With all licensed premises in England due to be completely smoke-free by 2008, just what impact will this have on the hospitality sector, and what should businesses in the West Midlands be thinking about to minimise the impact on their sales and footfall?
The proposed smoking ban is due to be implemented gradually over the next two years. By the end of this year, all government departments will be smoke free with this being applied to all enclosed public places by the end of 2007. The ban will be extended to all licensed premises by the end of 2008 - but with some exceptions.
Only pubs and clubs selling food will be smoke free with those just offering a salad or food heated in a microwave being exempt.
Private clubs can ban smoking with the approval of their members and it will be banned in the bar area of all pubs and clubs to protect long suffering staff.
So what impact is the ban likely to have in England?
In Ireland, where restrictions have been in place since March 2004, the pub trade has been quoted as saying sales are down by as much as 15 per cent. However, data from the Central Statistics Office show a fall of just four per cent, a trend which was in place before the ban was implemented.
Similarly, in Norway, the number of pubs, bars and restaurants that went bankrupt declined in a seven month period after the ban.
So what planning should pubs, bars and clubs in the West Midlands be implementing now?
Corporate finance manager at Birmingham based Mazars, Richard White, questions the impact the ban will have.
"Different surveys pull up different statistics and it is impossible to predict how the English public will react to the ban.
"Some figures, for example, show the number of nonsmokers using pubs and bars will increase with the number of current smokers remaining static. This would be best case scenario with more people taking advantage of the good hospitality sector we have in this region, and at the same time helping to boost their profits.
"The main question facing publicans is clear - do I continue to serve food in the pub or do I drop it in order to keep customers who smoke still coming through the doors?
"Businesses need to plan well in advance and think about how their actions will impact on cash flow.
"Although the vast majority of pubs serve food, research shows that most of their profits are still derived from the sale of drinks.
"It could be that dropping food from the menu may improve profits if all the pubs regulars are in favour of smoking and you are able to draw in smokers who have been forced out elsewhere.
"A careful analysis of past financial results will help to identify just where the most money is being made, and some general market research should help to establish what approach competitor pubs in the area are planning to take.
"Different customers have different wants and needs. Pubs are luckier than many businesses in that they often have a loyal clientele of repeat customers, with regular buying habits.
"However, clientele of one pub can be quite different from those of another one just a few miles down the road. In the end, it is your regular customers that you need to keep happy and our advice would be simply to ask them what they want.
"You could ask them directly, or perhaps organise a voting box over a period of months with a prize draw to encourage them to give you the feed back you need.
"By researching the needs of your customers now, you will have plenty of time in which to tailor your offering to keep the vast majority of them happy.
"There are still two years before places become smoke-free, but it really is important to think ahead, consider the potential impact, and do what needs to be done."
