One year later, LGBTQ2S+ businesses are still struggling to stay afloat

Queer- and trans-owned businesses were some of the hardest hit by COVID-19. Now, their survival hinges on how vital customers think they are

For about two weeks last fall, there was some normalcy at Evolution Wonderlounge in downtown Edmonton. Drinks flowed, and audiences whooped, hooted and offered tips to local drag queens as they performed shows for the small crowds permitted in the bar by Alberta’s health authority. This sort of life hadn’t been present at the bar since before the pandemic. But after paying the entertainers and the staff—all of whom counted toward the bar’s 40-person limit—there wasn’t any profit to be had.

For owner Rob Browatzke, the pandemic has largely been spent at home, reading and binging TV shows while his bar sits empty. It was only going to be a few weeks, at one point. Then a few months. But now, more than a year after first closing, there’s tension in his voice, the sort you get when understating something for comic effect.

“If I had known last March that we would be having this conversation 16 months down the road and [we’re] still not open, I think we probably would have been in a much better position to have just closed for good right then,” he says.

Don’t get him wrong: he was excited to reopen, all things permitting, on July 3. But if Browatzke had closed permanently early in the pandemic, and opened a bar from scratch on the other side he could have saved himself his current fate: Evolution Wonderlounge survived the pandemic, but at a cost.

“We are reopening with a terrifyingly massive amount of new debt that honestly I don’t know how to repay,” he says.

Though quick to praise federal subsidies (including one that his landlord applied for to help reduce rent), Browatzke says one of the loans has a 10-year repayment term, and in the worst-case scenario, the debt will last longer than the business. That’s what being one of the lucky ones looks like.

“There’s no question that LGBTQ2S+ businesses were hit differently during COVID-19 than businesses overall.”

In some corners of the business world, the pandemic sent profits soaring—think dollar stores, grocery retailers or Amazon. But others, especially in hospitality and non-essential retail, have run into problems, leading to the demise of businesses large and small. A recent survey from the Canadian Gay and Lesbian Chamber of Commerce (CGLCC) and the accounting and consulting firm Deloitte found about 40 percent of Canada’s LGBTQ2S+-owned businesses are in accommodation and food services or retail trade. In short, there’s no question that LGBTQ2S+ businesses were hit differently than businesses overall.

Last year around this time, Xtra explored what was then an unfolding issue: the fate of LGBTQ2S+ businesses during the pandemic. There was no reopening timeline and a lot of unanswered questions, and several businesses shared their experiences with us. Now, with vaccines in arms and tentative reopening plans 16 months after the world shut down, we decided to catch up with these LGBTQ2S+ entrepreneurs to see how things look after the most challenging year in business in recent history.

 

All the businesses that spoke to us last year are still open, but their experiences have varied widely. Where there is consensus, however, is that the coming months are going to be vital for LGBTQ2S+ businesses—and their survival hinges largely on how vital queer and trans customers consider them to be.

Think back to early in the pandemic, when workers at places like grocery stores and fast food joints were lauded as heroes for working despite the pandemic. Mere months later, stories abounded about “hero pay” disappearing or customers becoming unreasonable when asked to wear masks; it showed how quickly what seemed like a new way of thinking was shed, even before the pandemic ended. Will the other lesson of how fragile LGBTQ2S+ businesses are and how much they need support be forgotten just as quickly?


While there has been support for specific types of businesses, and for certain groups of business owners, LGBTQ2S+ businesses have been sidelined, Darrell Schuurman, co-founder and CEO of the CGLCC, says.

“With the recent [federal] budget, there’s mention of that, so we’re waiting to see what that looks like. But the challenge is that in the last year or 18 months, there’s been no direct, specific support mechanisms for LGBT businesses,” he says.

According to the recent CGLCC-Deloitte survey, which looked at 192 LGBT+-owned, -operated and -controlled companies, 91.6 percent of businesses are classified as “small” by Statistics Canada (1 to 99 employees) and they tend to be newer than other businesses. This means that securing funding can be a challenge. But Schuurman notes they can also be more flexible: he thinks that because small businesses tend to be more agile, there is a responsiveness they’ve been able to have that others have lacked.

“There’s been no direct, specific support mechanisms for LGBT businesses.”

The CGLCC has also been working with researchers from Carleton University on a forthcoming study exploring how LGBTQ2S+ businesses have specifically been affected by the COVID-19 pandemic. It focuses on six large North American cities: three in Canada (Montreal, Toronto and Vancouver) and three in the United States (Los Angeles, New York and San Francisco). It will look at how LGBTQ2S+ businesses survived the pandemic, but also how gay villages fared.

Dana Brown, dean of Carleton’s Sprott School of Business, said about 60 LGBTQ2S+ businesses participated in a “very long” survey, and about half participated in an interview with researchers. But there’s a caveat.

“Most of the people who answered our survey were actually not working in those sectors that were most heavily affected by COVID-19,” she says. Instead, they worked in fields like technology or consulting. Yet there were some findings relevant to the hardest hit—particularly retailers. Some of the companies answering the survey were able to “leverage technology and remote connections with [their] customers and so markets grew in new ways as a result.”


Don Wilson of Little Sister’s Book & Art Emporium says there’s no shortage of concern among his customers. “‘You’re still here?’ You know, we hear that daily, because a lot of small places went by the way of the wind, and we just celebrated 38 years.”

