Operating costs put late-night economy at risk
While the UK’s nightlife economy has somewhat bounced back from the pandemic, new costs such as rising National Insurance contributions threaten its recovery, according to research from CGA by NIQ and the Night Time Industries Association (NTIA).
The late-night sector’s recovery since the enforced closures of 2020 has been slow and steady. Regarding bars in particular, the number of premises has risen by 7.6% since March 2024, with almost seven net openings each week. In the last 12 months, the number of ‘cultural’ night-life venues, such as cinemas and theatres, has increased by a more modest 4.5%.
“These numbers show how hard businesses in late-night hospitality have worked to build back from the turmoil of COVID-19. They have also adapted very well to consumers’ changing leisure needs and are shaping a new and dynamic night time economy,” commented CGA by NIQ’s Karl Chessell.
By contrast, the nightclub sector has been pummelled since the arrival of Covid-19 five years ago, with the number of nightclubs operating today a third (33.8%) lower than it was at the start of 2020.
NTIA CEO Michael Kill commented: “What we are seeing is the barest flicker of life after five years of near-collapse. A 5% growth in nightclubs sounds positive – until you remember we’ve lost 34% of them since 2020.”
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However, while bars in particular may have been demonstrating a gradual improvement, it may be a case of hopping out of the frying pan and into the fire.
Among the challenges that the sector now faces is the increase in National Insurance contributions, which went from 13.8% to 15% on 6 April this year.
In light of these changes, the mood within the industry is downbeat.
A recent NTIA survey of 500 nightlife business found that 40% expect to close within the coming six months unless they are provided with financial support.
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