San Francisco Chronicle - (Sunday)
Bay Area bars hoped for a post-COVID renaissance. That hasn’t happened
The pandemic permanently changed how much people like to go out drinking, bar owners say
When San Francisco lifted COVID restrictions on indoor bars back in spring 2021, Tim Mullins assumed things were about to get back to normal. By that point, he’d taken a major financial hit while keeping his Sunset District bar, the Four Deuces, closed for indoor drinking. He was looking forward to making a profit again.
A year and a half later, the Four Deuces still isn’t turning a profit.
“People aren’t going out like they used to,” said Mullins. “They got used to staying home.”
Across the Bay Area, many bar owners are reporting a similar outlook. Crowds aren’t returning to bars in the volumes seen pre-COVID. When people do go out, they’re ordering fewer drinks. It’s made business tough for the region’s publicans, who believe that the pandemic instilled permanent new habits in many former bargoers.
According to a survey by the San Francisco Entertainment Commission, 77% of bar owners said their sales were down in 2022 compared with 2019, the year before the pandemic. That’s a bleak figure, though bars seemed to be showing incremental improvements: 45% said sales were up in 2022 compared with 2021, while 19% said sales remained about the same during those two years.
The effects are highly neighborhood-dependent, said Ben Bleiman, who owns two bars and is the founder of the San Francisco Bar Owner Alliance. Downtown San Francisco is struggling, but residential areas like the Marina are doing much better, he said. His Mission District bar, Dr. Teeth, is down only 10%-15% in sales since the pandemic began, while his Nob Hill spot California Jack’s (formerly Soda Popinski’s), is down 60%-70%. Some neighboring Nob Hill tenants have gone out of business, Bleiman added.
“Things are bad. Very bad,” he said. The lower traffic has made it harder to attract employees. “Where they used to make $250 a night in tips, they might be making $60 now,” Bleiman said of California Jack’s.
With many workers still absent from offices, downtown bars are not seeing the postwork happy hour crowds that they got pre-pandemic. It used to be that bars downtown “would pay their rent on Fridays,” Bleiman said — the end of the week was their busiest time. “Now, Fridays basically don’t exist.”
He thinks California Jack’s will survive, though, largely because he was able to renegotiate a more favorable lease with his landlord.
The Rumpus Room, at Sixth and Market streets, could count on a packed room at happy hour every weekday before COVID. Now, said owner Roxzann De Marco, business is dependent on whether there’s a show at the nearby Warfield Theatre. “It’s always busy no matter what if there’s a show,” De Marco said.
December used to be filled with office holiday parties at the Rumpus Room, said De Marco, but she hosted just five last month. The one bright spot: She sees more tourists since the Rumpus Room is one of the only bars that still stays open until 2 a.m. near the downtown cluster of hotels.
Downtown Oakland has changed, too. “The early crowd downtown has vanished,” said Matt Reagan, owner of the Kon-Tiki bar. “We don’t have the foot traffic from Oakland office workers and BART commuters stopping by on their way home. Meanwhile, the new apartment buildings are struggling to fill units.”
With such slow early hours, Reagan decided to move the bar’s kitchen opening from 4 p.m. to 5 p.m. each day. He couldn’t justify the longer hours for his kitchen staff “for just a couple walk-ins.”
Revenue at the Kon-Tiki is actually similar to what it was in 2019, Reagan said, but the bar is making less money because food, liquor and other costs have “skyrocketed.” Looking at sales figures, he noted that customers are ordering more food and fewer drinks. Sales of the bar’s most popular food item, the burger, are up 5% from 2019, while sales of zombies, one of its most popular cocktails, are down 5%.
Despite these widespread reports, a few lucky Bay Area bars are thriving. In December, the Hotsy Totsy Club in Albany had its best month in 13 years, said owners Michael Valladares and Jessica Maria. The bar started to feel like its old, pre-COVID self again around June 2022. Now, “on weekends the place is wall to wall,” said Valladares.
The owners attribute their success to being a neighborhood bar in a residential area that’s always attracted a community of regulars. The Hotsy Totsy was never reliant on the after-work crowd from nearby offices. “I believe that has a lot to do with the kind of bar that we are,” Valladares said, “a niche, local bar that offers something personal.”
Some elements are different; the Hotsy Totsy used to see a surge every night of industry workers getting off their shifts at nearby restaurants. That particular crowd has waned, Maria said. Still, overall the bar is “back to normal on numbers — and just the feeling in the room,” Valladares said.
For the bars that are straining to make ends meet, “the rents have to adapt,” said Bleiman, of the San Francisco Bar Owner Alliance. Many of them may not be able to survive if their expenses aren’t reduced. Landlords that don’t adjust their expectations, he believes, will be left with vacant buildings. “The smart landlords will sit down immediately and renegotiate leases,” Bleiman said. “The dumb ones will end up in court.”
Mullins, the Four Deuces owner, hasn’t taken a salary for himself in three years. Until the last four months, his operating expenses outpaced his revenue; now, at least, he’s breaking even, though he’s about $200,000 in debt. He’s been trying to come up with creative solutions to drum up business, like promoting his bar’s dart league and starting a karaoke night.
He has no idea what to expect going forward.
“Maybe in two years I’ll be thinking, ‘Wow, good thing I kept this place.’ Or maybe not,” Mullins said. “I think there’s a lot of people in exactly the same spot I am: waiting, trying to get through.”