In an article first published in May, Philip Kolvin QC and Alicia Scholer presented a detailed and alarmingly grave analysis of the precarious position global nightlife industries find themselves in, what circumstances created this and the drastic re-thinking required to ensure the future of these industries.
One month later, the article’s projections of the impact and recovery of COVID-19 have already proven prophetic, with many short-term predictions already becoming a reality as countries push to reopen their economies.
We encourage you to read the full article, originally published on The Institute Of Licensing site. It is about a twenty-minute read, so for those pressed for time, we’ve created a heavily abridged version with excerpts and commentary below.
“What we have been, or now are, we shall not be tomorrow.” – Covid-19 Metamorphoses.
“In this article we consider the long-term impact of Covid-19 on the future of the social economy. We argue that current discourse concerning the transition from lockdown to gradual re-opening is necessary, but will be insufficient to save this important cultural and economic sector. The leisure sector was already undergoing rapid change in response to recent socio-economic trends. The coronavirus has served to catalyse those trends. The determinants of future success of the social economy will go well beyond short term fiscal fixes. Rather, there will need to be far-reaching changes at town planning, regulatory and industry level.”
What’s in a name?
The authors begin by explaining why they use the term ‘social economy’, and why the nomenclature matters.
‘Social economy’ avoids the stigma surrounding the phrase ‘night economy’, which has “become synonymous with negative externalities such as binge drinking and disorder.” It also recognises that, “many leisure venues trade all the way through the day and into the night and that it is futile and unhelpful to categorise them as day-time or night-venues.” Finally, there is an argument for going further by replacing the term ‘economy’ with ‘ecology’, recognising that “not all of what we value at night has to do with money.”
“Language must be chosen which reflects both the social and economic value of life at night, and does not induce a gag reflex in listeners, be they policy-makers or local communities.”
“The social economy needs to be seen as an asset you do something for, not a problem you do something about.”
In this section the authors list and discuss the challenges – which were cumulative, in many instances exponential and in some cases overwhelming – which have threatened the social economy of cities across the world for the past two decades.
- A decrease in high street retail, due to a) the rise of online retail, avoiding urban centre rent and rates, and b) the tendency for the younger generation to prefer experience over material assets.
- A reduced interest in alcohol, for so long a mainstay of the social economy, as the younger generation rebels against their parents’ drinking habits.
- A large growth in home entertainment, due to factors like the rise of streaming and delivery services, the possibility of finding a partner online, banning of smoking, and so on.
- Gentrification, resulting in noise complaints which lead to regulatory clampdown, and higher rents for venues which rarely trade on high margins.
- Austerity, which negatively affects the amount spent in the leisure economy, with people not only going out less, but consuming – or pre-loading – before they do.
“The overall effect has been to produce significant and ultimately unsustainable income reductions in many types of venues, with drinking establishments, nightclubs, music venues and retail establishments hit particularly hard. In days gone by, pubs might have competed with other pubs for custom. Now they compete with everything, including online commerce. Even before the advent of the virus, none of these trends looked remotely likely to be reversed.
“Just as Covid-19 is more likely to prove fatal to individuals with underlying health conditions, it is also more likely to cause permanent damage to those towns and cities which have failed to build resilience into their social economies.”
“This long-coming and accelerating crisis on the high street has not generally been met with a thorough or effective policy response. In some cases, the reaction of the government has been to encourage change to residential units. This builds the balance sheets of investors and landlords but serves simply to accelerate the demise of the social economy, for “no entertainment venue lost to housing will ever be returned to its former use, while the allure of the centre is reduced and the pressure from residents and regulators on the venues which remain is increased.”
In this section the authors acknowledge the growing movement in recent years for the social economy to unite and defend itself against the challenges raised above, resulting in some institutional recognition of the role the social economy plays in improving the livability and desirability of cities, and appreciation of the social economy’s symbiotic links to the creative sectors.
This change of thinking “has been reflected in the inclusion of culture and cultural assets in city planning and regeneration policies, and the promotion of culture-based regeneration of urban centres.”
The authors highlight new policy ideas which have emerged, such as the Agent of Change principle, and the rapid growth of the role of Night Mayor, as the clearest manifestation of this recent trend, with posts filled in over 50 cities worldwide and growing since the first Night Mayor (Mirik Milan, cofounder of this blog) was introduced in Amsterdam in 2012.
