According to a monograph from the University of California San Francisco (www.tobaccoscam.ucsf.edu),  “Going smoke-free is risk-free from a business standpoint…“All reputable economic studies show smoke-free measures do not reduce and may increase restaurant sales. . . No reliable economic study has ever found that going smoke-free reduced restaurant sales, even when surrounding areas still allowed smoking.”

Smoke-Free Dining Reduces Liabilities:
As evidence mounts about the dangers of tobacco smoke pollution, so do employers’ liabilities. A 1993 National Restaurant Association memorandum indicated that employers could be held liable for legal claims made by employees who develop lung cancer or other ailments. Every single credible health organization has concluded that tobacco smoke pollution is a carcinogen. The fact that second hand tobacco smoke causes significant numbers of death from heart disease among non-smokers is also firmly established.

Restaurants and bars that allow smoking have higher maintenance expenses (carpets, drapes, linens, paint), higher insurance premiums (fire, medical, workers comp, liability) and higher labor costs (absenteeism, productivity).

History Repeats Itself:
Predictably, after each new local or state-wide smoke-free ordinance, news reports appear about how these policies are harming business. Tobacco companies work behind the scenes to encourage these news stories, often working through restaurant associations. The reports are typically based on unscientific surveys and informal first impressions. In every single case, when there is time to collect objective data such as sales tax data, 6-12 months before and after a new smoke-free ordinance, it is shown that, on average, there is absolutely no decline in sales after 100% smoke-free ordinances for either bars or restaurants. Period. In every case. 6-12 months of data is needed to control for seasonal and other variations in sales. Those who don't look at the objective evidence can be misled by each new set of predictions of economic calamity with each new smoke-free ordinance.
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Other evidence of the lack of adverse economic impact of smoke-free bars and restaurants:

Scollo M, Lal A, Hyland A, and Glantz S: Review of the quality of studies on the economic effects of smoke-free policies on the hospitality industry Tobacco Control 2003; 12:13-2
http://tc.bmjjournals.com/cgi/reprint/12/1/13.pdf

Smoke-free workplace policies reduce both exposure to secondhand tobacco smoke and cigarette consumption.1–3 Smoke-free restaurants and bars similarly reduce exposure to tobacco smoke toxins among hospitality workers and patrons but also represent a serious business threat to the tobacco industry.

In California in 1987, a 100% smoke-free restaurant ordinance in Beverly Hills was rolled back, partly in response to claims that the ordinance was responsible for reducing restaurant revenues by 30%, claims which later turned out to be unsubstantiated.4 Since then, tobacco companies and allied groups have routinely predicted that enactment of such legislation would severely impact restaurant and bar sales and employment.5–9 Health advocates, by contrast, have presented studies indicating that no such adverse effects actually occurred.10 Policymakers are typically presented with a large amount of conflicting material, with evidence ranging from anecdotes about individual businesses11 to scientific studies analysing objective information collected independently across an entire hospitality sector.12 Such data are often confusing to interpret and it is difficult for policymakers to reach an evidence based conclusion. In their case study of deliberations by the Maryland Occupational Safety and Health Advisory Board, Montini et al demonstrate that those opposing proposed smoke-free workplace regulations lodged twice the number of submissions as those supporting it, but that evidence from opponents was substantially less scientifically rigorous than evidence provided by supporters of workplace smoking regulations.13 Similar findings were observed in relation to the Californian Environmental Protection Agency’s risk assessment of secondhand smoke,14 and in Maryland and Washington hearings on proposed clean indoor air regulations.15 Bero and her colleagues have repeatedly called on advocates to more forcefully draw to legislators’ attention the superior scientific quality of the evidence base relied upon by public health groups in calling for clean air legislation.13–15 This paper compares the quality of evidence and conclusions about the economic impact of smoke-free laws on the hospitality industry based on the type of data used, how the studies are designed, analysed and interpreted, and the funding source.

ABSTRACT Objective: To compare the quality and funding source of studies concluding a negative economic impact of smoke-free policies in the hospitality industry to studies concluding no such negative impact.

