The Top 100February 1, 2009 By: Donna Hood Crecca Night Club and Bar Magazine
Where are the largest-volume independent nightclubs, bars and lounges in the United States? The short answer is — no surprise — Las Vegas, New York, Los Angeles, Miami and Chicago. The long answer is that the largest-volume venues can exist anywhere an operator combines the science of savvy management with the art of a great concept, stellar service, unique and well-executed drinks, outstanding entertainment and promotion initiatives that consistently attract patrons. No easy task, but as this list proves, it can be done.
A quick look at the 2009 Nightclub & Bar Top 100 reveals that art and science are working in perfect harmony not only in the big five markets, but also in areas ranging from Boston to Atlanta to St. Louis to Sturgis, S.D., where successful operators are producing total revenues ranging from $3 million to in excess of $50 million annually.
Such are the findings of the study undertaken by Nightclub & Bar and Chicago-based market research firm Technomic, Inc., who partnered to develop the first revenue-based listing of top-producing independent nightclubs, bars and lounges in the nation. The 2009 Top 100 is culled from primary and secondary research (see sidebar), and provides key insights into this important segment of the on-premise marketplace.
"Clearly, Las Vegas maintains its dominance as a nightclub destination," observes David Henkes, vice president of Technomic and leader of the firm's adult beverage practice. "Nearly a quarter of the Top 100 venues are located in Las Vegas. In fact, nearly three-quarters of the Top 100 operations are located in the top five metro markets, and most of them are nightclubs and dance clubs, which cater to a young adult demographic and are built to accommodate larger crowds."
The inclusion of venues in smaller or secondary markets indicates that the right operator hitting the right demographic with the right concept and suite of services can also generate significant sales volume.
A survey of independent nightclub, lounge and bar operators used to develop the Top 100 list revealed that 60 percent of respondents experienced increases in total revenues in 2008; 11 percent saw sales decline and 29 percent reported no change. On average, alcohol accounted for 71 percent of total revenues, with cocktails generating the lion's share of drink sales — 52 percent — and beer and spirits contributing 38 percent and 10 percent, respectively. Food accounted for an average of seven percent of venue sales.
Looking ahead, Henkes projects that nightclubs, bars and lounges will fare better than their casual dining colleagues in the face of the downward economic trend. However, he cautioned that as unemployment rises and the recession continues to impact more and more consumers, the young adult demographic that favors these independent nightclubs, bars and lounges will likely curb their discretionary spending.
"To succeed in 2009, operators will need a clear value proposition: understand why people come to your bar or club and deliver an experience they can't get elsewhere," Henkes observes. "In the best of times, it's difficult to keep a hot club hot — many of these Top 100 clubs have done it consistently for years — but all bar operators will need to work smart to keep going and growing. Each individual concept needs to continuously reinvent itself to stay fresh for today's customer, who is becoming even more discerning in where they spend their entertainment dollars."
Editor's Note: In previous years, the Top 100 was an Editors' Choice program. For 2009, Nightclub & Bar partnered with market research firm Technomic Inc. to develop the list based on revenues, the first step in an ongoing program designed to assess the size and various segments of the independent nightclub, bar and lounge market in the United States.