The gay bar: Can you make money running one?

Its riotous past and uncertain future.
June 29 2011 6:47 AM

The Gay Bar

Can you make money running one?

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Odyssey Bar
Odyssey bar in Vancouver closed in 2010. The sign still stands. (Nezua via Flickr.)

Running a bar is a tough business in the best of circumstances. Overhead is high, customers fickle, and staff transient. Between 1997 and 2007, the number of drinking establishments in the United States fell by 11.1 percent, from 52,825 to 46,924, according to the U.S. Census Bureau. Gay bars have an even tougher road to profitability. Damron, which has been keeping track of gay bars since 1964, showed a 12 percent drop in their number between 2005 and 2011, from 1,605 LGBT bars and clubs to 1,405. Can a bar make money when it's asking 90 percent of the population to stay away?

Until somewhat recently, the answer to that question was yes. Gay people were so desperate for a place to gather that they would patronize just about any bar that permitted their presence, no matter how grudgingly. Operating costs were kept in check because gay bars could be situated in out-of-the-way places and required little by way of interior decoration. Indeed, an unglamorous address and a lack of frills often added to a bar's frisson. In 1977, Brandon Judell wrote about the then-popular backroom bars—that is, bars where gay men would go to have sex—for gay magazine Blueboy. * He credited "good old capitalism" as the reason for their success:

Before backroom bars, men were being erotic with each other in trucks and alleys, on deserted hills, and in warehouses. Amidst all those glorious, sweaty entwinings, there was always the risk of being hurt by someone or something. … So why not open up a place. … Serve beer. Have a jukebox. It will take very low overhead to supply all that dangerous eroticism of the old hangouts, and the profit will be huge and quickly gathered.

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The contemporary bar owners I talked with did not describe their profits as "huge and quickly gathered." Today's bar owners run their businesses at a time when gays feel more comfortable spending time in all kinds of places, when the AIDS crisis has made backroom hookups far less common, and when gays are as likely to meet on an iPhone app as at a bar. Architect (and former Slate intern) Mark Stoner, who devoted a year of full-time labor, 18 months of part-time work, and around $200,000 to opening Seattle's Pony, told me the bar brings in around $350,000 in annual revenue, but the fixed costs—labor, insurance, utilities, advertising—are surprisingly high. (Stoner pays thousands of dollars a year to ASCAP and BMI just to play music in the bar.) He says the profits are "enough to live on but no more. Running a very small bar [Pony's maximum capacity is 113] is not what you'd want to get into to make a lot of money. To make a lot of money, you need a much larger bar where you can get huge volumes."

Bars catering to lesbians face even greater business challenges, which is why there are so few of them. Many "gay bars," especially outside the major urban centers, attract both male and female customers, but in big cities, far more bars cater to gay male patrons than to lesbians. According to the bar listings in the 2011-12 edition of the Gayellow Pages San Francisco has one lesbian bar, 24 indicating a mostly gay male clientele, and seven drawing both gay men and lesbians; Atlanta has two lesbian bars, 12 for gay men, and eight mixed; Manhattan has two lesbian, 28 for men, and 13 mixed; and Seattle has one lesbian, four for gay men, and six mixed.

Lesbians' nesting instincts mean they hit the bars less frequently than gay men. Maggie Collier, who runs Maggie C Events, a New York nightlife promotion company, told me: "Women tend to go out seeking a partner. When they find one, I don't see them for two years. Then all of a sudden they're out—you know, when they break up. You see them every single week at every single party until they find the next [girlfriend], and then they disappear, and the pattern continues." She adds, "Gay men go out a lot more because they cruise. They're more interested in finding fun."

Before RuPaul Andre Charles was known as RuPaul by the world, he was making New York's Pyramid Club an interesting place.
Before RuPaul Andre Charles was known simply as RuPaul, he was making New York's Pyramid Club an interesting place. (Linda Dawn Hammond.)

In the past, gay men and lesbians were more apt to visit the same bars. Before Stonewall, a mixed crowd could provide cover—if the police raided the place, men and women could start to dance together, and a friend from the bar could act as a "beard" at family or work events. But even back in 1959, They Walk in Shadow author J.D. Mercer wrote, "Male and female homosexuals seldom frequent the same places. The one group resents the intrusion of the other rather more than they dislike the advent of sight-seeing 'normal' visitors." Today, women might take advantage of the cheap, strong drinks available in gay bars, but when it's time for dancing and romancing, they'll head off to the no-man's land of the girl bar. Which means that gay bars aren't just limiting themselves to the gay community—often, they're limiting themselves to one-half of the gay community.

