Challenges faced by the night-time industry and how to overcome them

By January 6, 2020BLOG

The night-time economy is thriving. Our industry has an increasingly important role to play in towns and city centres everywhere.

But there are challenges. As with every sector, the evolving nature of the industry means the challenges are ever-changing too. The night-time industry is fortunate to have an industry association, the Night-Time Industries Association (the NTIA), helping to constantly drive us all forward and address these issues head-on.

In this article we’ll look at the key challenges hitting the night-time industry, and what we can all do to help overcome them.

There’s no doubting that the industry is one we should all be taking care of:

The night-time sector is not “niche”. It’s a major contributor to the economy, and recent news that the industry is taking a hit thanks to strict legislation and increasing costs is something we should be concerned about.

Defining “night-time”

The phrase “night-time” conjures up a range of images. From fantastic nights out right through to drunken students spilling out of a nightclub, the association with “night-time leisure” is a personal and varied one.

Actually, the night-time industry includes many businesses and their workers. From nightclubs, bars, pubs and music venues right through to hotels, restaurants and theatres, it’s an exciting and varied industry.

The London at night executive report defines “night” as anything that happens between 6 pm and 6 am. This includes traditional industries such as culture, leisure and hospitality, but broadens the range of businesses included in the industry and their interweaving impact on the city.

Around two-thirds of Londoners are active at night. Of course, this isn’t to say they’re all hitting the clubs on a Tuesday. They’re shopping, running errands, socialising and enjoying cultural facilities as part of this activity. The night-time industry is responding to customers and there’s a rise in customers expecting new experiences and a wider array of options.

To be able to serve our customers, the night-time industry must first address the industry issues that are driving costs up, closing businesses and causing licensing issues.

Obtaining late-night licenses 

Obtaining and keeping late-night licenses has been a challenge for several years. The Licensing Act 2003 allows venues to apply for just one premises licence rather than several different schemes. Granting licenses takes into consideration the local area (including both businesses and restaurants). This is designed to prevent public nuisance and disorder while also protecting members of the public (particularly children) from harm. According to the Institute of Economic Affairs, alcohol consumption in licensed premises has dropped by 26% since the Licensing Act 2003 came into effect. This shows that the act is effective – we just have a long way to go before venues are satisfied with the options available.

Britain’s night-time venues legally have an option of 24-hour licensing. Night-time economy venues hold 9% of all total 24-hour licenses, which equates to approximately 8,000 late night leisure venues across the UK.

Resistance towards 24-hour licensing is often due to associated issues related to noise, drunk and disorderly behaviour and even violence. But the solution is not to simply force all venues to close at a certain time, forcing swathes of people onto the streets at the same time. Strategically staggering closing times could be a more effective solution, but this must be agreed by all venue owners in conjunction with the local authorities.

Reducing the number of licence conditions could also help venues thrive. If nightclubs were able to operate as part of a community of businesses within a key area, the group could work together on maximising the local economy and pleasing its customers rather than jumping through hoops to meet regulations.

There are four licensing objectives currently, but there’s a possibility that a health-related fifth objective may eventually come into play following pressure from public health authorities. This is likely to affect the night-time industry dramatically. Particularly as the number of people drinking to excess seems to be declining, the industry must respond with new and innovative ways to attract patrons – simply offering alcohol isn’t enough. We’ll discuss this issue in further detail later in this article.

Increased costs

Night-time venues are experiencing increased rents and business rates, which for some can be crippling.

In addition to this, they’re left facing hefty late-night levy. Late-night levies should, in theory, contribute towards the authorities policing the night-time economy and ensuring the streets are clean, safe and secure.  70% of the net levy revenue should go towards the police maintaining the safety of the area between 12 am-6 am. However, some venues have reported seeing no increase in police presence late at night. Late-night levy revenue should not contribute towards maintaining the safety and cleanliness of the area throughout the day – but specifically to help support the night-time economy.

The other 30% of the levy is yet another contentious topic. Many councils don’t offer transparency on where the rest of the levy is going, leaving many venues feeling frustrated. Venue owners and managers have no real say in the distribution of this pot of money. This leaves some areas feeling

the levy isn’t being distributed with night-time venue’s best interests at heart.

There is a similar problem regarding Business Improvement Districts. Businesses in these defined areas are required to pay an additional levy to fund projects within the district. Again, night-time venues are reporting feeling excluded from the benefits. Where advertising and promoting the area could really help boost the local economy, venues are reporting the money is being used elsewhere. The “Special Projects” being declared are not being reviewed or analysed, leaving many disgruntled that there is a missed opportunity to really help revitalise key areas. And, worse still, venues are forking out levy after levy and seeing little return.

Of course, these increasing costs are eventually passed on to customers. People are generally drinking less (the number of people who didn’t consume alcohol in the last week rose from 33% in 1998 to 42% in 2016). There are a few reasons for this, including general health concerns and a societal shift away from big nights out. However, one of the most commonly cited reasons is cost. People are choosing to drink more at home, avoiding expensive drinks and nightclub entry fees. With night-time venues left with no choice but to increase their costs in order to make any profit at all, customers are voting with their feet (and choosing to spend their cash elsewhere).

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