WeHo Loves Locals aims to support businesses in the Rainbow District such as The Abbey Food and Bar. (photo courtesy of The Abbey Food & Bar)

The West Hollywood City Council unanimously passed an initiative on May 19 aimed to increase foot traffic in the Rainbow District and revenue to the local businesses. Mayor Chelsea Byers brought “WeHo Loves Locals,” an initiative allocating $369,960 of reserves in the general fund, to support a 12-week gift card program that would allow local businesses to offer consumers a buy one, get one half-off deal on gift cards.

“I brought the gift card program idea because a lot of other cities are doing this and it works really well to generate interest from the local community for the restaurants and business community broadly,” Byers said at the City Council meeting. “I think that this is a really unique opportunity to invest in the whole of our community and uplift all of us.”

The Rainbow District has seen a decline in tourism in recent years, forcing businesses to shut down. Additionally, the area has seen a 14% decline in visitation since 2018.

“Like many businesses in the Rainbow District, The Abbey continues to feel the long-term effects of the pandemic and the rising cost of doing business,” said Tristan Schukraft, owner of The Abbey Food and Bar. “Overall foot traffic is still significantly lower than what we saw in previous years. Business hasn’t rebounded the way we’d hoped – and certainly not at the pace required to keep up with inflation and increased operational costs.”

The gift cards will be available through Yiftee, an organization that aims to support local businesses by creating e-gift cards for cities that can be used for multiple businesses in one area. Yiftee has been used for similar programs in Palm Springs, Lake Forest, Murrieta, Upland and Carlsbad.

“The city of Lake Forest began implementing the program in 2022 and recently released its 10th phase of the program with each phase selling out and increased business participation,” said Laura Biery, West Hollywood’s director of community development.

According to the Yiftee website, many communities have seen the impact of the e-gift card programs, with 51% of card holders trying out new restaurants and businesses with their cards and eight-times the value of the original sponsorship being brought to the merchants through additional card purchases.

“According to Yiftee, on average gift card holders in the program typically spend 30% more than the card value,” Biery said. “Once launched, the program will incentivize more dollars to be spent at local West Hollywood businesses.”

The program is a continuation of last year’s West Hollywood marketing campaign. According to a report, the campaign generated over 36 million ad impressions, almost 50,000 pageviews on the WeHo Locals website and nearly 2,500 direct click throughs to local businesses.

However, Schukraft said that these efforts were not enough to make a real difference for The Abbey.

“We appreciate the efforts – things like Happy Hour promotions and free parking are helpful,” he said. “But they aren’t moving the needle in a meaningful way. West Hollywood needs bold, consistent campaigns and destination-worthy events to bring people back to the Rainbow District.”

The campaign included two programs – one targeted towards locals and the other targeted towards tourists.

“Overall, the program was a success, especially given the modest $300,000 budget,” read the report. “We strongly recommend continued investment in programs like these that elevate West Hollywood as a premier destination for dining, entertainment, and shopping – and foster consistent, meaningful engagement with local residents.”

However, the actual increased revenue received by businesses was not able to be tracked – something that made Vice Mayor John Heilman initially hesitant about allocating additional funding to the campaign. Gift cards, though,  would help provide measurable results.

“I really like the idea of these gift cards because you can really track the amount of dollars going into the businesses,” Heilman said.

Of the money allocated, $100,000 will be dedicated as match funds to be distributed throughout the year in $10,000 increments. Another $100,000 will go to the Program Development, Management and Creative Execution Budget with $50,000 for creative program design and advertising assets, $25,000 for production of assets and $25,000 for the integration of the gift card program into weholocals.com. The Paid Advertising Budget would be $170,000 with $30,000 for online ads, $60,000 for print placements, $10,000 for point-of-sale materials and $45,000 for strategic partnerships.

WeHo Loves Locals requires a one-time expenditure of $464,960 with $95,000 already budgeted, allowing business owners in the Rainbow District the opportunity to participate at no cost.

Schukraft said The Abbey is open to participating in the program, but is not optimistic about the outcome.

“Buy one, get one offers might help with individual transactions, but they won’t solve the underlying problem,” he said. “West Hollywood is now one of the most expensive cities in the country to run a hospitality business — especially with rising minimum wage mandates, costly leave policies, inflation, tariffs and supply chain issues. If we’re serious about reviving the district, we need programs that generate real excitement and bring people here — not just discounts.”

“Our local businesses need continued support,” West Hollywood Chamber of Commerce president and CEO Genevieve Morrill said in a written comment. “While the return on investment may not yet be fully realized, we believe this program has the potential to evolve into a signature initiative that delivers meaningful impact – given time and strategic promotion.”

An agreement of services has been approved with West Hollywood Travel and Tourism for the WeHo Loves Locals expansion, gift card program and Rainbow District marketing, but it has yet to be announced when the 12-week promotional gift card program will take place.

According to Shukraft, businesses like The Abbey need bolder action. He recommends more flagship events, public safety support for cell phone thefts, and drink spiking and efforts to fill the empty storefronts in the Rainbow District.

“We need real momentum,” he said. “That means big events that drive traffic, stronger public safety enforcement and a business environment that helps us succeed instead of making it harder to survive. We love West Hollywood, and we’re ready to be part of the solution – but we can’t do it alone.”