Social trends, licensing regulations and smoking bans slow revenue growth
London, United Kingdom (PRWEB) August 10, 2012
The Nightclubs industry has endured a sobering five years, as annualised revenue through 2012-13 is expected to decline by 1.5% to reach £3.37 billion. According to IBISWorld industry analyst David Stephen, “changes in licensing regulation on the back of smoking bans have hampered industry revenue as the recession put a stop to growth in discretionary spending”. As consumers tightened their purse strings and binge-drinking came under fire, nightclubs lost favour with the public and attendance levels stagnated. Smoking bans and relaxed laws for substitute venues have conspired to suppress industry growth and eat into existing market share. The industry is expected to show growth of 1.4% in 2012-13. Over the five years through to 2017-18 revenue is expected to grow on an annual average basis only marginally. Despite a brief period of growth, tight economic conditions and a paradigm shift in consumer attitudes will bear negatively on the industry. Music licensing fees, government regulation, low consumer sentiment, competition from off-licence stores and taxation has all weighed heavily on profitability of the industry.
Regardless of falls in revenue and poor nightclub attendance, the decline in establishment numbers has been subdued. Stephen adds, “given the industry's strong volatility and susceptibility to fashion cycles and social trends, investment risk is high and this discourages large investment in the industry”. However, there are particularly low barriers to entry. The perceived rewards of owning a nightclub have underpinned trends in establishment numbers. An increase in differentiation between clubs has seen some venues branch out to niche markets – as either demographically specific or on a larger scale as ‘super clubs'. Future growth in enterprises will be determined by a combination of carving out a niche in addition to being able to adapt to changing market conditions.
The Nightclubs industry has a low level of market share concentration. It is highly saturated, characterised predominantly by a large number of small single-site operators, which account for the majority of industry market share. The only major company in the industry is Luminar Group Holdings.
For more information on the Nightclubs industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
The Nightclubs industry comprises licensed establishments providing dance and musical entertainment services. The industry is distinguished from public houses, bars, hotels and restaurants, which are principally food and beverage service establishments.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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