Can happy hour attract people downtown again?

Before the pandemic, before remote work and empty office buildings, when the clock struck 5 p.m., those eager to take a load off would flock to bars and restaurants to enjoy some post-work drink and food specials. But even before stay-at-home orders existed, happy hours weren’t always on the menu for everyone. 

In seven states, in fact, happy hours are illegal, and in at least 20 others, they’re restricted. But now, a few of those states are revisiting their bans in the hopes of luring people back downtown.

One of those states is Massachusetts. Lawmakers there think it’s time to do away with a 1984 law banning discounted drink specials. An amendment introduced this summer would overturn the statewide ban, granting local governments the right to allow alcoholic beverages to be sold at a discounted price during specified time periods. The proposal passed the state Senate in July but now awaits approval from the House of Representatives and Gov. Maura Healey.

Lawmakers in support of expanding happy hours laws have framed the policies as a way to revitalize downtowns that have seen less foot traffic since the pandemic as more residents and tourists stay home.

“In off-hours or slow seasons, sometimes, all a customer needs is the extra incentive of a cheaper drink and appetizer to get in the door, boosting revenue for these businesses,” said Colin Hennessy, a research analyst for state Sen. Julian Cyr, the amendment’s sponsor, in an email to Route Fifty.

Massachusetts was the first state to effectively ban happy hours. The law was enacted after Kathleen Barry, 20, tragically died in a car accident. She was part of a group who had won free pitchers of beer after winning a “name that tune” game at a restaurant in Braintree, about an hour south of Boston.

A slew of high-profile drunk driving accidents in the 1980s, such as Barry’s, made lawmakers concerned that happy hours encouraged people to drink more, thus increasing the risk of injuries and death while driving, said Jarrett Dieterle, a resident senior fellow at the think tank R Street Institute. 

Alaska also prohibited happy hours in 1984. North Carolina followed the next year, with policymakers allowing establishments to offer discounted meals, but requiring reduced alcoholic drink costs to last the whole day rather than a specified timeframe. Rhode Island banned happy hours in 1985 as well.

Policymakers and advocates for safer drinking practices also cite the risk of overconsumption and substance use disorders that could be worsened without regulations on how and where alcohol can be consumed.

But the research community at-large, Dieterle said, has not found a direct correlation between happy hours and higher rates of fatal car accidents or other injuries and health risks. The lack of evidence suggests people who are involved with, for instance, DUIs are likely binge drinkers, rather than the casual happy-hour attendee.

By loosening happy hour restrictions, “policymakers can help restaurants get more people in the door,” and generate more revenue, Dieterle said. Restaurants already have a tight profit margin and are facing even more financial pressures with rising food costs. That’s on top of legislative pushes to make restaurants pay their employees minimum wage, instead of relying on tips as a payment model.

These factors mean many establishments are struggling to turn a profit. A happy hour, however, could help close those financial gaps. Hennessy, the research analyst for the state senator, said one operator in support of the proposed change in Massachusetts stated, “I’d rather sell 100 drinks for $10, or $1,000, than 20 for $16, or $320.” 

The Massachusetts Restaurant Association, however, is opposed to the change. Happy hours increase establishments’ liquor liability insurance, for example, and disproportionately impact small and local establishments, Stephen Clark, president and CEO of the association, said in an email to Route Fifty.

“There is no protection for restaurants that have no interest in participating in happy hour. Once one establishment opens that door, every other operator in a city or town will be forced to follow. Neighboring cities and towns will be forced to compete as well,” he wrote.

But states are pouring support behind increased happy hour allowances. Indiana, where happy hours have been illegal since 1985 in an effort to reduce drunk driving, repealed its ban earlier this year. As of July, bars in the state could start offering discounted drink specials to patrons.

And Pennsylvania Gov. Josh Shapiro signed a bill in July to increase the number of hours establishments can host happy hours. Under the new law, restaurant and bar owners can host happy hours for 24 hours a week, up from 14 hours.

They can also advertise discounted meal and alcoholic beverage specials, and offer patrons up to two drinks included with the price of admission for certain events like a New Year’s Eve Party, Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association, told Route Fifty in an email.

“In general, what I've heard … is that Pennsylvania's liquor code sometimes acts like a set of handcuffs when it comes to marketing and establishment [because it] is often limited and state-controlled,” Moran said. “These changes basically add a few more tools into the toolbox. Not everyone will use them. But many will find something that they can use.”

“There are a lot of laws that have been on the books for a really long time, and there’s been more of an effort in recent years to reevaluate … everything from [happy hours], alcohol delivery, to retailing and where alcohol is sold,” Dieterle said.

Some municipalities, for instance, have started to allow people to carry alcoholic beverages through downtown areas, which are often called entertainment districts, he said. The “sip and stroll” model could even have a bigger economic impact than expanded happy hour laws.

States and cities should consider how to leverage looser alcohol consumption policies to draw more people to downtown areas, he added. Policymakers could, for instance, allow establishments to host happy hours in entertainment districts, and partner with ridesharing companies to streamline drop-off and pick up locations to ensure consumer’s safety.

With the rise of rideshare apps and reliance on public transportation, patrons have safer and more effective ways to travel home after enjoying a drink or two, added Hennessy.