Night-time economy ‘at risk of becoming extinct’

By Nikkie Thatcher

- Last updated on GMT

Industry report: the findings of the inquiry demonstrate the precarious situation night-time businesses are in with many unable to trade at all amid the pandemic
Industry report: the findings of the inquiry demonstrate the precarious situation night-time businesses are in with many unable to trade at all amid the pandemic

Related tags: Night-time economy, Nightclub, Late night operator, Government

Businesses operating in the late-night sector are facing the possibility of becoming extinct, research has highlighted.

The report Covid-19 and UK Nightlife​ was an inquiry by the All-Party Parliamentary Group (APPG) for the Night-Time Economy, a cross party group of more than 40 MPs and received 20,112 responses from 11 January to 7 February 2021.

Of which, 16,159 were consumers, 1,142 were businesses, 1,303 employees and 1,508 freelance workers.

The definition of ‘night-time economy’ was businesses operating between 6pm and 6am, including nightclubs, bars, music venues, pubs and entertainment sites.

It revealed the large majority (85%) of those working in the sector are considering leaving the industry and more than three quarters (78%) of all employees had at some point, been on furlough.

In terms of the self-employed in the sector, only 36% had been able to claim the grant.

More than half (58%) of the consumers who responded to the survey said they would visit nightlife businesses between one and three times a week before the pandemic and a further 16% would frequent a bar, pub, lice music venue or nightclub more than three times a week.

On average, 47% of customers would spend between £50 and £100 on a night out and a further almost fifth (18%) would spend up to £150 in total.

Over half (55%) of nightclubs have been unable to trade for the duration of the pandemic so far with 92% trading for six months or less.

Trading results

Currently, nightclubs are, on average, trading at just a fraction (5%) of their pre-Covid annual revenue.

For bars, 27% have been unable to trade, 88% traded for six months or less and are on average, trading at only 9% of pre-Covid annual revenue.

The study did include pubs and found almost two in 10 (18%) had been unable to trade and for the remaining pubs that can trade, they were operating at 11% of pre-pandemic revenue.

The same findings were analysed of live music venues, which discovered 35% have not been able to trade and those that are trading are operating at 9% of revenue.

Like businesses in the hospitality sector, the report also called on the Government for a campaign to drive consumer demand when safe for venues to reopen.

Data from the inquiry found a third (35%) of nightlife businesses were anticipating further redundancies between the time of asking and April this year, which included 40% of nightclubs, 40% of bars, 36% of pubs and 37% of live music venues.

On the subject of overheads, the report cites commercial rent as the largest fixed cost for nightlife operators.

Some 80% of night-time businesses leased a property as a commercial tenant and more than half of these firms are now in arrears with rental payments. This included 60% of bars, nightclubs and pubs.

Almost three quarters (72%) of impacted businesses are over two quarters behind on their payments including half (51%) of nightclubs, a third (32%) of live music venues are now three quarters in arrears.

Industry on its knees

Night-Time Industries Association CEO Michael Kill said: “We are pleased to support the APPG for the night-time economy when it became clear our industry’s needs weren’t being heard by policy makers. But it gives me no pleasure today to announce the findings of this report, which confirm the devastating impact that the pandemic has had on UK nightlife.

“Every day I speak with the dedicated people that make up this industry – from artists to engineers, bar staff to security, and production to promoters – they have shown great resilience in the face of adversity.

“But resilience only gets you so far without the required support. We need more assistance and a detailed plan for reopening now. Otherwise, much of what defines a night out in the UK will be lost forever.”

APPG chair and former self-employed DJ Jeff Smith warned the possibility of many night-time economy firms going bust would leave high streets like “ghost towns”.

He said: “Our world-leading night clubs, pubs, bars, and live music venues are cornerstones of our communities.

“They drive so much economic activity both locally and nationally, and bring hope, joy and entertainment to millions across the UK.

“Our findings reveal this industry is on its knees, in desperate need of additional support from the Government and a concrete plan for reopening.

“Without these interventions, many of these viable businesses will go under, leaving city and town centres resembling ghost towns. If the Government is serious about its ‘levelling up’ agenda it must act now to save this sector and avoid untold damage to the social fabric of this country.”

Related topics: Legislation

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