Millennial Impact: The Evolution of Nightclubs

Millennial

Photo Provided by Hakkasan

Club owners take note: the evolution of nightclubs is entering a new phase.  Adapt to the wants of millennials or face imminent closing.

Who are these millennials?

Millennials are those born between 1977 and 1994 (according to global research firm GFK), making them 21-38 years old and the target demographic for clubs.

  • They are the first generation to enter adulthood armed with cell phones.
  • They keep up with, dictate, and invent the latest trends and technology.
  • 78% of millennials would rather spend money on experiences than things.  
  • Millennials are responsible for the spike in craft beer sales and wine consumption in the United States.

Such preferences sound as though they’d bode well for the nightlife industry. So do they?

 

Do millennials go to nightclubs?

Studies show millennials aren’t frequenting nightclubs the way the preceding Gen Y did. Slightly more than 60% of millennials go out to clubs, and among those who do, only 25% do so more than once a month (ULI and Lachman Associates). Most millennials say they only go out to clubs for special occasions like bachelor or bachelorette parties, to see a specific DJ, or because they’re on vacation in a club capital like Las Vegas or Miami.   

Once-in-awhile attendance doesn’t keep clubs in business. Executive Director of the Nightlife Association, J.C. Diaz, says an average of 6500 venues are closing yearly in the U.S. 

According to the IBISWorld Bar Business & Nightclub Business Industry Report, bar and nightclub revenue fell 9.3% in 2009 as a result of The Great Recession’s higher unemployment rates and lower consumer spending, and the nightclub industry still hasn’t bounced back.

The shuttering of nightclubs isn’t just happening in the US. According to the Association of Licensed Multiple Retailers (ALMR), the UK was home to 3,144 nightclubs in 2005.  A decade later, only about half the number of clubs (1,733) are open for business.

 

Why aren’t millennials frequenting nightclubs?

In an anonymous survey, millennials listed the following reasons for not going to nightclubs: cover charges, expensive drinks, long lines to get in, long waits for drinks, too-loud music, pretension, rude staff, crowds, getting jostled, meat-market atmosphere, inability to have a conversation.  

They say there’s no longer a need to go to a nightclub to meet a potential partner.  That may have been why their parents went to discos, but they see clubs only as a place to hook up and instead use dating apps, which they consider an easier and safer way to meet people.

Millennials say people used to go to clubs to discover new music, but there are much better ways now. One anonymous survey respondent says “people mostly find new music on Facebook, sound cloud, Twitter, Instagram, TV, and through friends.” Another writes “People who like to discover music are at music festivals, concerts, and jazz clubs”. They also point to streaming services like Spotify, Pandora, and Deezer, where you can discover new artists and curate your own playlists.

Privacy elimination is yet another way social media has kept some millennials out of nightclubs. One says “you never know whose Twitter or Facebook you’ll end up on.”

 

Where are they going instead?

IBISWorld notes an emerging trend in consumer spending on packaged beverages for home consumption. Millennials are attending and throwing a lot of house parties.  With just a little effort and not much money, they can buy a nice speaker system online, create a playlist of new artists, and supply food and drink.

Millennials pick venues based on the photos they can post on Facebook or Instagram to garner likes and intrigue and boost their social capital.  Pop-up beer gardens, music festivals, and travels to exotic locales rank among the preferred expenditures of millennials. They’re a generation of foodies who love “discovering” new restaurants and cooking meals of brussel sprouts and bacon for their partners. They are beer, wine, and cocktail devotees who are always looking for the next best drink that they can take photos of for their Instagram and re-create for their next house party. They won’t accept watered down drinks in clubs.

The millennial survey respondents listed the following as the ways they like to spend their free time: “boating, binge watching series on Netflix/Hulu, hiking, biking, traveling, paddleboarding, skiing, kayaking,  drinking wine, rooftop bars, guitar, reading, restaurants, bars, movies, concerts, napping, relaxing, reading the news, walking around the city, discovering new restaurants/foods, flywheel, hanging with friends, home improvement projects, happy hours, bars, and beer festivals.

 

Are nightclubs at risk of disappearing?

The Nightlife Association’s J.C. Diaz says there’s no way nightclubs will ever die off completely. They’ve been around since the days of Moulin Rouge -- being reinvented over the years as Honky Tonks, Jazz Clubs, Dancehalls, and Discos. As long as the human desire to go out and dance, listen to music, mingle, and have fun exists, nightclubs will live on. But Diaz acknowledges that “the industry is definitely evolving.”

Diaz says people will always want to go out and dance with a group of friends, or go to a nightclub for a stag party or to experience the artist. Millennials agree that people will always want to go to clubs for certain occasions to get dressed up, dance, and socialize.

Nightclubs must adapt to the wants of each new generation, and as long as they do, they will always be in business.

 

What is the future of nightclubs?

J.C. Diaz predicts, “The industry is definitely evolving.  You’re beginning to see people focused on fusion or flavors whether it be cocktails or food. You’re seeing new design elements and advanced LED technology.  You can make your place look like you’re in the middle of the forest or in space.  It’s becoming more of a real life experience when you get companies like Cirque du Soleil partnering up with a club.”

Some nightclubs are an extension of concert venues.  Many concert venues offer bottle service, food, and now you have these hybrid concert venues/nightclubs doing the same with live music, dancing, DJs, food and drink.

You’re beginning to see chill zones and free water.  Most people try to sell bottles of water for $5.  Giving it out for free is a good idea if you want people to stay and safely dance the night away.

The production value is increasing – before it used to be a black box, a dance floor, a few lights, a DJ in the corner. Now you get LED walls, LED stages, Funktion One soundsystems, laser lights. They’re providing a theme of the music, or a theme of the artist, a flair in cocktail making, the fusion of natural fruit. 

Urbanization is a great thing for nightlife and in the future we’ll see music cities incorporating plazas for musicians to play, restaurants and ice cream shops open late, and all of this creating foot traffic in these areas that is great for nightlife and nightclubs.

From the Mouths of Millennials

Some millennials who rarely go to clubs share what they’re looking for in the nightclub experience:

  • “I think the way of the super sized club is dying and the hole in the wall is having its rebirth. Personally, the small places are way more fun anyways.”
  • “I just think that nowadays clubs should be doing more than what they have been in the past if they want to keep their customers coming back while still attracting new ones.”
  • “Host an event with some type of hook. Clubs are most interesting when they are venues for specific events rather than just a place to go on the weekend.”
  • “I’m looking for better music, free water (sometimes water costs a lot), and cooler rooms/decor (or more rooms like Output).”
  • “Important for me when going to a club is the concept of the place. This goes hand in hand with the talent. I like a dark room (with appropriate lights, of course), with a great sound system, with a DJ who plays the kind of music I love. Then I am as happy as I can be.”
  • “I told myself that if I ever own a club, I am not going to have VIP. What that does is cause class elitism among the patrons in your club. People came to have a good time. They didn’t come there to be reminded of their social status in life.”
  • “Lower the cost of drinks/covers. Make it easier/faster to get the service at the bar.”

Get more hospitality industry reports at the Nightclub & Bar Show during the Trends & Research Track.  Find out more today at www.ncbshow.com.