What has been happening in the night club sector
Since the emergence of the dance music scene in the late 1980s night clubs have become a familiar feature of Britain's High streets. Clubbing has become a popular activity with millions of young people on a Friday and Saturday night, and clubs now attract many women to what used to be regarded as a lads' night out. Going out on other days of the week - in particular Thursday and Sunday - has also grown in popularity in recent years.
Over the years the club scene has attracted bad publicity because of its association with drug taking and dealing. A combination of drug and alcohol consumption, together with the danger of becoming overheated and dancing until exhausted, can prove fatal and the late night industry has worked with licensing and policing authorities to create a safer clubbing environment.
In recent years there has been an increase in concern over alcohol misuse and 'binge drinking' and the related anti-social behaviour. New mandatory licensing conditions introduced in 2010 ban all 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.
As part of tackling the problems of drug misuse and late night disturbance and disorder the Private Security Industry Act 2001 introduced from 2004/05 a system for licensing door supervisors in England, Wales and Scotland, who must 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.
Although it's thought that the number of people going out in the evenings hasn't changed very much, night clubs have been threatened by the rise of late night bars and pubs which also offer entertainment such as dancing - a significant number of pub-goers now feel that it is unnecessary to go on to a nightclub. As a result the business is very competitive and both entry fees and drinks prices have come under pressure. Licensing legislation now allows pubs to extend their opening hours and this has led to many more pubs competing with night clubs for a slice of the late night economy. The challenging economic climate during the late 2000s and early 2010s added to the pressure on the nightclub sector and saw many people look for cheaper alternatives to the nightclub. According to the Association of Licensed Multiple Retailers (ALMR) in August 2015, the number of nightclubs had fallen from about 3,150 in 2005 to around 1,750 in 2015. As well as competition from pubs with late licences, it's also thought that the introduction of the smoking ban in the mid-2000s and the sharp rise in student tuition fees from the early 2010s had a negative impact on nightclubs.
Nightclub revenues have been falling for several years and despite some small growth reported in the Association of Licensed Multiple Retailers Benchmarking Report 2017 they are expected to continue to fall until 2020. An Ibis report published in April 2018 confirmed that the industry was in a long-term decline that would continue over the next five years. Competition from pubs, particularly those with dance floors, has contributed to the decline of nightclubs. 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
Clubs have also had to contend with increasingly restrictive local authority licensing conditions, as well as a recent relaxation of the law covering live and recorded music which has made 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.
The mid 2010s saw a decline in 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 financial crisis (made worse by the uncertainty following the vote in June 2016 to leave the EU)
- 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. Despite rising inflation following the Brexit vote putting consumers' disposable incomes under pressure, spending on entertainment increased in 2017 compared with the previous year, driven by millenials spending in pubs and bars as well as on in-home leisure. This trend is expected to continue but to take advantage of it you'll need to make your club attractive to your market. You could 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.