Tag Archives: NBA lockout

The Hospitality Industry’s Journey Through the NBA Lockout

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When the NBA lockout ended on Thursday December 8, it wasn’t just a relief for the NBA and basketball fans, but also for those in the hospitality industry who have been heavily impacted due to the loss of sales.

Restaurants alone saw losses anywhere from 15 to 70 percent.  Some more, some less.  In result, the NBA lockout made it tough for those restaurants who highly benefit from or depend on the business the NBA games bring in.

Early Worries

Back in September, when it was just a threat games could have been cancelled, it really made those in the industry nervous—but they held on with hope an agreement would have been met and the season would go on as planned.

However by October, it really started to settle in the hospitality industry was in for a bumpy ride as cancelled games would cause a domino effect.

The Domino Effect

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All those who benefit from NBA games such as hotels, arena staff and restaurants had to quickly learn how to cope with such a large loss of sales.

To take a second to focus on one piece of the hospitality industry puzzle, restaurants, not having basketball meant there would not be any customers to come in and watch those games.  It also meant there would not be any customers coming in before or after games either.

 

 

Tough Decisions

The domino effect made it hard for restaurants.  All over the country, management had to make cuts and tough decisions.  Some had to cut hours while others had to lay off employees.

Also, lower restaurant sales meant they weren’t spending money either on things like food or supplies.

When President and CEO of Scotty’s Brewhouse, Scott Wise, visited Inside Indiana Business with Gerry Dick on October 18, when the affects of the lockout were being heavily discussed in the media, he explained it could tremendously hurt their business, downtown Indianapolis and all other NBA cities in general.

Wise’s statement held true.  The longer the lockout went on, the more restaurants hurt.

Feeling the Effects

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Due to the lockout, restaurants struggled in two ways.  First, the loss of sales—which was immediate and in-the-moment.  Then second, it was also stressful because they had to start planning how to pull through what could have possibly been a season without any NBA games.

There is never an ideal time to cut hours or layoff staff, but it’s extremely tough to let employees go before and during the holiday season—which was a decision many restaurants were faced with.

On a Larger Scale

Moving passed just restaurants to describe how the entire hospitality industry was affected, Wise described the domino effect as “Titanic-esque,” a tidal wave ripple effect felt across the country and also in our economy.

“This is not exaggerated or over-stated,” Wise said. “The number of employees at each arena affected with no job, all the retail, hotels and restaurants surrounding each arena that had to lay people off.”

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He then mentioned the other aspects to consider such as sales tax, employment tax and the income tax lost from players, employees and customer purchases.

For Wise’s locations, he had lost sales but was able to survive the losses by using other restaurant profits to offset—however, he said small businesses would not have been able to do that.

“How would that then affect bankruptcies, unemployment benefits, banks, government, etc? Titanic ripple effects.”

So in the end, the NBA lockout has affected more than just the NBA itself.  Thankfully things can start to get back to normal for the hospitality industry, but this will definitely be a time they will never forget and hope never happens again.

Central’s Week in Brief: October 14, 2011

Every Friday Central brings you stories from the week that you might have missed, but that are definitely worth a look. We’ll feature food news covering everything from the weird to the wonderful in the world of restaurants, schools, the military and more.  It’s our way to help you go into the weekend with a little extra knowledge and maybe even a project or recipe to try out!

1.With the NBA commissioner cancelling the first two weeks of the basketball season due to the lockout, it’s not just the owners and teams feeling the effects.  Restaurants all over the country are struggling with the current situation and fear what could happen if the lockout doesn’t end soon.  For example, in Indianapolis, Mayor Greg Ballard told WTHR between 10,000 and 15,000 people visit the downtown area 50 times per year for basketball.  One pub owner told them he’s already lost six employees.  Hopefully the lockout will end soon and the hospitality industry can get back to business as usual.

2. As a part of her Let’s Move! campaign, First Lady Michell Obama teamed up with  National Geographic Kids for the Let’s Jump! event.  The October 11 event kicked off an attempt to break a Guinness World Record®.  What record? The most people doing jumping jacks in a 24 hour period.  She started Let’s Jump! on the White House’s south lawn, along with 400 local children.  The goal was to exceed over 20,000 people from all over the world and those who participated had to record and document their jumping jacks then send it in for review.  It’s still unknown whether or not the record was broken, but we’ll be sure to share the information as it becomes available!

3. The holiday season is just around the corner, which means restaurants are gearing up for sales.  In this NRN article, they said the National Retail Foundation “projected that retail industry sales for the months of November and December will increase 2.8 percent.” While that is an increase, it doesn’t quite match up to last year’s 5.2 percent increase. However, as they mentioned in the article, improvement is improvement and some restaurants are already pushing out their LTOs (limited time offers) to be in the minds of consumers.

4. San Antonio’s J. Anthony’s Seafood Cafe had quite the interesting experience this week when they were robbed by three women, one of which whom got stuck in the drive-thru window while attempting to make her escape.  The incident happened around 1 a.m. on October 12.  The other two women have not yet been found.  Read more about this story at the KENS5 news website.

5. Sometimes restaurants create some real head-scratching policies.  Zagat picked out 10 of the most controversial restaurant policies then took a look at both the pros and cons in this article. Take a look at these 10 and let us know which ones you stand by and which ones you don’t!