Smoking Ban by pptfiles

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									                                    Smoking Ban
                                        Financial Plan

                                  Sadiq Jaffer & Tim Retout


Costs

Capital Expenditure

Implementation of the policy will require additional non-smoking signs for those areas
where smoking is currently permitted. It is expected that the cost should not exceed £100,
to be taken out of the existing capital expenditure budget[1].

Regular Costs

Monitoring the ban may result in more work for Security staff. However, it is not expected
that extra staff will need to be hired to enforce the ban, at least in the long term.

Effects on Income

Ents

The Union's core market contains a non-trivial percentage of smokers; it is hoped that
smokers will not be put off from the Union entirely as a result of the ban, with more than
one smoking area being provided. The risk is, that groups of friends will choose the place
they go out based upon the preferences of the smokers in the group.

However, it is important to bear in mind that smokers are still a minority group among
students. Many of the kitchens in Rootes, to take an example, choose to be non-smoking.
Students in on-campus accommodation who currently socialise are likely to attend the
Union simply by virtue of its proximity.

Consideration must be taken of the image that a ban on smoking would project to potential
customers. As stated in this year's budget report[1], there is a “lack of interest by students
in our building (perceived as tired looking).” Currently, there is very little to set the Union
apart from commercial clubs in Coventry and Leamington (except for the higher capital
expenditure that those venues can enjoy). A smoking ban may actually increase
attendance at Union Events, if the students develop a perception of the unique relationship
that exists between them and the Union. A whole section of the student population that
currently avoids the Union, because of the smoky atmosphere and negative health aspects
associated with passive smoking, may well be encouraged to increase the frequency with
which they go out.

Bars

There is a possibility, if attendance at the Union falls following the introduction of a ban,
that bar revenues will also fall.

In the case of the Graduate, there is a valid concern that some current regular customers
will choose not to attend, should a ban on smoking come into effect.
It should be noted that a smoking ban could potentially create a shift in the demographics
of Union customers. It is likely that sales of soft drinks would increase to offset any decline
in sales of alcohol, further it should be noted that the profit margin on soft drinks is higher
than that of alcohol beverages, due to a lower taxation.

F&B

One of the more obvious risk factors associated with the introduction of a smoking ban is
that revenue from the highly successful Rococo will decline due to the large proportion of
smokers currently frequenting that outlet. It is anticipated that there will be an increase in
non-smokers at Rococo, but that this alone may not compensate for the loss in revenue.
Following the example of Xanana's move away from smoking, Rococo could be re-
targeted to better compete with existing University outlets. It should be noted that the
budgeted bar revenue from Xanana's has increased by 26% over the last two years, and
the budgeted catering income has increased by 50%[1].

The change in environment and appeal over the whole Union could drive an increase in
demand for food, which can be met by innovative measure, notably in Rococo, where the
opportunity exists to offset the potential decrease in revenue from smokers by offering a
wider selection of food.

Conclusion

It is noted that there could be genuine risks associated with the implementation of a ban
on smoking but that it is likely that these could be overstated. While accurate figures and
models of relevance are hard to come by, a careful consideration of the qualitative effects
on the perception of the student body suggests that, properly handled, a smoking ban
could have a positive effect.

Should there be any surplus from an increase in revenue following this ban, the authors
would recommend allocating up to £250 to lobby the University to ban smoking in its own
outlets.

References

[1] UWSU Detailed Budget Report 2005-2006
http://www.sunion.warwick.ac.uk/council/Executive%20(papers)/05-
06/W0/Financial%20Update/2005.6%20%20budget%20report.doc

[2] UWSU Strategic Plan 2004-2008
http://www.sunion.warwick.ac.uk/council/Executive/04-
05/T2W2/Strategic%20Plan/University%20of%20Warwick%20Students.doc%20strategic%
20plan.doc

								
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