Furlough: 'great for employees, disastrous for employers’

Group managing director and chief executive of late-night business Tokyo Industries Aaron Mellor spoke with The Morning Advertiser ​at its rebranded MA Leaders Club online conference.

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He laid out the landscape for his business at present and how the enforced closures have impacted the company.

Mellor said: “It’s been a disaster really. The majority of my venues around the world are late-night venues, nightclubs or live music venues so we have been largely closed since 20 March 2020 so 18 months by the time we get reopened if the 21 June date does happen.

“The worry is what other secret regulations we don’t know about will happen on 21 June. Will this be truly an end of social distancing and business as normal? Or will there be stealth changes added at the very last minute?

“We are still talking about vaccination passports and Covid tests, that’s going to be very difficult to manage.”

Mellor highlighted how the impact of any restrictions on his venues went totally against the aim of his operation.

He said: “Our entire business of a nightclub and live music model is close social interaction, that’s our entire point of being and we are not allowed to do that at the moment so any form of social distancing makes venues uneconomical or unmanageable to control.

“Masks make things a lot harder than they necessarily need to be and don’t really satisfy any true purpose.”

The recent pilot event at Circus nightclub in Liverpool saw more than 5,000 people attending without any social distancing measures in place or face coverings.

Barcelona study

Mellor said: “The pilot event was absolutely essential, super important that happened and really successful. We don’t know the true impact of that yet but we do know the impact of the Barcelona study, which happened about two weeks previously.

“It was proven there was no Covid spike because of the Barcelona event. Only six cases after the event which was lower than the background causation that would have occurred anyway.

“Of the six people who did contract Covid after attending the event have been tracked back, four of them were unrelated to the event and two were unknown so that was one per 1,000 which was lower than the background rate we are hearing.”

While nightclubs weren’t permitted to operate, Mellor adapted his business according to restrictions in place.

He said: “It’s been a nightmare, trying to adapt to do different things. For a proportion of the summer we tried to pivot out business to try and create this night pubbing model, which was kind of sit down clubbing and got destroyed by the 10pm curfew that came in.

“It’s been a case of investing money to pivot, then the rules change and we get wiped out again. The Government support largely for nightclubs has been non-existent.”

The lack of support from the Government for the late-night sector was something Mellor highlighted, with reference to the large overheads the businesses have.

He added: “We sit on a DCMS and BEIS (Department for Digital, Culture, Media & Sport and Business, Energy and Industrial Strategy) consultation group for late-night leisure and it’s just been completely hollow.

“There’s been a lot of talk and a lot of words but no action and no support. The grants we have seen have been largely ineffective.

“Most businesses with city centre nightclubs are way over the £51,000 rateable value threshold and the £3,000 a month closure grant, some of the rents at my properties are £300,000 a year, what does £3,000 do? That doesn’t even keep the electricity or CCTV on.

“It’s like the Government doesn’t understand the benefit of nightclubs and live music venues bring to the UK economy. Nightclubs in particular have had zero support throughout this pandemic.

“Furlough has been great for employees and disastrous for employers. We’ve got to manage all that business and are effectively being the benefits office on behalf of the Government.

“Live music is still one of Britain’s greatest outputs. Our are tremendously good at exporting music around the world. That music does not happen if people don’t get jobs in nightclubs and go and get a job in Aldi, we lose those musicians.”

Cutting-edge music

The operator stated decisions for the late-night sector from above were based on experiences from years ago.

“The Government is basing its entire theories on its experience of a nightclub in the 1980s or 1990s, where you’ve got logo carpets, chrome handrails and a 2am slow dance,” he said.

“That’s not what nightclubs deliver in 2021. We are cutting-edge music that is well-known around the world.

“We export our business of nightclubs around the planet. Ibiza and Vegas are all run and managed by UK operators and UK management teams because we know how to generate atmosphere in nightclubs.

“The Government just does not understand that in the same way other countries do.”

While a potential reopening date of Monday 21 June has now been mentioned for the first time since the pandemic started, Mellor is concerned about what could change between now and then.

He said: “My worry is the 21 June, it surprised me when that date was announced, it feels almost incomprehensible we can go from six people from two households on 20 June to 5,000 people in a nightclub on 21 June without social distancing that step seems quite far.

“Unlike retail, we need more than two weeks to programme. Some of our artists are booked 18 to 24 months out.

“There’s huge demand globally for these artists so we need to know what travel restrictions will be. Half my diary for Q4 is looking like a rail wreck of pencils and second pencils and confirmations because we don’t know whether artists will be able to travel from Germany, Tokyo, Australia how does this work?

“Without knowing the full picture, we don’t know.”