The hospitality industries in Sonoma and Napa Counties initially took big hits with the October wildfires as tourists shied away from the region, Santa Rosa lost two hotels, and restaurants lost business at a crucial time of year.
Now, the industry is dealing with the after affects.
“As the economy struggles to recover, there will be ripple effects ad nausea,” said Sonoma County Supervisor Lynda Hopkins. “We’re going to be struggling with this for some time.”
Hopkins was speaking at a town hall meeting Wednesday at The Barlow in Sebastopol, along with business owners and government tourism officials, who came together to address the fires’ impact on food and beverage businesses.
Restaurants in the region were hit hard. October is normally one of the busiest months of the year. Owners sock away revenue during that time for the slower months of the year. Instead of taking in a profit this year, they were giving food away to fire victims.
“I’m worried about the first quarter (of 2018),” said Duskie Estes, owner of Zazu Kitchen and Farm in Sebastopol. “I don’t have what I need to have.”
Estes said she has stopped serving lunch as she can’t afford to staff the restaurant. On top of that, she is worried about the minimum wage increase that goes into effect Jan. 1.
“We’re going to see a lot of restaurants close,” she said.
As a mark of how tourist traffic has dropped, tasting rooms are reporting a 35 percent drop in business, said Aron Levin, owner of St. Florian’s Brewery in Windsor, and the town’s fire captain.
“We haven’t seen numbers like this since the downturn of 2008,” he said.
Napa and Sonoma are known to have competed in the past over tourism related issues. But after the fires, the two counties began collaborating on a cohesive marketing message to combat false media reports that the two counties were destroyed.
The two even put an advertisement together.
“I’ve been in business for 27 years, and I’ve never seen Napa and Sonoma come together on government and business levels like this before,” said Gary Buffo, commissioner, Visit California and owner, Pure Luxury Transportation.
The firm, based in Petaluma, lost $600,000 is business four weeks after the fires, Buffo said.
While businesses can recoup a certain amount of damage from insurance and FEMA, the cannabis industry does not have that safety net, said Nick Caston, board member and spokesman for the California Cannabis Industry Association’s Sonoma County chapter, also speaking at the event.
Although insurance for cannabis businesses is available through small companies, because it is still illegal at the federal level, major insurers won’t touch it, leaving the industry vastly underinsured.
It’s estimated some 30 – 40 cannabis farms have been destroyed in Sonoma and Mendocino Counties. Hezekiah Allen, executive director of the California Growers association, in October told Leafy magazine the broader regional impact will have thousands of farms seeing reduced values, with some having to destroy their crop. “Any airborne contamination is going to stick to those buds. And there’s a lot of toxins in that smoke.”
Caston’s plea is to the state, asking what it can do to step in and fill in the gap for businesses that have sustained damage from the fires.
Cynthia Sweeney covers health care, hospitality, residential real estate, education, employment and business insurance. Reach her at Cynthia.Sweeney@busjrnl.com or call 707-521-4259.