After finishing another shift of bar tending at a campus watering hole, it finally dawned on me that the economics involved with bars is one of a kind. Bars operate in a market that is far from being perfectly competitive, they offer basically an endless supply of alcohol while demand is dependent on price and time of year.
First off, bars in close vicinity to Ohio State's campus do not operate in a perfectly competitive market. Ohio State students have a wide variety of bars to choose from that are all located within a 10 minute cab ride or a 15 minute walk. Students can go downtown to the arena district, or stay on campus at the likes of the Gateway bars, Panini's, The O, Too's, Senor Buckeyes, Out-R-Inn, Little Bar, or head even further north to the bars around Sloopy's. None of these bars offer the same price for their product or atmospehere to their consumer, thus it is not perfectly competitive market. Bars in the Arena District tend to be more upscale that attract an older clientale which also means higher prices for drinks. However, on campus the price of your typical domestic beer tends to be right around $3 wherever you go. Although the price may be somewhat equal, the atmosphere at each bar is definitely different. There are bars that are also packed full and then others that draw a much smaller crowd. Some are 18 and over while others only allow 21+ to enter. Some bars focus on having lots of Tvs showing all sports, others rely on playing good music nightly, and others stick to darts and billiards. No matter your likes or dislikes, Ohio State offers a bar that is right for you.
I have worked at a bar for over two years now and have never seen one run out of a supply of alcohol. However, bars are in the business of making money so having an almost endless supply of alcohol is critical. There are restrictions to this supply which are when bars open and close. Most bars on campus open around noon and the last possible time to receive a drink is last call at around 2:15AM. Demand for this alcohol changes on a nightly basis depending on the time of the year. Thursday through Saturday are typically the busiest nights throughout the year no matter the season. During OSU football season, demand peaks right before the game and then immediatley following. Spring quarter is by far the busiest time for bars because of the weather and almost any night of the week can get busy. I work at a bar with a large outdoor patio so we see a large influx of consumers during gamedays and spring quarter. During spring, people will walk by and see a mass of college students drinking and having a great time and feel the urge to come in and have a drink which shifts our demand to the right or increases. Another key factor in demand are nightly specials. "What are your specials" is the first thing I hear out of every patron that is not a regular of my bar. From experience, I have realized that no matter what I tell them they will get the "special" of the night even though it really is not that great of a deal outside of any bar. Everyone knows that you can go buy a 12-pack of your favorite beer for around a buck a beer but that same beer will run you anywhere between $3-$4 at your favorite bar. This increase is so that the bar can turn a profit so you are basically paying for the atmosphere. When bars get extremely busy, it seems that demand breeds more demand and consumers are willing to pay these prices regardless and are usually willing to tip more to receive their alcohol in a timely fashion.
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Reading your post also made me wonder what the total revenue for the year is made during the three quarters that the Ohio State University is in full function, compared to summer (and the few that are left during the summer). I am sure there is a huge difference in revenue. It also got me thinking too, whether it might be better for a bar to completely shut down during the summer or stay open with a lot less workers. Obviously not every bar could shut down for the people who stay, but it might vary between the individual bars.
ReplyDeleteSome of the bars could also have patrons who are experiencing the snob effect. I'm not sure this applies to many campus bars, but there are a few bars in larger cities (my experience is in Chicago) that see this effect. People are willing to wait in line for hours, and pay exorbitant amounts of money for a drink that they could have cheaper anywhere. They are willing to pay this extra money because drinking at bars like that makes you a somebody. In fact, many downtown bars establish imaginary entry limits, just to create a line outside. This line serves as a signal to people on the street that this is a desirable place to be, a place to wait to get in and pay $6 for a beer. Hence the snob effect.
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