Data sources: Researchers sought all studies produced before 31 August 2002. Articles published in scientific journals were located with Medline, Science Citation Index, Social Sciences Citation Index, Current Contents, PsychInfo, Econlit, and Healthstar. Unpublished studies were located from tobacco company websites and through internet searches.

Study selection: 97 studies that made statements about economic impact were included. 93% of the studies located met the selection criteria as determined by consensus between multiple reviewers.

Data extraction: Findings and characteristics of studies (apart from funding source) were classified independently by two researchers. A third assessor blind to both the objective of the present study and to funding source also classified each study.

Data synthesis: In studies concluding a negative impact, the odds of using a subjective outcome measure was 4.0 times (95% confidence interval (CI) 1.4 to 9.6; p = 0.007) and the odds of not being peer reviewed was 20 times (95% CI 2.6 to 166.7; p = 0.004) that of studies concluding no such negative impact. All of the studies concluding a negative impact were supported by the tobacco industry. 94% of the tobacco industry supported studies concluded a negative economic impact compared to none of the non-industry supported studies.

Conclusion: All of the best designed studies report no impact or a positive impact of smoke-free restaurant and bar laws on sales or employment. Policymakers can act to protect workers and patrons from the toxins in secondhand smoke confident in rejecting industry claims that there will be an adverse economic impact.

Caroline M. Fichtenberg and Stanton A Glantz: Effect of Smokefree Workplaces on Smoking Behavior: Systematic Review: British Medical Journal, Jul 2002; 325: 188. This review of 26 studies showed that totally smokefree workplaces led to a decline in the absolute smoking prevalence of 3.8% and also a decline in daily cigarette consumption of 3.1 fewer cigarettes smoked per continuing smoker among employees, yielding a mean reduction of 1.3 cigarettes per day per employee, which corresponds to a relative reduction of 29% in the cigarette consumption rate. Smokefree workplaces not only protect nonsmokers from the dangers of passive smoking, they also encourage smokers to quit or to reduce consumption.


R Edwards and D Reed: Are smoke-free policies good for business? (Survey of pubs / restaurants indicating smokefree policies are popular). December 1, 2002; 11(4): 380 - 380. HTML or PDF: http://tc.bmjjournals.com/cgi/reprint/11/4/380.pdf 
Bartosch W, Pope G. The effect of smoking restrictions on restaurant business in Massachusetts, 1992-1998. Tobacco Control 2002;11(Suppl II):ii38-42. Bialous S, Glantz S Tobacco Control in Arizona Institute for Health Policy Studies, University of California. 1997 www.library.ucsf.edu/tobacco/az.
Glantz S Effect of smokefree bar law on bar revenues in California Tobacco Control 2000;9(1):111-2

Hyland A, Tuk J. Restaurant employment boom in New York City. Tobacco Control 2001;10:199-200.

Jones K, Wakefield M, Turnball D. Attitudes and experiences of restaurateurs regarding smoking bans in Adelaide, South Australia. Tobacco Control 1999;8; Spring 1999:62-6.

Lessons learned from the tobacco industries’ efforts to prevent the passage of a work place smoking regulation. Am J Public Health 2000;90:1926–30.
OBJECTIVES: This study assessed the implementation of tobacco industry strategies to prevent a workplace smoking regulation. METHODS: Tobacco industry internal documents were identified; hearing transcripts for the affiliations, arguments, and positions regarding the regulation of testifiers were coded; and media coverage was analyzed. RESULTS: Tobacco industry strategies sought to increase business participation and economic discussions at public hearings and to promote unfavorable media coverage of the regulation. The percentage of business representatives opposing the regulation grew from 18% (5 to 28) to 57% (13 of 23) between the hearings. Economic arguments opposing the regulation rose from 25% (7 of 28) to 70% (16 of 23). Press coverage was neutral and did not increase during the period of the regulatory hearings. CONCLUSIONS: The tobacco industry was successful in implementing 2 of its 3 strategies but was not able to prevent passage of the comprehensive workplace regulation.

