The verdict is in: Smoking bans hurt the hospitality business.
PRESS RELEASE
FOR IMMEDIATE RELEASE: June 11, 2007
The verdict is in: Smoking bans hurt the hospitality business.
David W. Kuneman, Director of Research of the Smoker's Club, Inc. originally became interested in the economic effects of smoking bans 4 years ago while reading an review article titled Review of the quality of studies on the economic effects of smoke-free policies on the hospitality industry. (1) That review article claimed that the "better quality" studies of post-smoking-ban effects always found no loss in the hospitality sector, and also claimed that of the studies finding any losses, "none were funded by a source clearly independent of the tobacco industry."
"Yet, when bans pass, we always hear complaints from the hospitality sector," remarked Kuneman.
In 2004 Kuneman began researching actual government data from the US Department of Commerce and found that bar and restaurant sales almost always suffered losses in states with statewide bans or even a wide proliferation of local bans. (2) "This led me to strongly question the reliability of the antismoking groups studies" he said.
The "review..." article had claimed that all 21 "truly independent" studies (actually all studies funded or supported to one degree or another by antismoking lobby groups) found no negative impact on revenue. The unanimity of that claim raised Kuneman's suspicions: "Considering that natural variability would predict at least some of these studies would report downturns in business for any number of reasons, it is very likely they were cherry-picking data and only publishing what they wanted lawmakers to hear."
On the other hand the studies referenced in the review article which were supported by the tobacco industry or "related" groups (basically any group with ties to the bar/restaurant industry was considered by the review article to be "tobacco industry related" ) usually showed economic loss from bans, but at least some of those studies reported that sometimes bans had no detrimental effect in certain segments of the hospitality industry.
Overall, Kuneman found that the likelihood of economic loss is lower when the establishment is solely for the purpose of eating and higher if the establishment is for socializing. Low, if the establishment does not serve alcohol, and high if most sales are alcoholic beverages ... such as the case for bars and nightclubs. Low, if the jurisdiction had a low smoking rate, and high if it had a high smoking rate. And finally, low if the jurisdiction is located in a mild weather climate, and patio drinking, dining and smoking are allowed, and high in jurisdictions with cold winters or no patio smoking allowed. Employment loss followed these same patterns.
To date, all studies of betting establishments have reported losses when bans take effect.
Kuneman also noticed that many of the studies which claimed no loss, were actually done in jurisdictions where bans were either not enforced or had many exemptions covering such things as limited or no food service, over-21 or after-9-o'clock provisions, or "hardship" waivers. According to Kuneman, "It's important for lawmakers to know that many of these so-called bans were so mild that any reasonable person would not expect much economic loss to be reported. It's not surprising that groups sympathetic to bans selected the jurisdictions they did."
Finally, Kuneman did his own, slightly different "review" of all the economic loss studies available. He compared economic studies conducted by professional economists to economic studies conducted by medical researchers or antismoking lobby groups. He found that most of the economists' studies, including several published in peer-reviewed economics journals (3), found economic loss, which was sometimes quite severe. He also examined the subset of studies funded by the one group with no axe at all to grind except concern for the real economic profits and losses stemming from bans: the hospitality organizations and owners of businesses themselves. Those studies also were nearly unanimous in finding extensive economic impact and loss due to smoking bans.
"The cat's out of the bag." according to Kuneman. "Let's face it and be honest about it. There have been way too many jurisdictions which have enacted bans now for their ill-effects to be ignored. These owners are talking among themselves, and communicating with owners yet to be subject to bans. Everyone now knows bans hurt business and despite what pro-ban lobbyists claim, there are now solid and independent economic studies to back up that conclusion."
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