patios," says Anthony Duncan, president of the El Paso Restaurant Association.
Smokers in Toledo, which banned smoking at the end of 2003, aren't fleeing for the suburbs of Maumee, Sylvania and Perrysburg, according to a financial study released in August by the University of Toledo and the Medical College of Ohio.
That's not enough to assuage John Frazier, managing partner of Mulligan's in Hyde Park. He's located next to a BW3 bar and restaurant in Norwood's Rookwood Pavilion.
"Tell me I'm not at a disadvantage," Frazier says. "Twenty percent of my guests smoke, and I'd probably lose them to a smoking ban."
Roger Oldham, owner of the Professional Bartending School in Northside, is less passionate about the issue. Oldham, 47, has spent more than 20 years as a bartender and manager of food and beverage establishments.
"I was just up in Boston. There's no smoking there, and I think it's only a matter of time before it makes its way across the country," Oldham says.
Oldham says bars that cater to hard drinkers and hard smokers have the most to fear. "The more upscale the place, the less impact you'll see," he says.
Some attorneys argue that bars and restaurants can't afford not to go smoke-free because of the threat of future lawsuits.
"The health effects of secondhand smoke on employees and customers using public accommodations is a significant liability issue for owners and employers of these facilities," says Jim Bergman, director of the nonprofit Smoke-Free Environments Law Project in Ann Arbor, Mich.
Employees in New York, California, Florida, Kansas, Massachusetts, New Mexico and Wisconsin have qualified for workers' compensation for emphysema, asthma and chronic bronchitis linked to secondhand smoke, Bergman says.
"Our feeling is that from an employer's view, it makes sense to adopt smoke-free policies," Bergman says.
But Ronda Roell, owner of Arnold's Bar and Grill on Eighth Street, the oldest bar in Cincinnati, says the city should not move so fast on a citywide ban.
"Not while we're still fighting so hard to gain people back downtown," Roell says. "All of the restaurants here, except for a few, are on the fence. To just go and change things could make or break us."
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E-mail mleingang@enquirer.com
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