How gay bars have responded to the particular challenges of their industry has varied over time. Traditionally, lesbian and gay bars situated themselves in remote locations, even though that meant potential customers had to have the means and motivation to get to them. In a poem from the late 1970s, Chocolate Waters wrote, "The Trouble With Women's Bars in This Town/ is that they're all across the street from/ the Pepsi Cola Bottling Company or/ Joe's Electrical Heating Service." But there were financial reasons to set up shop in insalubrious parts of town: Mac McCann, who operated several lesbian bars in the Midwest, fired off an angry response to the feminist newspaper that published Waters' poem in which she noted that: "Bars don't grow on cozy corners. To open a bar, isolated from the Pepsi Colas and Joe's Electric Shops of the world, would cost a fortune."

It wasn't just the cheaper rents of industrial zones and rough neighborhoods that attracted gay-bar owners to those locations. They also offered a kind of protection for patrons. The last thing closeted gay men and lesbians wanted was for co-workers, family members, or potential blackmailers to wander into their sanctuary—nor did they want to be seen coming and going from such establishments. (Flash-forward to today when bar owners and nightlife promoters told me that posting photographs on Facebook showing customers having fun at their events is the best marketing they can do.)

Grim locations were also chosen to avoid a different kind of trouble. In Gay Bar, her memoir of running such an establishment in the 1950s, Helen Branson wrote that "If an owner of a gay bar does not want the harassment and complaints from the neighbors, he tries to choose a location that is not very elite." But out-of-the-way spots came with a price—McCann described her customers' cars being vandalized and burglarized and other patrons being assaulted.

These days, urban gay bars tend to cluster together in "gayborhoods"—New York's Greenwich Village and Chelsea, San Francisco's Castro and SoMa, or Dupont Circle in Washington, D.C.—just as sports bars tend to proliferate around stadiums. In Seattle, Pony is just steps away from another gay bar, the Madison Pub, though it is a couple of blocks from Capitol Hill's main entertainment strip, home to Seattle's liveliest bars and clubs, both gay and straight. Stoner believes that being close to other gay bars, and to other nightlife spots generally, is a big plus. In cities, people like to bar hop, and they're more likely to go out if they can take in a variety of venues without having to deal with driving from place to place.

Pony entrance warning.
A sign on the door of the Pony bar in Seattle. (June Thomas/Slate.)

Though Stoner's bar is close to the heart of town, Pony doesn't downplay its gayness. A sign on the front door reads, "ATTN: THIS IS A GAY BAR, A VERY GAY BAR. IF YOU AREN'T A QUEER OR AN ADMIRER, DON'T ENTER." Manager Marcus Wilson explained why Pony has chosen to so clearly ward off uptight straights. He noted that "gays and lesbians have gained politically in the last 20 years. The majority feel that the key is to be as inoffensive as possible. They want to trim off the edges, look or sound inoffensive. When gays were outsiders, gay bars could have more color and characters—the leather daddy, transpeople. Gay bars have discouraged that. Now they're going for homogeneity in the look of the place and in the music. They want to be innocuous. Some gay bars look and feel like airport lounges, with nothing to offend—or to stimulate. Pony wants to challenge that."

As little as 15 years ago, certain Seattle streets were lined with dive bars. Now they're almost all gone. Pony has tried to re-create that casual vibe—"a place where people can relax and naturally be themselves," as Stoner described it—and married it with a gay sensibility. How gay? When I visited Pony on a Friday night, there was a go-go boy stripped down to his skivvies dancing on the bar. A video screen showed oiled-up naked guys wrestling, and the walls are covered in beefcake photos taken from vintage physique mags. Many of the beefcake shots are full-frontal, and just a few of the penises are covered with carefully placed pink triangles. Stoner explained that Washington state law prohibits pornographic images in bars, so before Pony opened, an inspector from the Liquor Control Board came by to inspect the photographs to distinguish the arty from the porny.