“All the while, creative entrepreneurs have set about forging a new, diverse social economy. So we have seen the rise of ‘competitive socialising’ (escape rooms, e-gaming bars, hi-tech table tennis, bowling, darts, mini-golf, paintballing and the like), chameleon bars, immersive theatre appealing to a new generation of theatre-goers, premiumising, elision of the concepts of bars and restaurants, the creation of instagrammable settings and pop-ups in secret and surprising locations. All of this might loosely be termed the ‘experiential economy’.”
“The conceptual division between pubs and restaurants is fast disappearing and policy-makers who use it as a basis for their regulation are fighting a battle that has long since evaporated.”
“In summary, social economies around the world were poised between inexorable decline and a creative-led revival. Into this scene, enter Covid-19.
Microbial presence, global impact
The scene now set, the authors begin discussing the impact of COVID-19 on the social economy, by detailing some of the immense financial and cultural losses already suffered, and emphasising that bail-outs during the lockdown period will not be enough to avoid long-term devastation, and in some cases collapse, of cities’ social economies.
“What is clear is that every government will have taken on mountains of debt which our children and probably theirs may be paying off for the rest of their lives. The bandwidth for social regeneration will be limited, and businesses and individuals will emerge from the lockdown much the poorer. These are the stark facts with which it is our societal duty to grapple as we plan ahead.”
“It will not be enough for governments to work out how to get out of lockdown. That is equivalent to moving the patient from intensive care back to the wards without considering their rehabilitation or how they will fend for themselves outside.”
“Despite governmental proclamations, we simply do not know when or even if there will be a vaccine for Covid-19. Until that time, there will be social distancing, or rather, the preferred term of the World Health Organisation, “physical distancing.”
The authors go on to describe how the necessary changes to operation for most venues post-lockdown create a climate which will make it extremely difficult to turn a profit.
“Physical distancing is anathema to the leisure industry”
“…which relies on the animated vibe generated by proximity, and economically toxic for those venues which depend for their viability on a few packed hours on weekend nights.”
“If the government prescribes far-reaching mitigation measures such as waiters in masks, Perspex screens between tables and the rest of it, or employers do so voluntarily to protect their staff from illness and themselves from legal action, a further cohort of potential customers will decide that going out is not worth the candle and gather at home instead. Moreover, some percentage of customers will have become habituated to receiving their entertainment online as well as welcoming the cost savings associated with a night in.”
“All things being equal, the social economy cannot return to its former levels, let alone exceed them, at least prior to a widespread programme of vaccination…”
The authors also ask us to think beyond this pandemic, into the next, and the one after:
“Will entrepreneurs want to sink their savings into long city-centre leases at premium rents when all the fruits of their labour, courage and creativity can be wiped out, at a stroke, by another microbe whose cousins the government failed to plan for or adequately control?”
The foundations for recovery
The authors suggest four principal factors that will form the basis of a return to a thriving social economy:
- The necessity of In Real Life (IRL) social experiences for the human condition, the corollary of this being that the venues, experiences and overall ecology of the social economy “needs to be recognised by policy-makers as a social good.”
- The social economy should not just be seen as something which needs to be regulated by the government, but promoted sustainably instead.
“There has been a tendency for the public sector to leave the development of the leisure economy to the market, and then to step in and regulate it, as though it were an unruly beast to be tamed…”
“We have sufficiently sophisticated tools now to do better than rely on reactive regulatory measures as the policy instrument of choice. There is ample experience from around the world of what works and channels of learning and communication to disseminate best practice.”
- The ability to trade profitably over more hours and/or a larger footprint, in order to earn more money from a relatively poorer post-pandemic population.
- The development of “a public infrastructure that facilitates our ability to visit the social economy safely, efficiently and cost-effectively, not eventually, but now.”
Here is described the conditions upon which businesses are allowed to re-open, in order to be “weaned off the drip-feed of government support,” an incremental process during which human density is reduced by law.
“There will need to be controls on entrance and exit to avoid over-capacity. Visits may be time-limited.”
“In some jurisdictions, customers will carry proof of their good health i.e. an ‘immunity passport’. In others, their temperature will be taken at the door.”