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Bartosch W, Pope G. The economic effect of smokefree restaurant policies on restaurant businesses in Massachusetts J Public Health Manag Pract 1999;5(1):53-62 (cited in Scollo et al, Tobacco Control, 2003 as “ref 7”)
Bartosch W, Pope G. Preliminary analysis of the economic impact of Brooklines smoking ban. Massachusetts: Health Economics Research Inc; 1995.
Bartosch W, Pope G. The economic effect of smoke-free restaurant policies on restaurant businesses in Massachusetts. Journal of Public Health Management Practices 1999;5:53-62.
Biener L, Siegel M. Behavior intentions of the public after bans on smoking in restaurants and bars. AJPH 1997; 87: 2042-2044.
Biener L; Fitzgerald G. Smoky bars and restaurants: who avoids them and why?
Journal of Public Health Management and Practice, 1999 Jan, 5(1):74-8.
Corsun DL, Young CA, Enz CA. Should NYC's restaurateurs lighten up? Effects of the city's smoke-free air act. Cornell Hotel and Rest Admin Q 1996; 37: 25-33.
Dyer C. Confidential tobacco documents enter public domain. British Medical Journal 1998;316:1186. (cited in Scollo et al, Tobacco Control, 2003 as “ref 3”)
Ellis GA, Hobart RL, Reed DF. Overcoming a powerful tobacco lobby in enacting local smoking ordinances: The Contra Costa County experience. J Pub Health Policy 1996; 17: 28-46.
Evans MK. Review of Cornell survey on smoking bans in New York City: executive summary. Cornell Hotel and Rest Admin Q 1996; 37: 8-9.
Glantz S, Charlesworth A Tourism and hotel revenues before and after passage of smoke-free restaurant ordinances JAMA 1999;281:1911-1918
Glantz S, Smith L The effect of ordinances requiring smokefree restaurants and bars on revenues: A follow up Am J Public Health 1997;87(10):1687-1693
Glantz SA, Smith LRA. The effect of ordinances requiring smoke-free restaurants on restaurant sales. AJPH 1994; 84: 1081-1085. Erratum AJPH 1997; 87: 1729-1730.
Glantz SA Tourism and Hotel Revenues Before and After Passage of Smoke-Free Restaurant Ordinances JAMA, May 26, 1999—Vol 281, No. 20 pg 1911
Glantz SA. Smoke-free restaurant ordinances do not affect restaurant business.
Period [editorial]. Journal of Public Health Management and Practice, 1999 Jan, 5(1):vi-ix.
Goldstein A, Sobel R Environmental tobacco smoke regulations have not hurt restaurant sales in North Carolina North Carolina Med J 1998;59(5):284-287
Huang P, Tobias S, Kohout S, Harris M, Satterwhite D, Simpson D, et al. Assessment of the impact of a 100% smokefree ordinances on restaurant sales West Lake Hills, Texas, 1992-1994 MMWR 1995;44(19):370-372
Hopkins, DP, Briss PA, Ricard CJ, et. al Reviews of Evidence Regarding Interventions to Reduce Tobacco Use and Exposure to Environmental Tobacco Smoke. Am J Prev Med 2001;20(2S)
Hyland A, Cummings KM. Restaurant reports of the economic impact of the New York City smoke-free air act. J Pub Health Mgmt Prac 1999; 5:37-41.
Hyland A, Cummings KM. Restaurant employment before and after the New York City smoke-free air act. J Pub Health Mgmt Prac 1999; 5:22-27.
Hyland A, Vena C, Cummings K, Lubin A The Effect of the Clean Air Act of Erie County, New York on Restaurant Employment J Public Health Manag Pract 2000;6(6):76-85
Hyland A, Cummings K, Nauenberg E Analysis of taxable sales receipts: was New York City's Smoke-free Air Act bad for business? J Public Health Manag Pract 1999;5(1):14-21
Hyland A. Before and After Smoke-free Regulations in New Taxable Sales from Eating and Drinking Places in New York State. New York: Roswell Park Cancer Institute; 2002 June.
Rigotti NA, Stoto MA, Schelling TC. Do businesses comply with a no-smoking law? Assessing the self-enforcement approach. Prev Med 1994; 23: 223-229.
Samuels B, Glantz S. The politics of local tobacco control. JAMA 1991;266:2110–7.
Sciacca J, Ratliff M Prohibiting smoking in restaurants: Effects on restaurant sales
Am J Health Promot 1998;12(3):176-184
Sciacca JP. A mandatory smoking ban in restaurants: concerns versus experiences. J Comm Health 1996; 21: 133-150.
Sciacca JP, Eckrem M. Effects of a city ordinance regulating smoking in restaurants and retail stores. J Comm Health 1993; 18:175-182.

