Business Challenges
& Opportunities
By Jon Taffer
The top challenge in 2010 is, of course, the economic environment. Virtually every hospitality sector has been
affected, although bars have seen the smallest hit in the
hospitality industry. Even though nightclubs and bars are
experiencing far lower sales drops than the hotel and restaurant sectors, going forward, the losses in business potential
are real. Whatever the economists say, the indicator that
matters most to the bar industry is unemployment. Until
unemployment trends reverse and more people go back to
work, the nightclub and bar sector will continue to suffer
from lost consumer potential. The bar and nightclub sectors
are being dealt a double whammy:
Lower Guest Counts
In most markets, overall guest counts are down 8 to 18
percent. Some operations and markets are faring better than
others, but almost all are experiencing lower guest counts,
especially on non-weekend nights. This provides challenges
for operators to develop profitable promotions and marketing communications to offset this trend. The days of “two
for one appetizers” filling an operation are long over. Now,
because of lower market potential, it takes strong, compelling promotions to drive guest response. However, because
of the “double whammy,” increased guest traffic may not
equate to increased sales.
Lower Guest Spending
Tracking by Taffer Dynamics shows the average guest spend
is down by 5 to 25 percent, based upon the market and type
of facility. Our research further shows that dropping prices,
adding products and implementing other merchandising
steps is not greatly changing the amount of money guests
spend. Many operations are falling into a trap where they
lower prices — and thus, kill profits — but aren’t increasing
revenue enough to offset the lower margins.
So, going inro 2010, the biggest challenge is making the
numbers work. Success will come from great ideas, great
promotions and great experiences that are communicated
to the marketplace with minimal marketing resources. Since
we no longer have robust checkbooks, we have to lean on
robust ideas.
Saving money is always vital to operations, but it will undoubtedly be more prevalent in bar design in 2010. Saving money doesn’t have to mean cutting corners, though; plenty of creative, flexible options exist to boost your bottom line while keeping uests happy — and in fact, these options just might make them more satisfied.
ing for a sense of comfort … and spaces with history or a feeling of longevity such as old warehouses or buildings provide almost a sense of reassurance and familiarity.” Tools and guidance for going green are now read- ily available from major hospitality initiatives such as the Green Restaurant Association and P&G’s Fisher-Nickel Food Service Technology Center ( www. fishnick.com), as well as bar-centric resources uch as Green & Tonic or the Green Business Green Drinks networking event spearheaded by H. Jo- seph Ehrmann of Elixir in San Francisco, that city’s first Certified Green bar. We see more greening of the bar, from purchasing practices that lean toward organic and sustainable products (including eco- friendly décor and fixtures, wine, beer, spirits and ingredients) to back-of- house designs that reduce waste and conserve water and energy.
to look for opportunity to
maximize revenue, smart
transitional design allows
operators and concepts
more flexibility with floor
plans, light, sound, service
issues and security.”
Toning it Down
Less is more in 2010,
with more and more
venues becoming less
and less over the top in
Maximizing
Space
Bars and nightclubs
will make the most
of what they have
this year, especially
creating smaller,
more private areas
within a larger
space. “Because
of the economy
and money shortage,
owners are having to
be creative with their
use of current space,
and compartmental-
izing allows them to
capitalize on [it],” explains
Michelle Bushey, principal
and creative director of
Dallas-based design firm
Vision 360.
Design
& Décor
By Emily Hanna Mayock
Making the Transition
Bar and nightclub
operators will look to add
to their bottom lines by
servicing more day parts,
which requires furnishings and proper layout to
accompany these changing
atmospheres, says Boris
Zhuravel, director of business development at Mod-ernLine Furniture. Michael
Werner, vice president and
director of operations for
Kansas City, Mo.-based
Leap Hospitality, agrees:
“As businesses continue
terms of decor. “
Personal design statements
synonymous with frivolous
spending are practices of
the past when it comes to
the food and beverage industry,” Werner explains.
Going Green
“Hands down, this is
the biggest trend in the
design/construction indus-
try worldwide,” Bushey
states. This trend includes
the use of reclaimed
materials, energy-efficient
lighting, recycled carpeting
and low VOC paints as
well as the conversion
of older buildings into
bars, as opposed to new
builds. “I think clients and
customers alike are look-
Embracing Technology
From audio/visual, electrical and lighting design to
POS systems, technology
is changing bar design.
“Newer POS designs
and handheld devices
are changing [front-of-house] floor plans and bar
design by reducing space
allotted for traditional
terminal placement and
service stations,” Werner
explains. Plus, the need
for TV and video monitors
is evolving, prompting
owners to use screens
as artwork with digital
images, he predicts.
