Hotels Feel Pinch of Smoking Bans

The much anticipated fall may have an adverse affect on property values, which are typically linked to turnover, unless a notable recovery occurs over 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 – 8 per cent taking into account a broad cross section of the hospitality industry.”

“Hoteliers which have invested in building outdoor facilities to accommodate smokers have experienced a lesser impact on trade.”

This sentiment is shared by Vinci Partners director Frank Vinci who, talking specifically about the pub market, warns some businesses will 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,” said Mr Vinci.

“We’re cautiously optimistic that over the next six months, any downturn in trade will be overcome,” said Mr O’Sullivan. “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 that since smoking bans were imposed, there have been examples where food sales have 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 to have an adverse impact on the industry. However survey results also showed that the impact is to be short lived.

 

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco

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