Bars ‘breaking the bank’: El Paso bar industry on “decade-long” road to financial recovery

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EL PASO, Texas (KTSM)– In El Paso, the bar industry always thrives, but in 2020, it was last call for everyone.

It’s no secret millions of businesses across the country felt the weight of the pandemic. Reports of dramatic budget cutbacks prompted KTSM to take a close look at pre-pandemic revenue at area bars. The result clearly showed the financial impact virus-related closures and curfews had on locally owned bars.

“Anytime you close a business it’s scary,” Colby Shannon, owner of Gringo Theory in East El Paso said. “We still have bills coming in and fixed costs.”

State mixed beverage receipts provide a snapshot of business shortcomings last year. In 2019, bars turned $170,284,034 in revenue. But financial growth in the bar scene took a dramatic plunge in 2020, with receipts totaling at $88,616,073.

Mixed beverage gross receipts do not reflect food sales but are generally considered to be a good indicator of financial activity for alcohol related businesses in the state.

In the first two months of 2020, bars were on pace to surpass 2019’s revenue, turning more than $13 millions dollars in January and more than $14 million in February. However, once the pandemic hit in March, that was drastically cut in half.

Bars were closed by local officials on March 17, including lounges, taverns, nightclubs and arcades. By March 24, an official “Stay Home, Work Safe” order was implemented, requiring the public to stay home and only go out in public for essential items.

By April 1, El Paso leaders strengthened the order and bars and restaurants could only operate curbside. In April, bars turned less than $380,000 dollars, comparable to $13.5 million in April 2019.

Bar owners said they first had to overcome the closures, while they understood why they needed to shut their doors in the first place.

“Back last year, we were closed three times,” Shannon said. “When COVID-19 first happened, I thought it would be a few weeks thing and now we’re almost at the year anniversary of it and its still here,” Shannon said.

Austin Allen, owner of the Palomino Tavern in the Cincinnati Entertainment District of West El Paso, said many bars jumped on the opportunity to convert to a restaurant in order to open their doors.

“If you’re a bar owner in El Paso County and you don’t have a food and beverage license, you’re still closed per the county,” Allen said.

Bars in El Paso are technically still ordered shut by El Paso County Judge Ricardo Samaniego until the area hospitalization rate declines to 15%. Bars can legally operate by obtaining a food and beverage license, which comes with a strict set of rules.

“We have to maintain a 51% or greater food to alcohol sales and you know that’s an extremely difficult task considering that’s not our primary form of business,” Allen said.

El Paso was also under a curfew which required restaurants and bars operating as restaurants to close for indoor dining at 9 p.m. then that was later extended to 10 p.m., but bar owners said that was another obstacle they had to tackle.

“Now that we’ve been able to open later its a little better,” Shannon said. “Typically in our industry we make our money after 10 so when the mayor put out that we had to close at 9 he pushed for ten which was a miracle, I mean we were grateful for that and that was able to help a lot,” Shannon said.

Public Perspective

Bar owners told KTSM they completely agreed with the initial shutdowns when the pandemic first hit El Paso and non-essential activities were put on hold. However, they said the journey to reopening has been a difficult one to navigate as they watched other businesses opening with fewer restrictions.

“First we do our research on ways to open safely, the last thing we would want is to put our staff at risk or even the customer,” Shannon said.

Since bars are operating as restaurants, they must only allow 50% or less capacity. Patrons must be spaced 6 feet apart, and face masks are required when not eating.

“People would know, okay Gringo is a safe place, it’s a big place, a lot of outdoor areas let’s go there they have the patio when we got the opportunity to open so people come in and it smells clean and its spaced-out people can feel safe,” Shannon said.

Allen said he understands the public perspective when it comes to bars and COVID-19.

“We’re being safe and of course it looks bad if bars are busy,” Allen said. “As we continue to navigate through that, sadly the bar industry is just going to deal with the ramifications of it.”

According to City-County data, bars are at the bottom of the case clusters list, with only 6 reported cases. Meanwhile, general businesses and elderly facilities top the list with 2,490 and 1,906 cases respectively.

“As we’re trying to navigate through this we want to keep positive and we want the public to feel like we’re doing everything we can,” Allen said.

Bar owners said they understand, however, not all bars might play by the rules.

“I experienced the other bad apples as they say but don’t associate all the operators as in one because we operate our businesses as individuals,” Shannon said.

Road to Recovery

While bars are slowly coming back to life, owners said they’re unsure when they’re really recover.

Frank Ricci, owner of the Rockin’ Cigar Bar & Grill, told KTSM the bar industry was hit nearly the hardest as far as businesses go.

“Luckily the federal government kicked in and helped us all out not just our businesses but also the federal government helped with unemployment,” Ricci said.

Ricci said whether people care about the bar industry or not, it’s part of the economy and generates sales tax revenue for the city.

“You know, I might not care so much about another industry but the reality is if that industry goes down, there’s going to be less customers for me,” Ricci said.

Allen said it could even take a decade for bars to recover. Allen said he himself was in three quarters of a million dollars in debt from loans to keep businesses alive.

Now with vaccines on the way and a steady decline in new cases, bar owners said they hope 2021 will at least be a year worthy of saying “Cheers!”

“On the upside, I do think that once we can safely get out of this, I don’t think any industry is going to be stronger than us,” Allen said.

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