Sam..very interesting thread. This topic has been beaten to death here in Hawaii.
Its a fine line between what most have said here about just supporting the store by buying products and making sure it at least breaks even. Note to everyone: the lounge being planned is a separate room connected to their shop with air filtration and not just some chairs in the middle of the store. As mentioned earlier, it is a mgmt decision to enforce the rule of supporting the store and not letting people bring in their own. Which I know in the minimum ToH will do. I dont see you or Justin or Chris having any problem telling people about no outside tobacco.
I dont know if our mainland friends realize how expensive real estate is in hawaii vs other parts of the country. The profit margin remains the same on the cigars here as on the mainland yet Hawaii businesses have WAY more overhead especially when it comes to rent. There is no other lounge in Hawaii to smoke in after south pacific pipes and cigars went out of business. In fact, Tobaccos of Hawaii is one of only 2 stand alone tobacco stores on the island. There are only 4 in the whole state that I know of with Tobaccos of Hawaii being the most successful. Most of the cigar business is from wine and liquor retailers using cigars as additional business. With our high cost of business here in Hawaii and a 50% cigar tax which leads to lots of lost cigar sales to the internet, its easy to understand why there are so few tobacconists left. 15 years ago, there were close to 10 just on Oahu. South Pacific Pipes and Cigars went out of business in part due to some people abusing their lounge and not supporting the business but it was mostly poor mgmt by the owner. That being said Tobaccos of Hawaii has much better business practices.
Another problem is that there is homeless population in the area and they come into their shop, drop a handful of coins on the counter and buy a cheap cigar. I remember one time Justin had to light a cedar spill to get rid of the smell after a homeless guy bought a cheap cigar!
I dont know if I would want them hanging out in the lounge.
I have talked to a lot of the regulars on the cigar scene here and they cant wait for the lounge to open. I have mentioned to them the possibility of a fee and they seem to be fine with it. I think they appreciate just having a place to hang out. I would say that the fee should be reasonable. Im sure there is a portion of guys who wouldnt mind paying a modest membership but might not be able to afford or justify to their wives a steeper price!
The tough part is getting it right on the first try..I dont envy the decision you folks have to make.
There has been some good suggestions about other ways of making the space profitable like offering drinks for sale (which you already have). I think some other things for the lounge that would be nice to have free if there is indeed a membership fee are free coffee, wifi, movies, etc. Might be able to have events in the lounge like pay per view mma, etc.
Also remember having the lounge space will allow you to have events which you currently dont have. I tried to get events going with South Pacific Pipes and Cigars. We did a couple and they made a nice chunk of money in the few hours of their events. The profits from the event could help offset the rent on the lounge. In fact, if you set up a monthly event on the same day the guys could plan around it and you would get even better participation. Also a great way to introduce new lines or cigar releases.
Another thing that needs to be addressed are the tourists. We always have visitors to the islands and there will always be that portion who like to sit down and have a smoke. With your proximity to Waikiki you will see a lot of that.
ToH is good people and I look forward to the new lounge and the great camaraderie that Im sure will follow!
