Nightclubs: getting the party restarted

Flashing lights and thumping basslines are once again beating at the heart of holiday islands including Ibiza and Mykonos. We investigate how nightclubs in party destinations are performing now travel has resumed.

Nightclubs have had a terrible two years. The Covid-19 pandemic hit this sector of hospitality especially hard, with clubs among the last venues allowed to reopen after lockdown restrictions were eased around the world.

Figures from the UK paint a bleak picture. Recent data from CGA shows there are 1,130 nightclubs left in the UK, compared with 1,446 in December 2019. This means over the past two-and-a-half years 20% of venues have permanently shut, with establishments in the Midlands and the north of England hit particularly badly.

In Europe, nonprofit International Nightlife Association (INA) reports similar figures, estimating between 5% and 20% of venues have shut in each country. The UK night-time economy is a lucrative industry, generating £112 billion (US$136bn) in revenue every year for the UK, 6% of the nation’s total. Tourism contributes a sizeable sum to that profit.

“Nightlife tourism pre-pandemic saw over 300 million visitors a year, and [nightclubs] are keenly linked to international tourism,” says Michael Kill, CEO of trade body the Night Time Industries Association (NTIA).

As restrictions have eased, clubbers have been taking to the dance floors once again, “and in some territories the turnout has been much greater than expected, and greater than before the pandemic hit”, a spokesperson for INA says. “Consumers have been eager to go out again, and are doing so frequently, especially due to the past years of harsh restrictions and socially starved clubbers the pandemic has created.”

Freedom of movement

Summer 2022 has also marked the first season that many people have been afforded the freedom to travel overseas. For destinations that rely heavily on international clubbers – Ibiza, Mykonos, Hvar, and the like – operators and clubbers have never been more ready to rave.

“Our member association in Ibiza, Ocio de Ibiza, stated recently that the numbers are beating pre-pandemic season numbers with mostly sold-out venues; but the damage caused these past two seasons is going to be impossible to recover from,” INA notes.

“International tourists are spending and travelling to party destinations. The association has also mentioned that the months of May and June have been the best for this season since clients showed more high-purchasing power and spent more.”

Australia has also seen a rebound in international visitors since reopening its borders – and it’s been a welcome boost to the nightclub sector, too, according to the regional NTIA body. “Australia’s beaches, natural beauty and culture have long been drawcards for international tourists,” says Michael Gibb, CEO of NTIA Australia. “It’s great to see tourists returning to our cities and regions. This includes international visitors to our clubs and venues.”

The ongoing challenges facing the nightclub sector have not deterred new openings from launching this year. In June, Island Hospitality, the team behind the Park Chinois restaurant in London’s Mayfair, opened a nightspot in Ibiza: Club Chinois. The 3,000-square-metre venue has the capacity to host 1,000 guests, and also opened a summer pop-up of Japanese restaurant Zuma on its terrace.

“As we were fresh out of lockdowns, and the Covid situation looked to be improving, we knew people wanted music, to go out and to dance,” says Sofija Mehta, owner of Island Hospitality. “Therefore, it felt like the perfect time to launch Club Chinois, plus we felt Ibiza needed something fresh and exciting.”

Ibiza isn’t alone in its new offerings. Although Australia instigated strict Covid-19 rules, which lasted for much longer than in other parts of the world, consumer confidence is slowly but surely returning, says Gibb – and new clubs are catering to demand.

“While there may have been some reticence to get back out when restrictions were first lifted, that has long since departed,” he says. “Consumers are eager to get back out and enjoy the night. There are new clubs opening in Sydney, which is a good indicator of strong consumer demand.”

Club Chinois’ Mehta is delighted to see the island of Ibiza so busy during the peak summer months – especially after such a difficult period.

“It is amazing to see the island full of life again,” she adds. “The restaurants, clubs, and beaches are packed, and it feels like people are so excited to be able to travel again – the positivity and energy in the air is infectious.”

But as the party gets started again, operators do recognise fresh threats to the nightclub scene. After being locked down for extended periods of time, consumers have discovered a newfound appreciation for being outdoors more, notes Mehta.

“People have realised with the pandemic that there’s also a life without clubs,” she says. “They have started to appreciate being outside more, in nature, and lots of people have changed their routine by going to bed earlier than before Covid maybe, as well as entertaining at home. But I believe people have absolutely missed having experiences, and this is why we are bringing Parks Chinois’ world-class food and cabaret to Club Chinois.”

Nonetheless, INA envisions a long road to recovery for the nightclub sector, even with resumed travel. “We consider that it will take the industry five years to begin a clean slate and return to pre-pandemic revenue numbers,” the association says. “The fixed costs with no income have caused great debt in many venues in Europe.”

Action is needed

To protect the future of the international nightclub scene, the trade bodies agree further government action must be taken.

“The resilience of our sector will see us rebuild but we will need additional support from government in terms of reliefs, and a working strategy around deregulation, planning and licensing easements to create trading opportunities,” urges NTIA’s Kill.

Nightlife Industries urged governments and fellow trade bodies not to forget about nightclubs, as the hospitality sector collectively faces new challenges.

“Clubs continue to need economic aid from government and administrations; the pandemic is over but the damage persists and we cannot forget about the industry,” Nightlife Industries stressed.

“Inflation and the increase of costs have not been easy for the industry either, as well as the difficulty to find employees since many that were employed by the industry have looked for other jobs. Governments need to see the industry as allies, since one out of every three tourists chooses their destination according to the nightlife offer.” For as much as consumers are keen to travel again, they would also like to dance.