Smoke bans suffocate pub profits
A report in The Age says that hotel owners are suffering from the ban on indoor smoking, with revenue generated by licensed pubs, hotels and entertainment venues dropping between 6 to 8 per cent since the laws were introduced on July 1.
The fall may affect property values, which are typically linked to turnover, unless there is a notable recovery in the next six months.
“The initial impact of smoking bans on licensed premises has seen mixed results,” said Paddy O’Sullivan, public affairs manager with the Australian Hotels Association, Victorian division.
“Across the board there has been a downturn in trade of between 6 to 8 per cent, taking into account a broad cross-section of the hospitality industry. Hoteliers who have invested in building outdoor facilities to accommodate smokers have experienced a lesser impact on trade.”
Vinci Partners director Frank Vinci said some pubs would do better than others.
“The hotels that may prosper out of all this are the larger ones that can accommodate both large smoking areas and large internal areas and not compromise on space for its patrons,” he said.
Mr O’Sullivan said he expected conditions to improve. “We’re cautiously optimistic that over the next six months, any downturn in trade will be overcome,” he said. “It’s a big social change for the public pub-goer, but over time people adjust, things become self-policing and then after a period, it’s not an issue.”
He said there had been examples where food sales had increased due to more families being attracted to the smoke-free environment.
According to a recent sentiment survey compiled by Jones Lang LaSalle Hotels, 87.5 per cent of respondents anticipated anti-smoking laws would have an adverse effect on the industry. Survey results also showed the impact was expected to be short-lived – please visit http://www.health.vic.gov.au/tobaccoreforms/
Report by The Mole
John Alwyn-Jones
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