Effects of the Tobacco Products Control Amendment Act of 1999 on restaurant revenues in South Africa--a survey approach.

OBJECTIVE

To investigate the impact of the restrictions on smoking in indoor public places on the financial situation of the hospitality industry.

METHODS

A telephone survey was undertaken of 1011 restaurants, selected by searching public-access Internet databases.

RESULTS

Fifty per cent of surveyed restaurants spent an average of R67 000 (median of R25 000) to comply with the clean indoor air legislation. The capital cost for the remaining 50% of restaurants was zero. The impact on restaurant revenues was limited: 59% of restaurants reported no change in revenue, 22% an increase and 19% a decrease as a result of the legislation. Franchised restaurants experienced a net gain in revenue (34% reporting an increase, 16% reporting a decrease, and 50% reporting no change), although on average they incurred more costs to comply with the legislation than independent restaurants. On average, independent restaurants reported a decrease in their revenues as a result of the legislation (21% reporting a decrease, 13% reporting an increase, and 66% reporting no change). Ninety-two per cent of respondents believed that their restaurants complied with the legislation. The new smoking policies have been well accepted by nonsmokers (nearly 100%) and smokers (87%) alike.

CONCLUSION

Despite the hospitality and tobacco industries' claim that the law restricting smoking in restaurants would have very detrimental financial consequences, the retrospective evidence does not support this.