The Night-Time Industries (NTIA) third annual NTE Report showed there had been “no real growth” in turnover across the sector since 2019, after adjustments for inflation, despite a rise from £121.3bn in 2019 to £16.5bn in 2022 (£95.7bn in 2021).
Moreover, the NTE has lost approximately £95bn in revenue since 2019 due to the pandemic and sky-high inflation, which the report said had “impacted investments and customer experiences”.
In total during 2022, £117bn was spent in England, £10.3bn in Scotland, £5.9bn in Wales, and £3.3bn in Northern Ireland within the NTE.
Though the UK’s NTE value dropped by £4.1bn between 2019 and 2022, from £37.2bn to £33.3bn. (£23.8bn in 2021).
NTIA CEO Michael Kill said: “In the face of prevailing challenges, the latest NTIA UK Night-time Economy Study for this year provides a glimmer of hope, offering insights into a sector weathering storms with resilience.
“The surge in consumer spending throughout 2022 signifies a robust demand, underscoring the vitality of the night-time economy.
Uncertainties loom
“However, as we await the figures from the Office for National Statistics (ONS) for 2023, uncertainties loom over the sustainability of this momentum.”
Employment figures across late-night firms surpassed 2019 levels by around 6% in 2022, with some 2.8m people working in the sector, having grown annually for the past five-years, excluding 2020.
Staffing levels were highest in England and Scotland, with 1.8m and 137,000 people working in NTE businesses respectively in 2022, while Wales (72,000) and Northern Ireland (40,000) were both below the 100k mark.
The number of firms in the sector was also estimated to have been “growing slowly”, with approximately 149,000 NTE businesses in the UK during this period and around 36,000 NTCE venues, which refers to companies driven by cultural, artistic and event activity where alcohol and food are secondary.
Distributionally, England had the highest number of NTE firms with 130,000, followed by Scotland (126,000), Wales (4,800) and Northern Ireland (2,735).
This comes as previous data from the NTIA revealed nearly a third (31%) of all nightclubs closed their doors between March 2020 and December 2023, equating to an average of almost 10 closures a month and two per week.
Kill added: “Amidst the turmoil, job creation within both the NTE and NTCE sectors has been a beacon of positivity, accompanied by the emergence of new businesses.
“Despite the hurdles posed by the pandemic and economic uncertainty, the report underscores the resilience of the NTE and its cultural importance."
“Nonetheless, closures may be concealed within the broader data, highlighting the fragility of the industry amidst ongoing challenges.
“The significance of the NTE cannot be overstated, with its substantial contribution of £136.5bn to the UK economy and provision of 2.8m jobs.”
While the UK’s NTE sector generated £43.5bn in Gross Value Added (GVA) in 2022, this was below the £47.5bn recorded in 2019, especially when adjusted for inflation.
The GVA figures, the NTIA explained, suggested although the NTE sub-sector might seem to have recovered in 2022 in terms of consumer spending increases, its underlying fundamentals such as productivity and profitability remain constrained, indicating an industry that is still struggling.
In addition, post-pandemic spending on suppliers in the UK NTE did not return to pre-pandemic levels in 2022, dropping from £57.8bn in 2019 to £45.2bn in 2019, indicating operators were trying to cut costs.
Moreover, the report claimed that despite a positive increase in consumer spending in 2022, it's likely that “much of this money” was redirected towards repaying loans and rental back payments.
“The formidable obstacles stemming from the Covid pandemic and the prevailing cost-of-living/business crisis threaten the NTE’s long-term viability, particularly endangering the more delicate NTCE.”
Cultural importance
“In essence, this year's report offers a nuanced perspective, with challenges outweighing strengths, necessitating strategic interventions to safeguard the vitality of the night-time economy.
“As we navigate the complexities ahead, collaborative efforts and targeted initiatives and support are imperative to ensure the resilience and prosperity of this essential sector.”
Looking to the future, the report predicted a shift towards experience-led socialising emphasised across various venues and art forms the NTE, with experiences and settings deemed “crucial factors” in socialising preferences while technology was thought to play a “significant role” in shaping night-time experiences.
In addition, the report said experiential activities were now closely intertwined with social media, which was influencing younger audiences’ choices as younger demographics appear to be “challenging” traditional socialising models.
NTE advisor for Greater Manchester Sacha Lord said: "This report not only highlights the economic significance of the NTE but also delves into the challenges and opportunities shaping its future.
“Despite the hurdles posed by the pandemic and economic uncertainty, the report underscores the resilience of the NTE and its cultural importance.
“Let us use this report as a compass to navigate the complexities ahead and ensure a thriving and resilient Night-Time Economy for generations to come."
