Featured image credit: Long Truong on Unsplash
A report from the Night Time Industries Association (NTIA) has shown that despite glimpses of recovery following the COVID-19 pandemic, the cost-of-living crisis could deliver the final blow for some night time businesses.
In the decade leading up to the onset of the pandemic in 2020, the UK’s night time cultural economy (NTCE) showed steady growth and contribution to the country’s gross domestic product (GDP). In 2019, the sector generated 1.64% or £36.9bn (€42bn/$45bn). However this fell to £29.4bn in 2020 and to £24.1bn in 2021.
Unlike the wider night time economy (NTE) which recovered modestly in 2021, the NTCE struggled. Consumer spending and share of GDP fell further, according to the report.
In 2021, the wider UK NTE contributed 4.1% and £93.7bn to the UK economy. This was down from 5.1% and £116.1bn in 2019, respectively.
There are some positives, with the NTCE – which represents the parts of the night time economy that are driven by cultural, artistic and event activity – remaining a significant employer. The first NTE report showed that the sector supported approximately 425,000 UK jobs and 38,000 businesses in 2018. This fell to 392,000 jobs and 34,000 in 2021, but estimates for 2022 suggest that there has been positive recovery with 424,000 jobs and support for 35,500 firms.
The report found that while consumer spend did recover slightly for the wider night time economy sector, the NTCE further lost consumer spend in 2021. The NTIA related this to extended periods of closure during the pandemic and a slower recovery of businesses that rely on mass audience participation, such as nightclubs, live music, theatre, cinema and performance.
“However, as we head further into a cost-of-living crisis despite the bounce back in jobs and firm numbers, consumer spend, sector income, productivity and profitability, continue to struggle,” said the report.
“This suggests that the industry is operating on ever smaller margins and a large proportion of firms are in ‘survive’ rather than ‘thrive’ mode – employing staff to operate but having to exist with much lower income and low (or no) margins.”
Michael Kill, chief executive of the NTIA, said in the foreword of the report: “My hope is that this report will be closely considered by policymakers as they continue to chart the UK economy’s recovery from multiple crises. After the 2008 economic crisis, it was hospitality and night time economy businesses that led the recovery. The same can be true of the current economic crisis, where the night time economy will once again need to be at the heart of the recovery.”
Sacha Lord, chair of the NTIA and Night Time Economy Advisor for Greater Manchester added: “The Government has failed independent business operators and the cultural sector across the UK. The report produced by the NTIA shows how hard these sectors have been hit over the last few years, delivering a stark reality of the challenges faced by the industry. The Government needs to do everything possible to protect these vitally important businesses, that deliver way beyond economic impact, but are considered vital to social cohesion, nightlife tourism and the mental health and wellbeing of the UK.”
Read the full report here.
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