flickr photo by avrene shared under a Creative Commons (BY) license

It’s tough times still out there and bars are feeling the pinch. There’s plenty of ways to increase revenue and get customers through those doors, from booking live bands to offering food, but one of the most popular seems to be the good ol’ happy hour.

It’s a great idea: you designate a time when you put stuff on sale, the bar fills up and then after it’s over you have a nice full bar where people are hanging out, only by this time the drinks cost full price.

The Upside

Depending on where you live happy hour may take different forms: I’ve seen happy hours advertised that ran for two hours, just half an hour and sometimes lasted an entire afternoon. What exactly is offered can change, too: some places all drinks are half price, others just double your order (leading to some mad arithmetic skills, I’ll tell you). One bar I frequented had everything on tap at a ridiculously low price, around 40 percent if memory serves, while another sold its cocktails at a flat but low rate (Moscow Mules at $7? Sign me up!).

No matter what form it takes, once the word of a decent happy hour gets around you will get butts in seats and you’ll do a thriving trade, at least for a few hours each day. If you run one for a month or two and you’re still having trouble getting people into your place of business your problem probably lies somewhere else and is likely very serious. That’s beyond the scope of this article, though: we’re going to assume that your happy hour hits the spot and you start filling up. Are your problems over?

The Downside

I’d say no: in my experience bars have a tendency to fill up really quickly during happy hour but then empty out right after.

This gets worse if there are places nearby that have their own happy hour right after yours, and there will be: a buddy of mine runs a bar and the first thing he did was scope out the competition and then started offering better deals than them at the same time that they ended their happy hour. This may lead to a bidding war with the other bars around; a war where, just like the ones between nations, everyone ends up a loser. If you start lowering your prices even further it doesn’t matter how many stools you fill: your bookkeeping numbers, more important than any customer count, will be red.

In the end, bars are businesses and happy hours aren’t very cost effective. People drink like crazy for a few hours but at a seriously reduced price. When the clock strikes full-price time they often just leave. You’ve been busy for a bit, maybe even had to hire extra staff just for that short amount of time, but now you’re empty again. Margins are tight enough as they are in the bar business and happy hours are at best a shaky investment.

The only thing that seems to work is having a new attraction that start right after happy hour ends: one bar I worked in had a happy hour till nine, then the band started playing right after. It was a recipe for success, but it was the only bar I knew of that made any real money with their daily drinking deals.

Happy can be Unhappy

Besides financial woes, there’s also the drunks. Now, we run bars, not churches, and every once in a while something will go wrong. We accept it, it’s part of the trade. Happy-hour drunks, though, are something else. People have a tendency to binge hard while booze is cheap and they usually do it on an empty stomach because of the early hour, to boot.

A guy or girl straight from work, who has had no food since lunch, will down five drinks in the space of an hour: this recipe does not a happy drunk make. Happy hours can turn very unhappy in a heartbeat, this reflects badly on your bar as a whole and could lead to people avoiding your place exactly at a time you were hoping to attract some more trade.

Legislation for Lushes

In fact it is the binging aspect of happy hour that has led to a ban in Ireland after several nasty incidents in a country that is usually known for its mellow drinking culture. A similar ban has been in the works in the UK for years but usually gets defeated in parliament by a narrow margin. These happy-hour bans aren’t just a European thing, either: several U.S. states have bans on the books and the chances are small they will be repealed anytime soon: between the health risks, the crazy drunks and the business risk there’s very few politicians willing to stick their neck out for happy hours.

Happy hours are great for customers, they get to drink for cheap. For bar owners, though, it’s definitely a double-edged sword that can cut badly into their livelihood. Some bars manage to pull off great happy hours that bring in huge profits, but they’re few and far between. Think long and hard about the actual benefits before starting your own daily deals. Before you know it you’re subsidizing other people’s binges.

flickr photo by avrene shared under a Creative Commons (BY) license

Fergus O'Sullivan

Fergus has spent a lot of time in bars, both behind and in front of them. He likes to share the expertise gained during this long, fuzzy time with others on the Internet.