How Competitive Socialising is Reviving the post-covid UK Hospitality Sector

The UK hospitality sector, long beleaguered by the impacts of the COVID-19 pandemic and the ensuing economic challenges, is witnessing a resurgence, driven by a new trend: competitive socialising. This shift towards activity-based leisure experiences is breathing new life into an industry that has been struggling with closures, reduced footfall, and increasing operational costs. More here from the Financial Times.

Competitive socialising venues—bars and spaces where patrons can engage in activities like darts, mini-golf, and ping pong—have become a significant factor in the hospitality sector's first quarterly growth in outlet numbers in two years. According to recent research from CGA by NIQ and AlixPartners, the number of hospitality venues in the UK rose by 0.5% between March and June 2024. While this increase may seem modest, it represents a crucial turning point for an industry that has seen outlet numbers plummet by 14% since the onset of the pandemic.

What’s driving this growth?

Consumers are increasingly seeking out shared experiences that go beyond just eating and drinking. Themed bars, in particular, have seen a remarkable 28.9% increase in numbers compared to the previous year. These establishments offer more than just a night out; they provide a platform for social interaction through games and activities, catering to a diverse range of preferences. This trend aligns with broader shifts in consumer behaviour, where experiences are increasingly valued over material goods.

The financial success of competitive socialising venues underscores their popularity. Companies like Red Engine, which operates the Flight Club darts bars and Electric Shuffle shuffleboard venues, reported a 27% increase in revenues in 2023, with plans to expand both domestically and internationally. This growth comes despite the ongoing cost-of-living crisis, suggesting that consumers are willing to prioritize spending on memorable social experiences.

However, this rise has come at the expense of traditional nightlife venues such as late-night bars and nightclubs, which have seen a continued decline. This shift away from late-night revelry towards daytime and early evening outings reflects changing social habits, likely accelerated by the pandemic.

While the hospitality sector still faces significant challenges, including inflation and rising operational costs, the growth in competitive socialising venues offers a beacon of hope. It suggests a potential path forward for the industry, one that embraces innovation and adapts to changing consumer preferences. As the sector continues to recover, the success of these experiential venues could serve as a blueprint for the future of hospitality, where the focus is on creating unique, engaging experiences that draw people together.

Summary of Key Points:

• Competitive Socialising: Activity-based venues like axe-throwing bars and mini-golf have driven growth in the UK hospitality sector.
• Industry Growth: The UK hospitality sector saw a 0.5% increase in outlet numbers from March to June 2024, the first rise in two years.
• Consumer Preferences: There is a growing demand for shared, experiential leisure activities over traditional dining and drinking.
• Economic Resilience: Despite economic challenges, companies like Red Engine have reported strong financial performance and are expanding internationally.
• Shift in Social Habits: There’s a move away from late-night bars and nightclubs towards more daytime and early evening social activities.

Exam-Style Discussion Questions:

1. Evaluate the impact of changing consumer preferences on the growth of themed bars and competitive socialising venues in the UK.
2. Discuss how the cost-of-living crisis might influence consumer behavior in the hospitality sector.
3. Analyze the potential long-term economic effects of the decline in traditional nightlife venues like nightclubs on the broader hospitality industry.
4. To what extent can the success of competitive socialising venues be seen as a sign of economic recovery in the UK?
5. Critically assess the role of innovation in reviving the UK hospitality sector post-pandemic.

Glossary of Key Economic Terms:

• Casual Dining: A style of dining that offers moderately priced food in a relaxed atmosphere, often with table service.
• Competitive Socialising: A trend in hospitality where venues combine social activities (e.g., games, sports) with food and drink to create an engaging experience.
• Cost of Living Crisis: Economic conditions where essential goods and services become increasingly unaffordable, typically due to inflation and stagnant wages.
• Experiential Leisure: A form of leisure that focuses on creating unique, memorable experiences for participants, often involving interactive activities.
• Inflation: The rate at which the general level of prices for goods and services rises, eroding purchasing power.
• Nightlife: Social activities and entertainment that take place in the evening or late at night, typically in venues like bars, clubs, and restaurants.
• Operational Costs: Expenses associated with the day-to-day functioning of a business, including wages, utilities, and rent.
• Outlet Numbers: The total number of physical locations where a business operates, such as restaurants, bars, or shops.

Retrieval Questions for A-Level Students:

1. What is competitive socialising, and how is it impacting the UK hospitality sector?
2. Why have themed bars seen significant growth in the past year?
3. How has the cost-of-living crisis influenced consumer behavior in the hospitality industry?
4. What are some reasons for the decline in late-night bars and nightclubs?
5. How have companies like Red Engine responded to the rise in demand for experiential leisure?