(last updated August 2024)
What has been happening in the night club sector
The night-time economy has faced huge challenges in recent years. The government-enforced lockdowns during the pandemic forced venues to close. This was followed by a cost-of-living crisis that meant disposable household incomes shrank, causing many to give up non-essential expenditure.
Clubs, pubs and other night-time venues saw revenue plummet while costs, including energy costs and business rates, rose substantially. Major night club chain, Rekom UK, which owned Pryzm and Atik brands went into administration in February 2024. In April of the same year, the Night Time Industries Association (NTIA) reported that between March 2020 and December 2023, a total of 3,011 night economy businesses closed in London and the surrounding boroughs alone.
There has been a decline in the average amount of alcohol consumed per person – particularly among younger people. The sharp rise in student tuition fees from the early 2010s onwards has also had a negative impact on nightclubs. People in their 20’s and 30’s are more interested in spending their spare cash on ‘events’ – demonstrated by the speed with which pricey concert and festival tickets sell out.
On the flip side, older people – particularly those aged in their 40’s and 50’s – who were ‘coming of age’ in the heyday of the UK’s club scene are now looking to relive their youth. This can be seen in the trend for silent discos and ‘daytime raves’ that start in the afternoon and close before traditional pub closure times.
Over the years the club scene has attracted bad publicity because of its association with drug taking, dealing and drink spiking. A combination of drug and alcohol consumption, which can prove fatal, and the increased risks from online dating where people may not be who they say they are has led to collaboration between the late-night industry licensing and policing authorities to create a safer clubbing environment. The Ask for Angela scheme, which is designed to help anyone who feels unsafe on a night out, was launched in 2016.
Concerns over alcohol misuse, 'binge drinking' and the related anti-social behaviour led to mandatory licensing conditions which banned irresponsible drinks promotions and the Home Office continues to work to tackle anti-social behaviour and the misuse of drugs and alcohol. Town centre management schemes like Purple Flag and Best Bar None have been increasingly adopted by local authorities and other organisations with an interest in evening and night time economies.
Since the mid-2000’s, door supervisors in England, Wales and Scotland have been required to be licensed and included on the register of the Security Industry Authority (SIA). This requirement was extended to Northern Ireland in 2010.
As the habit of 'pre-loading' (drinking at home before going out for the evening) has increased some night clubs have started to ask their door supervisors to breathalyse anyone who appears to be drunk and turn them away if the reading is over the limit the club has set. The limit is usually set somewhere between 80 and 100. This approach can help avoid conflict as it is no longer the personal decision of the supervisor to deny entry but an impersonal application of rules laid down by the club. The policy is also seen as another way of protecting the club's premises licence.
Licensing legislation allows pubs to extend their opening hours. This has meant that pubs and clubs are now competing for the same slice of the late night economy – although 7,767 licenced venues closed between December 2021 and December 2023.
As well as facing competition from pubs, the other things which put people off visiting nightclubs include:
- expensive entry fees
- expensive drinks
- not liking the music
- overcrowding
Clubs have also had to contend with increasingly restrictive local authority licensing conditions, as well as a relaxation of the law covering live and recorded music which make it easier for pubs to operate as live music venues. Venues no longer need to be licensed to provide amplified live (or recorded) music between 8am and 11pm as long as the audience is no more than 500 people. The provision of unamplified music between 8am and 11pm no longer needs a licence at all, regardless of audience size.
There has been a considerable decline in the number of live music venues, particularly in London, where 35% have closed. In 2015 the Mayor commissioned a Music Venues Taskforce to report on the reasons for the decline and to formulate a rescue plan. This identified many reasons for the decline including:
- the fall in popularity of bands in favour of solo artists
- competition from high-quality productions at places like the O2 arena
- rising ticket prices at a time when property prices are high and the economy has not fully recovered from the recent financial crisis
- the added expense imposed due to licensing, policing and health and safety issues
- international competition
- a lack of investment
- business rates
Competition for the leisure pound is strong. You'll need to think about how you can meet the challenge from pubs and other music venues. You'll need to make your club attractive to your market. You should consider the preferences of all your potential customers to put on ‘events’ that appeal to them. This could range from live DJ sets, Bingo Loco events and drag nights to silent discos and day-time raves. You might also consider having different types of music in different rooms, restricting numbers to avoid over-crowding and reviewing your entry and bar prices.
Keep up to date with developments
Joining a trade association is an excellent way of staying up to date. UKHospitality represents the interests of late night operators in the UK. It works closely with government, licensing authorities and the police and offers members a range of benefits.