“Care will need to be taken with objective entry procedures and civil rights monitors to ensure entry to highly coveted social districts and venues are not restricted to persons based on race, ethnicity or other demographics.”
“Staff will be in masks and gloves. Menus will be shorter to reduce kitchen interaction and the progressive march of mechanisation in restaurant kitchens will be stepped up. Sanitiser stations will be prominently located. Payment will be cashless and contactless. Surfaces will be disinfected frequently, entrances and exits may have to be segregated, and extra staff will be needed for sanitation and security duties…”
But of course, all of these mitigation measures cost money. If the government pushes the entirety of this bill across the table to venue operators, closures will follow.
“However well-intentioned the public sector’s approach to recovery, it is in the end a numbers game in which income is down and costs are up.”
And now for some detailed solutions. The authors emphasise the need for an entirely “new paradigm” in order for the social economy to survive and even prosper long-term. There are ten aspects to this…
“First, leisure venues will need to expand their operation in terms of time and space.”
“Venues are much less likely to survive if their efforts are directed at attracting a pre-loaded twenty-something crowd in large numbers on two nights a week. That is a largely defunct model. Rather, the early evening should be promoted afresh as a time for socialising.”
“Many venues will also need the opportunity to spread out onto tables on the sidewalk, where it is potentially easier to maintain physical distancing and customers will feel more confident since they are in the open air.”
“The proliferation in street-use by leisure venues will need to be the subject of legislation so as to streamline the attainment of planning and licensing approvals subject to hours which prevent undue conflict with local residents…The hours of outside uses will be controlled by public authorities according to local circumstances.”
“Second, the enforcement of distancing on public transport will cause an increase in car use, cycling and walking. In many towns and city centres, this will not work.
“Sidewalks will be needed for leisure use, and more space, not less, will be needed by pedestrians. This can only be achieved by reducing car use in such centres.”
“In the experience of the authors, every significant centre which has banned the use of cars, whether entirely or at particular times of day, benefits from an uptick in environmental quality, sociability, and user enjoyment. In due time, the allocation of 80% of the public space between building lines to motor vehicles will come to be seen as a foolish historical aberration.”
Third, the social economy does not depend only on bars and restaurants.
“We need to see a renewed emphasis on the public realm, with a premium on safety, accessibility and environmental quality.”
“A busy street is a safe street, but the feeling of safety is demonstrably augmented by street ambassadors. The scandalous loss of WCs will be reversed, and every civilised urban centre will provide plentiful opportunity for free water. Street-scenes will be greened, pocket parks and micro-rest spaces will be installed, while town squares will benefit from free leisure activities such as play equipment, or just games such as table tennis and chess, benefiting children (who are so often forgotten in debates about the social economy) and adults alike. Heritage buildings, bridges and arches will be artfully lit. Where the public weal cannot afford improvements, corporate sponsorship will fund the gap. The buzz of a great public realm is itself a magnetic attractor of users, some portion of which will visit and help fund leisure venues.”
“It is no pleasure at all to visit a venue via a semi-comatose street. The public and private realms are symbiotic, and good local administrations recognise this and provide for it.”
“Fourth, it will be necessary to break down rigid policy structures. In a world in which young people are drinking less, it is largely unnecessary for policies to presume against any sale of alcohol. What about a glass of champagne before the opera, a cocktail while visiting a museum, a glass of wine while shopping at a high-end clothing store, a beer after working out at the gym, or a glass of champagne while at a nail salon or beauty parlour? The contexts for drinking occasions are so multi-various that a monolithic policy is liable to frustrate operations which should be encouraged.”
“Nor are policies which presume in favour of restaurants only when they are sit-down affairs with full table meals brought by uniformed staff appropriate in a modern environment. The writers of such policies have failed to notice therevolution in eating out, including the astonishing rise of high quality street food, tapas, small plate restaurants, cocktail bars with food and a myriad of formats which do not depend on white tablecloths and silver service.”
“Instead of asking whether a proposal ticks a preordained box, the simple question should be whether it does any harm and, if it does, how this can be mitigated without disproportionate restraints.”
“Fifth, local government bodies should reflect the public’s aspiration for their social economy in a vision, and then set about achieving the vision through positive planning, encouragement of investment, social marketing and public realm improvements.”
