The second NTIA Night Time Economy report shows the stark reality of the challenges faced by the industry and defines the true journey that the industry has been on over the last few years, and the impact on the entire nightlife ecosystem. The report aims to fully understand the economic contribution and significance of the night time cultural economy (NTCE) to the UK economy as well as the wider UK night-time economy (NTE) and the overall ‘out of home’ leisure economy (OHLE).
The Night Time Economy was amongst the worst affected by the Covid 19 pandemic and the report shows that while consumer spend recovery has happened to some extent in the OHLE and NTE sectors, the NTCE has further lost consumer spend in 2021. This is highly concerning. It is likely the result of closures and slower recovery of NTCE businesses relying on mass audience participation – nightclub, live music, theatre, cinema and performance, all of which are the driving force of the NTCE. Whilst other structural changes in the OHLE, NTE and NTCE cannot be ruled out, the pandemic appears to have set back the economic contribution of these vital industries to ‘UK plc’ by about 6 or 7 years.
One positive thing to emerge out of the study was that jobs have recovered to pre-pandemic levels and are at an all-time high in some sectors. 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. 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.
Whilst this is a deliberately narrow economic study, it is vital to recognise that the NTCE has significant impact beyond its pure economic outputs. It is vital to social cohesion, self-identity, mental health and well-being and in creating a positive image for the UK on a global scale.
Michael Kill CEO NTIA Says:
“This benchmark report, defines the true journey this industry has been on over the last few years, and the profound impact on the entire nightlife ecosystem. With the night time culture economy, SMEs and independent businesses being hardest hit during the pandemic, and beyond.”
“These businesses make up over 70% of our industry, and are so important to economic and cultural recovery, as well as social cohesion, nightlife tourism and the survival of high streets within towns and cities across the country.”
“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.”
“The recent announcement of December GDP figures suggest we have technically narrowly missed a recession, but it is clear that thousands of businesses are suffering the economic and physical impacts of a recession.”
“The report shows some small signs of recovery, but it is clear that the industry is some way behind the rest of the economy. It is now vitally important that the Government take the proactive step to cut VAT in the March budget, for all businesses across the hospitality and night time economy sectors, allowing the sector the financial headroom to recover.”
Sacha Lord – Chair of the NTIA / Night Time Economy Advisor Greater Manchester /Co Founder Parklife & WHP said:
“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.”
“It is now vitally important that the Government, armed with this report, do everything possible to protect these vitally important businesses, that deliver beyond economic impact, but are vital to social cohesion, nightlife and domestic tourism and the mental health and well being of the UK.”
“I would urge the Government to reduce VAT for all businesses, so they are able to further contribute to the recovery of the UK economy.”
Read the report HERE