Last year, Wilson told Xtra he was confident his Vancouver boutique wouldn’t close, and it hasn’t. In fact, the physical storefront has been open all through the pandemic, as local regulations permitted it to be. Though he missed out on opportunities to sell to tourists, by last September, sales started returning to pre-pandemic levels. That’s a good thing, because Little Sister’s didn’t benefit from government funding.

“They never allowed us to have any of it, because they said we didn’t show the decrease consistently,” Wilson says, adding that the landlord offered only to defer rent. Part of the reason Little Sister’s weathered the storm is because it doesn’t strictly focus on books, selling items like sex toys and gift items that can generate more profits due to higher prices and profit margins. Wilson says the store’s website was also upgraded and were able to balance out the lack of in-store sales with online ones.

“Most of our online orders were local before [the pandemic started]; now most of our online orders are Ontario and Quebec,” he says, with a laugh.

“The pandemic’s impact on shopping habits was a blessing in disguise for Little Sister’s.”

Jim MacSweeney of Gay’s The Word in London, England, reached via Facebook message, also made a push into e-commerce for the bookstore in October. “It’s been very successful, far beyond our wildest dreams.” Gay’s The Word has since processed “thousands of orders.” While their most recent reopening in mid-April has welcomed people back into the bookshop, they too lack the tourists who have traditionally been a staple of the business.

“Normally we get a lot of people visiting us from overseas and that won’t happen for a while yet.But right now, we couldn’t be busier,” MacSweeney adds.

Data suggest that shopping online grew dramatically during the pandemic. For instance, the global consulting firm McKinsey reported last year that United States e-commerce experienced the same growth level in three months during the pandemic than it had during the previous decade. Coupled with anti-Amazon, pro-local shopping campaigns around the world, this created a unique set of circumstances for small retail businesses like Little Sister’s and Gay’s The Word to benefit from, which may never have been achieved otherwise. Wilson, for one, says there was little online sales growth at Little Sister’s pre-pandemic. Instead, the pandemic’s impact on shopping habits was a blessing in disguise, offering them a chance to grow in a way customers will likely continue to shop post-pandemic.


Bars have been trickier. The numbers vary and aren’t set in stone, but it’s been suggested anywhere from 1 in 6 to 1 in 10 bars could permanently close due to the pandemic. With the number of gay bars in the United States estimated in the 800-range prior to the pandemic, this packs a different punch. If those numbers prove correct and between 80 and 140 gay bars close, this may leave entire regions—and communities—without a gay bar.

Bengie Beshear of the Austin, Texas, bar The Iron Bear received a 75 percent break on rent, which helped the bar through the pandemic despite missing out on lucrative events and festivals. But it also pivoted: since the bar had a kitchen and the governor allowed restaurants to open but not bars, The Iron Bear, like thousands of Texas bars, changed its license and put an emphasis on its kitchen.

“[Customers] didn’t think of us as a bar anymore. They thought it was a restaurant and they would come here and eat, but they’d go party elsewhere,” Beshear says. The party crowd is slowly coming back, though he admits it’s been a bit of a struggle. Now, the bar’s Facebook page is awash with events like drag shows, karaoke and underwear night—complete with a clothes check service.

Business has about doubled over earlier in the pandemic, Beshear says, but it hasn’t reached pre-pandemic levels yet. He’s looking forward with optimism, but he’s also concerned that lower levels of vaccination in rural communities outside the city might lead to more outbreaks—and potentially another hard shutdown.

Looking to the north, in Milwaukee, Wisconsin, a benefactor stepped in to assist another local bar. Drag queen Trixie Mattel, seeing the negative impact on queer nightlife, bought a stake in This Is It, a gay bar open since 1968.

“There is a life after last call.”

Bet-z Boenning, owner of the lesbian bar Walker’s Pint, also benefited from a benefactor in the form of the Lesbian Bar Project. The project, which has identified 21 U.S. lesbian bars, launched a month-long fundraiser last fall, along with a PSA, raising more than USD$117,000 for those bars to split. Boenning says she put some of these funds toward topping up staff wages, “because they weren’t making what they normally made” since the bar had to claw back its opening hours (at one point, it even closed two days a week). Inside, they were allowed 25 percent capacity, which in the case of Walker’s Pint amounted to 40 people. (In June, the Lesbian Bar Project also held a Pride month fundraiser aiming to bring in another $200,000 for the bars to split.)

While it took a cocktail of financial resources to stay open, including loans and grants (her first PPP loan was forgiven), Boenning says some of the bars in the city’s suburbs, which had less strict regulations to follow compared to urban gay bars, had some of their best years. She feels optimistic for what’s coming next. “People are ready to be out and feel some sense of normalcy and some group connections,” she says. Whether they’ll look for that in LGBTQ2S+ spaces—and in large enough numbers to make up for pandemic losses—remains to be seen.

In Edmonton, Browatzke remains optimistic, too, but also cautious.

“Hopefully the last 16 months have let me rediscover the fun of the space, and that will lead to [it] becoming more successful again,” he says.

Prior to the pandemic, the thought of losing the bar would have terrified him. It would have made him break down and cry.

“Now I have accepted, and possibly even embraced, the idea that there will one day not be the bar, and that it will not be the end of the world. Life will go on,” he says. After 25 years, the bar has shaped his life so much that he doesn’t know what it will look like without it, but over the course of the pandemic he’s had to confront that reality seriously for the first time.

“There is a life after last call. But for the last last call, I just hope that it’s still a ways away.”

Rob Csernyik

Rob Csernyik is a journalist and writer who has written for The Globe and Mail, Maclean's, The New Republic and Vice.

Read More About:
Power, Analysis, COVID-19, Business

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