“Local authorities should keep track of their social inventory and, in some cases, might purchase assets to achieve their vision.If high rents mean that music venues are in short supply, local authorities could purchase former car parks, stores or railway arches and convert them into rough and ready venues, protecting the use forever… The vision of a Sociable City should be developed and promoted with the assistance of Night Mayors and through social messaging and marketing.
“Sixth, it is inevitable that a portion of the population will prefer not to travel into town and city centres for work or entertainment. So authorities should seek to furnish communities with all they need within 15 minutes of their home, by way of retail, services, parks and leisure. [This notion] not only seeks to reduce the need to travel, but can also help to ensure that money earned locally stays local.”
“Seventh, measures will be needed to protect tenants of leisure venues and also to protect venues from a wholesale conversion to residential uses.”
“Town and city centre rents have risen beyond the means of many small businesses. In many cases, rents agreed in different market conditions will become unsustainable in the post-Covid era. Sensible landlords will adjust rentals downwards to preserve the tenancy. In other cases, the government should look at legislation to permit tribunals to refix rental levels in the light of these changed circumstances.
“The costs and consequences of this virus should not fall on tenants alone.”
“Eighth, the response of the insurance industry to claims on business interruption policies is widely viewed as unconscionable. Policy-holders have paid premiums for years if not decades, only to discover that, through recourse to convoluted exegesis of obscure policy wording, insurers are able to deny liability with impunity.”
“Government, insurers and the leisure industry will need to agree on standard wording so that it is perfectly clear in the future whether businesses are covered against future pandemics, since Covid-19 is the latest but won’t be the last. Without effective insurance, the incentive to invest will no longer be there.”
“Ninth, the industry can provide an alternative to home entertainment, but it cannot wage war against it.”
“Streaming initiatives such as United We Stream in Manchester, or the broadcast of plays by the National Theatre in London have demonstrated how you can actually widen your customer base by taking advantage of new media, rather than railing against it. Pubs and restaurants will need to ramp up their home service, so as to provide an effective dual income stream.”
“Tenth, sad to say, there will be centres which will no longer be fertile soil for the growth of the social economy. Some have lost so much retail, or developed so much housing in its stead, that it is hard to see the rebuilding of a critical mass of leisure venues in the current climate. Centres which are over-reliant on big offices will suffer in the post-Covid era, since large businesses will be less keen on gathering all of their employees in one place. Strips of takeaway premises built to service such centres will themselves struggle to survive. In these cases, public authorities may well consider that they need to adapt their centres and promote alternative uses such as community hubs, artists’ workshops, markets, music venues and co-operative ventures.”
“For the social economy, the gradual lifting of lockdown globally is not the beginning of the end, or even the end of the beginning. For the leisure venues which are integral to our social economy, it is a new beginning entirely. They will enter the new era saddled with debt in a society impoverished by the gargantuan public expenditure required to keep society afloat and seriously depleted fiscal revenues, and with their principal customer base—the young—hit hardest of all.”
“Any suggestion that the social economy will bounce back due to a release of pent up demand is magical thinking. Once lockdown is over, venues will confront a world in which customers are fewer, spend is lower and costs are higher. This will put a large percentage of operators under, and the danger is that once gone they will never be replaced.”
“In this article, we have argued that:
“The social economy is a public good and is a marker of an effective, culturally-engaged human settlement. As such, it is imperative that all actors in that economy—both public and private—collaborate to re-imagine the social economy for the post-Covid era.”
“It is possible to envision a modern social economy set in a green, car-free environment, with animated street-scenes, an interesting and lively public realm, a more diverse offer and clientele, spread over a longer trading day. None of that thinking is new, but the impact of the virus has promoted it from a nice-to-have to a must-do.In this way too, the virus is an accelerant. Without such thinking, we anticipate that the weakest centres will enter spirals of decline. The time for action is now.”
“The story of this crisis is that we failed to spend billions on urban resilience and are now paying the price in trillions. The failure of proactivity was reflected in the cost of reactivity. It is hoped that in planning the future social economy, we do not make the same mistake again.”
Philip Kolvin QC is a licensing barrister, practising at Cornerstone Barristers in London, a Patron of the Institute of Licensing and an Associate Fellow at Westminster University’s Centre for Law, Society and Popular Culture.
Alicia Scholer is the Vice President of the Responsible Hospitality Institute