The UK’s largest nightclub operator, Deltic Group, has enough cash to last another two months. Its chief executive, Peter Marks, has doubts the company can survive much longer.
“Can we last until November? Maybe, but it’s going to be difficult,” he said.
While retailers, restaurants and other UK businesses were given permission to reopen weeks ago, nightclubs — with their sweaty dance floors and loud music — remain out of bounds.
Deltic, which owns the Pryzm, Atik and Eden chains, has 54 clubs in the UK that have been closed since March. It is one of many club operators globally that are in a desperate financial state.
The UK group began a consultation last week to lay off 400 staff, and without an opening date in the next month, Mr Marks warned that number could rise to 1,000 or more.
Many venues were in a precarious financial position even before the pandemic hit. Higher rents in city centres, combined with more health conscious consumers who drink less, and the rise of online dating, have led to closures. In Berlin, the phenomenon has been termed Clubsterben, or “club death”.
Coronavirus has ramped up pressure on the sector, with the Night Time Industries Association warning that about 60 per cent of UK clubs will not survive another two months without further government support. Fresh curfew measures in some UK regions would “compound” the problem, it said.
In the UK there are a handful of large privately owned operators — Deltic, for example, generated revenue of about £100m in the year to February 2019, according to its latest accounts — but the industry is fragmented and most sites are individually run. “Some people have put their houses on the line,” said Michael Kill, chief executive of the NTIA.
Already in the US, where about 66,000 venues generate industry sales of $745bn, according to the American Nightlife Association, several cities and states have ordered fresh closures in response to flare-ups of the virus.
Kelder Summers-Jones said her New Orleans cocktail and cigar venue, Whiskey & Sticks, was able to open only for a few weeks before all the city’s bars were shut. Unless the bar can soon reopen, it would have to close permanently, she warned.
Her husband had to dip into his pension savings to fund the bar. “The loss will be tremendous for us,” she said.
The shutdown of the nightlife sector also has an impact on other industries. Hairdressers, taxi companies and kebab shops have all struggled without the trade.
Morley’s, the London-based chicken shop chain, said sites in popular clubbing areas had lost 25 per cent of sales, while Dale Hollinshead, owner of the Hazel & Haydn salon in Birmingham, said blow dry and nail appointments had halved.
Steven Pippin, marketing officer of LA Taxis, a car hire company in Newcastle, said it had lost all its lucrative work ferrying people to clubs after 10pm, when tariffs go up.
“We [used to] have a lot of drivers still logged in at 4 or 5am taking people home from nightclubs,” he said. “Now it stops at 12 or one.”
The biggest challenge for most operators trying to convince authorities their venues are safe is the dance floor.
A survey of 200 UK venues by the NTIA found that almost two-thirds thought reopening with social distancing in place would not be economically viable.
Keiran Neely, who co-owns the Music Room club in Atlanta, said: “If it’s a 10,000 square foot place and you have 50 people in it, that doesn’t seem unrealistic — but you can’t pay the electric bill on that.”
Martin Greenhow, chief executive of MOJO bars, a small chain of cocktail bars with dance floors in northern England, said he had been able to reopen but the experience was more staid than usual.
Music had to be played at half its usual volume to stop customers shouting — and therefore spreading respiratory particles — and security staff were on hand to prevent strangers making amorous advances.
Several business owners pointed to features of nightclubs that would help to facilitate safe reopening: younger customers, who are less vulnerable to the virus, and scanners for checking ID cards at the door, which would be ideal for track and trace.
In Deltic nightclubs, air was changed more than 15 times per hour, Mr Marks said, “[more] than an operating theatre”.
Owners also highlight that the closure of clubs has encouraged illegal raves that lack any safety measures.
But authorities remain unconvinced. The sector has been blamed for several clusters of Covid-19 cases.
In South Korea, more than 100 coronavirus cases were linked to one man visiting several Seoul nightclubs. On Italy’s Emerald Coast, a surge in cases was linked to partygoers, with several visitors to the area including Formula 1 mogul Flavio Briatore and former Italian prime minister Silvio Berlusconi testing positive for the virus.
Desperate for revenue, some nightclub owners have come up with innovative ideas to run socially-distanced events. Virgin Money, which sponsors an arena near Newcastle, has launched a series of gigs with viewing platforms two metres apart, while the Paradise City festival near Brussels, usually land-based, took place on boats.
Mr Marks of Deltic Group said that with students returning to universities this month the sector was also losing one of its most lucrative periods.
“We are now missing our big ability to build cash and equally as frustrating is that there is demand for what we do because the young people want to go out,” he said.
Additional reporting by Erika Solomon and Silvia Sciorilli Borelli