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.
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
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.
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
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.”
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.