From the Centers for Disease Control and Prevention. Assessment of the impact of a 100% smoke-free ordinance on restaurant sales--West Lake Hills, Texas, 1992-1994. JAMA 1995 Jul 19, 274(3):206-8.

Office of Smoking and Health. 'Impact of a Smoking Ban on Restaurant and Bar Revenues — El Paso, Texas, 2002' Morbidity and Mortality Weekly Report, February 27, 2004. Comment: The analysis found that no statistically significant changes in restaurant and bar revenues occurred after the smoking ban took effect. These findings are consistent with and add to the existing body of evidence that local and state laws making enclosed workplaces and public places smokefree do not negatively impact restaurant and bar sales or other related economic indicators.

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Biener L, Siegel M., Am J Public Health 1997 Dec;87(12):2042-4
Behavior intentions of the public after bans on smoking in restaurants and bars.

Center for Survey Research, University of Massachusetts, Boston 02125, USA.

OBJECTIVES: This study assessed the potential effect of smoke-free policies on bar and restaurant patronage. METHODS: Random-digit dialing techniques were used in surveying a representative sample of Massachusetts adults (n = 2356) by telephone. RESULTS: Approximately 61% of the respondents predicted no change in their use of restaurants in response to smoke-free policies, 30% predicted increased use, and 8% predicted decreased use. In turn, 69% of the respondents predicted no change in their patronage of bars, while 20% predicted increased use and 11% predicted decreased use. CONCLUSIONS: These results suggest that smoke-free policies are likely to increase overall patronage of bars and restaurants.
Glantz SA; Smith LR. The effect of ordinances requiring smoke-free restaurants and bars on revenues: a follow-up [see comments] [published erratum appears in Am J Public Health 1998 Jul;88(7):1122]. American Journal of Public Health, 1997 Oct, 87(10):1687-93.

Abstract:
OBJECTIVES: The purpose of this study was to extend an earlier evaluation of the economic effects of ordinances requiring smoke-free restaurants and bars. METHODS: Sales tax data for 15 cities with smoke-free restaurant ordinances, 5 cities and 2 counties with smoke-free bar ordinances, and matched comparison locations were analyzed by multiple regression, including time and a dummy variable for the ordinance.

RESULTS: Ordinances had no significant effect on the fraction of total retail sales that went to eating and drinking places or on the ratio between sales in communities with ordinances and sales in comparison communities. Ordinances requiring smoke-free bars had no significant effect on the fraction of revenues going to eating and drinking places that serve all types of liquor. CONCLUSIONS: Smoke-free ordinances do not adversely affect either restaurant or bar sales.

Hyland A; Cummings KM. Restaurateur reports of the economic impact of the New York City
Smoke-Free Air Act. Journal of Public Health Management and Practice, 1999 Jan, 5(1):37-42.

Abstract: The objective of this study was to determine the extent to which restaurateurs have reported a change in business since the New York City Smoke-Free Air Act took effect. A population-based cross-sectional telephone survey of 434 owners/managers of restaurants located in New York City was conducted by an independent survey firm during November and December 1996. There is no evidence to suggest that the smoke-free law has had a detrimental effect on the city's restaurant business.