Still, it's clear that all these symbols are being served up with a camp wink—this isn't your uncle's backroom bar. The bathrooms, for instance, are marked MEN and BOYS, but women are welcome at Pony. (When my friend Susan and I attended a Sunday afternoon tea dance, a guy she had met briefly at work came over and invited us to join his group.) The windows of the main bar are covered with boards bearing cutouts of the bar's logo—but the darkened windows aren't a necessity, as they would have been a generation ago. Now they're an aesthetic choice, a stylized nod to history.

Stoner's bar pays homage to the gay-bar tradition while taking advantage of the opportunities bars of a previous generation didn't have. He still must deal with a gay clientele, however, and according to some of the bar owners I talked to, they present a continuing challenge. Elaine Romagnoli, who once operated a straight bar and restaurant on Long Island in addition to a number of Manhattan lesbian bars, told me the main difference she noticed between the clienteles was that "straight men spend a lot more money. They tip better. They're used to it. Of course, they make more money [than women]." Brett Thomas, who owns three gay-friendly straight bars in Eastern Iowa in addition to Iowa City's only gay bar, says gays and straights drink differently: "A gay will come in; they'll try to figure out how they can get the most booze in that glass for the lowest price. Straight people don't plan it out as much as gay people do." Stoner says that in gay bars, customers expect cheap, strong drinks in large glasses. In Washington state, all bar owners pay the same wholesale price for booze, but unlike in the cocktail lounges sprouting up around Seattle, Pony can't sell dinky drinks for $10, which cuts into Stoner's profit margin.

Perhaps, then, it's the drinking habits of gay bar-goers, as much as growing tolerance among straight ones, that explains the increasing integration of the gay and straight worlds in today's bar scene. (The number of mixed straight-gay bars and clubs appearing in gay-travel-guide publisher Damron's listings increased by 42 percent, from 352 to 502, between 2005 and 2011.) Recently, a new "can't we all just get along?" business model has appeared, one that places no restrictions on the potential customer base. In Seattle, I met with Erin Nestor, the proprietor of two bars, the Bottleneck Lounge and Tommy Gun, which had opened only a few days before I visited. When I asked if her places were gay bars, she told me, "I'm not interested in putting myself in that niche. I'm incredibly proud to be a member of the gay community, and I know that gay bars were pivotal in our history, but that's not for me. I'm happy to serve whoever's in my seats."

On the night I visited Tommy Gun, the seats were occupied by a crowd that looked as though it had stepped out of a diversity training video: a table full of what appeared to be gay men, a lesbian couple, two straight couples, and what seemed to be a group of straight women. As of early June, the property next to Tommy Gun is the new home of CC Attle's, an established bar that caters primarily to older gay men. Nestor is keen to "extend the entertainment strip," and her this-place-is-gay-owned-and-gay-friendly-but-not-a-gay-bar attitude feels like a smart business move. Some of CC Attle's customers will drop into Tommy Gun and feel welcome, but so will other random Seattlites wandering down East Olive Way, bloggers looking for a place to hold a meet-up, and cocktail connoisseurs of all persuasions. (Tommy Gun serves a mean Chicago Typewriter—its specialist drinks are all named for euphemisms for its namesake weapon.) Nestor's other bar, Bottleneck, is a neighborhood place far from the strip, so it would be financial suicide to limit the clientele (at least in a city with lots of other options). But that doesn't mean Bottleneck is closeted. Nestor has promoted and hosted fundraisers for gay causes, and every Gay Pride Day, Bottleneck offers a "blessing of the hot dogs" and doles out free wieners.

Though they've taken different approaches, enterprising owners like Stoner and Nestor have found ways to make money running bars. Other gay-bar owners go into the business looking for a different kind of reward. In 2008, financial consultant Annetta Budhu took an ownership interest in Rubyfruit Bar and Grill, a 14-year-old Greenwich Village lesbian bar that had fallen on hard financial times, because she couldn't stand to see it turned into a straight restaurant. Shortly after she had transformed the venue into the RF Lounge, Budhu told bar mag Go!, "I'm only doing it because I care about the community. … The drinks at RF will not be expensive, just a little bit more than what I paid for them, in order to carry the business. It's not a moneymaking venture; it's a labor of love."

Correction, June 30, 2011: This piece originally misspelled Brandon Judell's name. (Return to corrected sentence.)