A joint study by hospitality research firm CGA and consultancy AlixPartners reveals a modest recovery in London’s hospitality sector. Between September 2023 and September 2024, the number

of licensed premises grew by 1.8% in central London and 0.4% in Greater London. However, the findings highlight ongoing struggles for nightclubs, prompting some to innovate with daytime offerings.

Daytime events are gaining popularity, with DJ Fat Tony leading the trend through his weekly "Full Fat" day rave in the City of London.

In October, Chancellor Rachel Reeves announced a rise in National Insurance contributions from 13.8% to 15% and lowered the threshold for contributions from £9,100 to £5,000. Industry leaders fear this move will hinder recovery efforts.

“I don’t think nightclubs were on their list when they made that Budget,” DJ Fat Tony remarked. “The nighttime economy, which generates billions annually, is losing momentum.”

The study found that between July and September 2024, seven new licensed premises opened daily across the UK, bringing the total to 99,868. Despite these gains, the independent sector remains 15.9% smaller than it was in March 2020 due to Covid-19 and high inflation.

Actress Vicky McClure and her husband have embraced the daytime clubbing trend with their "Day Fever" concept, catering to over-30s who prefer earlier events. McClure highlighted the dual-shift potential of the model, which allows venues to host daytime events and regular nighttime operations, boosting profitability.

“This approach is brilliant because it helps venues recover from the challenges of the past few years,” McClure explained.

The Treasury defended the increase in employers’ National Insurance contributions, citing the need to address a £22 billion “black hole” and fund public services. A spokesperson emphasized measures to support businesses, including protection from inflation-driven business rates and a £1.6 billion relief package for retail, hospitality, and leisure sectors. Additionally, a permanent cut in business rates for these industries will begin in 2026.

Graeme Smith, managing director at AlixPartners, acknowledged the optimism brought by the sector's modest growth but warned of significant challenges ahead. "The plans set out in the October 2024 Budget mean we must view these latest figures through an extremely cautious lens," he said.

While daytime clubbing offers a fresh opportunity for venues, the broader hospitality sector continues to navigate a complex landscape of recovery and economic pressures. Photo by LepoRello, Wikimedia commons.