Its been on life support in the UK for a long time now, but is the Nightclub as we know it worth saving?
The Office of National Statistics dropped nightclub cover charges from the consumer price index, one of the tools used to calculate and monitor inflation earlier this year. Is the day of the Nightclub over? A lot of factors have come together to contribute to the current state of affairs, and we’ll discuss a few of them along with where I see the market moving.
What has contributed to the death of the nightclub?
The 2003 Licensing Act which came into effect in 2005 changed the landscape of the bar industry forever. In the past, pubs had closed at 11pm (some still choose to) which meant that Nightclubs with their late night openings were an automatic part of the weekend plan. Groups would generally start off at their local pub and move onto the club between 10-30 – 12 midnight, continuing until 2-3am in general. Today, many people pre-load drinks at home before going to their night’s destination.
In 2006 the new UK Health Act banned smoking in public places including bars, restaurants, private clubs and workplaces. Of course this hit all bars, not just the clubs. One of the unforeseen consequence of the newly clean air in nightclubs was that suddenly the places smelled instead of smoke, of sweat and body odour, which had previously been masked by the tobacco. Presumably sales of Lynx deodorant skyrocketed in the following weeks.
UK alcohol consumption peaked in 2008 and has been in decline since, though in 2014 levels of consumption were still higher than in 1996. With one in four 16-30 year olds choosing not to drink at all for a variety of reasons from impaired judgement, fitness goals to embarrassment over behaviour while intoxicated, especially in a social media driven world in which almost every human in the club is carrying at least one internet connected camera.
Also with the rise of the internet and specifically the app economy, nightclubs are less and less relevant for those looking to meet a potential partner for romance or… well, less romantic pursuits. Tinder specifically, and to a lesser extent Facebook and the like allow people to connect without the awkward in person rejection of your drink offer.
People still want great experiences, but is the nightclub completely failing to fill that need for what has historically been its core audience?
The rise of craft drinks
While its taken a long time for the trend for great drinks to permeate the UK, especially outside of the major cities companies like Brew Dog and Purity Breweries have made massive changes to what people drink today. While the UK has always had its ale drinkers and the CAMRA organisation championing real beers, basic lagers have still dominated the volume side of the bar business. Many of the younger drinkers however are far more likely to be seen with a Punk IPA or a Beavertown Smog Rocket in hand.
When even Wetherspoons pubs (formerly one of the most basic brands you could imagine, specifically known for their low prices) are today advertising their Gin Palace and Vodka Distillery menus each with a wide range including small batch and craft distillers products, you know that there is a real demand for variety and quality in the market now.
Smaller independent bars are showcasing their creativity with signature drinks and a range of classic cocktails, tiki drinks and more, staffed by bartenders who care about what they do and are always looking to make their drinks and service better.
Do nightclubs even have a place in today’s bar scene?
Now that local pubs and town and city centre bars aren’t tethered by the restricted opening hours of the past, what is the draw of going to a loud room with limited seating, generally low quality drinks and expensive cover charges to get in?
It feels like nightclubs have buried their heads in the sand to hope that people don’t notice them becoming less and less relevant to the world of bars around them. Their old business model of being “The place you can still get a drink late at night” has been eroded from both sides by later openings of bars making great drinks where you can have a conversation with your friends, or even the bartender, and casinos which are often open 24 hours.
Nightclubs still seem to feel that an intimidating door team is the best way to avoid trouble in their venues. Surely having a welcoming entrance and a security team there with the intention of keeping people safe is the preferable option. When you have to survive the gauntlet of unfriendly guys on the door to even get to the table where you’re expected to pay for the privilege of entry to the noisy room, what’s the draw?
Nightclubs are doomed to wallow in irrelevance when they want people to pay to get to their bar to buy an overpriced poor quality drink and stand, unable to talk to their friends comfortably, when they could stay in a welcoming and relaxing bar with comfy seats, drinking a far better drink and where they are welcome to come and go as they please.
What are nightclubs doing about it?
Nightclubs are far too risk averse. In my experience, they’re too afraid of losing potential door revenue from cover charges to even experiment with free entry to boost numbers. The problem is no-one wants to be in an empty nightclub, whereas a quiet bar can be quite welcoming. Clubs depend on being packed to the rafters to generate their atmosphere, whereas a bar with a well trained bartender who can interact with guests because the music is lower can keep them entertained and build a crowd easily.
Guest volume should be the first point of call for nightclubs when trying to increase revenue, yet many give their cover charges to external promotors who’s incentives are very different from the club’s. The promoter makes nothing from allowing people in for free, even though the club would make revenues from the drinks, and early in the night at least free entry can encourage guests to arrive earlier and start spending with the club sooner rather than the competition. That early core of guests then makes the club look busier for when the first paying guests come through the door.
In an ideal world, a nightclub’s promotional activity should be internally organised with the incentives for the in house promoter aligned with the club’s interests. The overall success of the club should be first and foremost, not just the number of paying bodies you can get through a door. Of course this means some extra expenses for the club paying for the hours of the internal promotions manager, printing and paying for special guest DJs or appearances, though if the nights are successful this will be more than compensated for in terms of the increased revenues.
Do nightclubs have delusions of grandeur?
Nightclubs seem to think they’re the hub of the bar industry. With a very limited number of operators left in the UK, in general buying up the premises that more competent pub chains have realised are unprofitable and looked to dispose of. Its very easy to lead such a small (and shrinking) market, but they seem to think that they’re some sort of aspirational brand based on the pricing that many of them offer. Thankfully the days of £250 booths with little or no product being added are coming to a close now.
While a handful of the clubs may still be growing their sales and think they’re bucking the trend, the numerous bars nearby closing down is likely more of a factor than the experience they’re giving their guests. There is no reason to wait for a drink in even the busiest clubs if the bars are set up however throwing more untrained staff at the badly run bar rarely improves service when they’re too crowded and lacking the equipment and experience to serve efficiently.
When you see a nightclub on TV…
Now this could be a symptom of my British sensibilities, but the image of nightclubs in the media, on TV shows and Films is very different to what we see in the UK. American clubs are shown as large lounges with booth seating, table service and women dancing by playing with their hair in a way I’ve never seen a human do in reality.
These places have conversations going on all the time. They’re dark and atmospheric as nightclubs should be, have dance floors full of dancing beautiful people, and don’t seem to have floors covered in broken glass, discarded drinks and vomit. I want to go to these clubs. Not what we have in the UK right now, so why isn’t anyone running them?
What does the future hold for the late night bar industry?
As clubs still continue to aim to get bigger, louder and later, I see the trends continuing towards the smaller niche bars where guests get personal service and drinks that warrant their pricing. The rise of the internet has allowed people with even the most diverse interests to find the other 10 people in the world who share your passion. Why does the bar industry still think that everyone from their diverse and specialised bars would want to come together in the loud bar with a lowest common denominator based drinks offering?
Those diverse and niche bars will continue to flourish as long as the owners, managers and teams are passionate about what they offer and celebrate their unique selling points. While the nightclubs remain the late night last resort, less and less people feel the need to resort to visiting.