Will the night trade adapt as the on-premise reopens?

As many countries face an economic downturn caused by Covid-19 lockdowns, it is evident that pressures are mounting to relax restrictive measures to try and kick-start damaged economies. In recent weeks, governments have started to lay out frameworks for easing restrictions, with an eye on keeping public health as intact as possible. But it’s the night trade (venues that serve alcoholic beverages in crowd-based and/or high-energy settings) that are facing additional challenges as well.

An easing of restrictions for the on-trade

China is one of the countries that has advanced the most in reopening its hospitality sector, with most restaurants in the country back open again, albeit with varying degrees of official restrictions. As consumers have not initially shown an overwhelming enthusiasm in returning to their pre-Covid-19 on-premise habits, the Chinese government is keen to regain a degree of normality to help support an economic rebound. Attendance of restaurants is openly encouraged – an earlier measure to suppress sharing dishes between diners for fear of furthering infection rates has been quietly dropped, as this would run counter to Chinese food consumption patterns. Australia and some Southern European countries are also now beginning to reopen the on-trade, although with significant restrictions.

Other markets, by contrast, are still at the beginning of their journey in reopening the on-premise, with countries like the UK and France seemingly more cautious than others. At the other extreme, countries like South Africa have opted to keep a complete ban on the sale of beverage alcohol in place, whether in off- or on-premise, and even India, which jumpstarted its ease on regulations (when most states abandoned a six-week ban on alcohol consumption on 4th May), is still keeping the hospitality sector firmly shut.

Additional challenges for the night trade

“Delivery and take-away options for wine, beer and cocktails, as well as the cautious reopening of table service, are helping to support the on-premise as governments review reopening plans. However, it is the night trade, where crowds are core to the concept, that is proving more challenging to address. Responding to these challenges will be particularly important to governments that rely on night-life tourism as a key economic driver too,” notes Mark Meek, CEO of the IWSR.

Of prime concern is the viability of opening standing-only bars and nightclubs due to the nature of how people want to enjoy that experience – usually with close social interactions, chatting at crowded bars, or enjoying time on packed dance floors with DJs or live music. This is made even more challenging following the announcement by South Korean authorities to once again close the night trade over a recent cluster of infections in Seoul’s entertainment quarter. Developments in various countries are, of course, closely watched by other governments as they themselves formulate public policy.

China’s karaoke clubs (KTVs) have offered the country a way to ease back into the night trade. Although in Beijing the night trade is still firmly shut, elsewhere in the country, karaoke bars, where small groups are quite naturally sequestered, are easier to manage with respect to social distancing.

Some countries are also experimenting with different types of social distancing measures in the night trade. Germany, for example, has opened some night trade, with each German state enforcing different rules. For example, regulations vary on whether to allow customers to only sit in open outdoor areas, only offer table service, have compulsory food offerings and/or change opening times. Some states have also mandated that all guests register for the purposes of contact tracing.

Even if night trade venues open with social distancing measures in place, it will likely take time for customers to transition to the new experience. Some pubs in the UK, for example, began offering take-away pints, where orders were placed outside pub doors and with the intention of customers enjoying their pints at home or in parks, in-keeping with government guidelines. However, some pubs found that after paying for their take-away pints, customers spent their time in the pub front gardens or curbside, calling friends to come join as well. Police eventually had to break up crowds and individual ventures were closed.

As venues reopen, they may need to invest in more staff to help control crowds – a tough prospect when they are already facing fewer customers and lower sales.

Nevertheless, in countries where venues are gradually opening, some operators are responding to the easing restrictions with creative approaches to encourage customers to visit. Cafe Rothe in Germany, for example, gave customers hats with swimming pool noodles attached to them in order to ensure social distancing. Mediamatic ETEN restaurant in Amsterdam installed separated greenhouses along the waterfront, while restaurants in Thailand have installed Plexiglas dividers between booths and tables to ensure distancing is enforced.

The next few weeks should provide some vision for the future, with governments looking at each other for guidance on what works and what may not.

The findings from this article are based on IWSR’s report series examining the impact of Covid-19 on 12 key markets. This report series is updated every two weeks, in order to help the beverage alcohol industry stay on the pulse of the impact of the pandemic around the world. This report series is available complimentary for current subscribers to the IWSR Global Database.

You may also be interested in reading:

Consumers may be slow to return to the on-premise even as regulations ease

Cocktails to-go offer premium drinking experiences in lockdown

Drinking in an economic downturn

To stay ahead of market trends and analysis, subscribe to receive our Industry Insights directly to your inbox.