Bartosch WJ; Pope GC. The economic effect of smoke-free restaurant policies on restaurant business in Massachusetts. Journal of Public Health Management and Practice, 1999 Jan, 5(1):53-62. Abstract: The objective of the study was to determine if local smoke-free restaurant policies in Massachusetts affected restaurant sales. The authors used a pre-/post-quasi-experimental design to compare town-level meals tax data before and after the imposition of local smoke-free restaurant policies. Data for 235 towns (including 32 adopting communities) were entered into a fixed effects regression model to estimate changes in restaurant sales over time. The study failed to find a statistically significant effect of local smoke-free policies on restaurant business. It provides evidence that local smoke-free policies do not cause a large decline in communities' restaurant industries.

Biener L; Fitzgerald G. Smoky bars and restaurants: who avoids them and why?
Journal of Public Health Management and Practice, 1999 Jan, 5(1):74-8.

Abstract: The objective of this study was to provide new insight into who avoids smoky places, the types of places they avoid, and the reasons they give. A representative sample of Massachusetts adults (N = 4,929) was surveyed by telephone during 1995 and 1996. Forty-six percent of non-smokers reported having avoided a smoky place. Reasons were aversion to the lingering smell (34.8%) and health issues (31.9%). Many adults avoid restaurants and bars because of the expectation of excessive environmental tobacco smoke (ETS). Patronage may increase after smoke-free policies are implemented and nonsmokers become aware of the opportunity to dine in establishments free of ETS.

Glantz SA; Charlesworth A. Tourism and hotel revenues before and after passage of smoke-free restaurant ordinances. JAMA1999 May 26, 281(20):1911-8.

CONTEXT: Claims that ordinances requiring smoke-free restaurants will adversely affect tourism have been used to argue against passing such ordinances. Data exist regarding the validity of these claims.

OBJECTIVE: To determine the changes in hotel revenues and international tourism after passage of smoke-free restaurant ordinances in locales where the effect has been debated. DESIGN: Comparison of hotel revenues and tourism rates before and after passage of 100% smoke-free restaurant ordinances and comparison with US hotel revenue overall.

SETTING: Three states (California, Utah, and Vermont) and 6 cities (Boulder, Colo; Flagstaff, Ariz; Los Angeles, Calif; Mesa, Ariz; New York, NY; and San Francisco, Calif) in which the effect on tourism of smoke-free restaurant ordinances had been debated. MAIN OUTCOME MEASURES: Hotel room revenues and hotel revenues as a fraction of total retail sales compared with preordinance revenues and overall US revenues.

RESULTS: In constant 1997 dollars, passage of the smoke-free restaurant ordinance was associated with a statistically significant increase in the rate of change of hotel revenues in 4 localities, no significant change in 4 localities, and a significant slowing in the rate of increase (but not a decrease) in 1 locality. There was no significant change in the rate of change of hotel revenues as a fraction of total retail sales (P=.16) or total US hotel revenues associated with the ordinances when pooled across all localities (P = .93). International tourism was either unaffected or increased following implementation of the smoke-free ordinances.

CONCLUSION: Smoke-free ordinances do not appear to adversely affect, and may increase, tourist business.

Samuels B, Glantz S. The politics of local tobacco control. JAMA 1991;266:2110–7.
Department of Medicine, University of California, San Francisco.

Until the nonsmokers' rights movement, tobacco control activity was at the federal or state levels, which is where the tobacco industry dominates. Since the appearance of the nonsmokers' rights movement, progress in tobacco control has occurred primarily at the local level. In response to the success of this movement, the tobacco industry has developed "smokers' rights" groups and other tactics to fight local legislation. Several recent local campaigns in California illustrate these tactics. Tobacco control forces follow many paths, from sitting on the sidelines to making a serious commitment to smoking control legislation. Despite the tobacco industry's superior financial resources, the outcome of proposed local tobacco control legislation appears to depend on how seriously the health advocates mobilize in support of the local legislation. When the health community makes a serious commitment of time and resources, it wins. When it fails to make such a commitment, the tobacco industry prevails, more by default than by its superior financial resources.