More and more cities are aware that the night-time industries contribute to their sense of global identity, their local economy, and to their attractiveness for visitors. But Resonance has long maintained that the factors that make a place attractive to visitors are also those that make it desirable to business. So what’s the role of nightlife in the prosperity of place?

Anyone who has visited the resort town of Whistler, British Columbia, has met the Australians. They’re the genial, hard-partying lifties, barkeeps, and hotel reception people with work visas who spend a year or two in Canada mastering the art of all-nighters-followed-by- powder-days. They come by their youthful, rowdy, free-wheeling reputation honestly. Sydney, Australia, capital of the province of New South Wales and home to the iconic winged opera house, was once considered a world destination for travelers seeking life in the night.

Now it’s considered a cautionary tale about what happens in a city when the lights go out on its nightlife.

Sydney's nightlife is suffering after recent legislation.

SYDNEY’S OVERSTEP ON NIGHTLIFE

It started with two tragedies: In separate incidents in 2012 and 2013, two young people enjoying festivities were punched (each once) by drunks. Bizarrely, in each case, the blow proved fatal. The deaths led Sydney to seek political solutions to curb booze-fueled violence, and the so-called ‘Lockout Laws’ were born: since 2014, no one may enter venues in the so-called ‘lockout zone’ (in the city’s central business district) after 1:30 a.m., and no liquor is sold after 3 a.m. (There has been some softening of the law since, but the effects are still being felt.)

The result has been a dramatic decrease in violent incidents—and steep decline of the night-time industries in Sydney.

Figures from Liquor & Gaming NSW show that 418 licensed premises have closed in the Sydney central business district and Kings Cross since 2014, while 242 small bar and on-premises licenses were granted—amounting to a net loss of 176 venues. For proponents of the law, that’s 176 fewer opportunities for injury or worse. For opponents, it’s 176 fewer venues that could have employed people, paid taxes, given visitors from around the world a place to meet, engaged live bands that may or may not have been on the road to stardom, and contributed to a buzzy, creative heart for the city.   

The lockouts “have changed the soul of Sydney,” restaurateur Vicki Wild told the Sydney Morning Herald before heading to Melbourne to start a new venture. “It’s made Sydneysiders think differently about their city. And I think that’s a real shame, because we don’t feel international.”

Bar owners and entertainment owners around the world will tell you that the general trend with the Millennial generation is to frequent nightclubs and bars less than prior generations. Whether that’s because of a shift in values, tastes, or competition from a host of new on-demand digital entertainment options like Netflix or social media platforms like Facebook, is unclear.

WHY NIGHTLIFE DRIVES INVESTMENT

What is clear, based on Resonance Consultancy research on U.S. cities, is that the number of nightlife experiences has not only a strong correlation with the number of foreign visitors a city attracts, but the amount of foreign direct investment it receives as well.

Our research into cities shows that a city’s position for nightlife in our America’s Best Cities rankings is the 10th most correlated factor with international tourism arrivals—higher even than the number of culinary experiences.

A city’s nightlife is more correlated with international tourism arrivals than even culinary experiences.

So clearly, nightlife contributes to both a city’s sense of global identity, to its local economy, and to its attractiveness for foreign visitors (or perhaps more foreign visitors could lead to demand for more nightlife experiences?).

Either way, that there’s a correlation between visitors and nightlife isn’t surprising; what’s unexpected is the correlation we found between nightlife and foreign direct investment. Based on an analysis of the number of jobs in foreign-owned enterprises in each of the  50 largest cities in the U.S. and each city’s ranking for nightlife in our America’s Best Cities report, we found that nightlife is more highly correlated than landmarks, culture and shopping.

Surprisingly, a city's nightlife is correlated with foreign direct investment.

As a result, several cities are “waking up” to not only the value, but importance the night-time economy plays in the prosperity of their city.

LONDON OWNS THE NIGHT

Cities like London have begun to measure the value of the night-time economy, and the figures are staggering. In 2016, a Night Time Commission was struck just as service was set to begin on the “Night Tube” subway service, and a Night Czar (or Night Mayor—more about that in a bit) went to work. London First and Ernst & Young found that in 2014, the night-time economy was worth up to almost $35 billion annually, around 8% of London’s gross domestic product, and directly supported one in eight jobs—a figure of 723,000 workers. The report suggested this could rise to 790,000 in less than 15 years.

“London’s culture and nightlife, from our theaters to our music venues, is iconic around the world,” said mayor Sadik Khan when the Night Tube opened. “With the night tube, more people will be able to experience London’s unique cultural scene, making a substantial and vital contribution to our city’s future economic prosperity, and sending out a signal that London is truly open.” He added, “It will unlock the full potential of London’s night-time economy, and will be a huge driver in creating jobs and supporting hundreds of businesses in our city.”

It turns out that he was right.

The Night Tube, which provides late-night services on parts of the undergrounds on Friday and Saturday nights, has been an unqualified success. A story in the Londonist in fall 2018 said that 8.7 million customers used the night tube in 2017/18 compared to 7.8 million in 2016/17. “In all, 17 million of us have used the service so far — comfortably surpassing an earlier prediction of 14 million. The service employs 4,000 people, and is predicted to add $2 billion to London’s economy over the next 10 years.”    

London's night-time economy is worth $35 billion annually.

LATE-NIGHT MOBILITY IS VITAL

Our own work confirms that the importance of night-time transportation can’t be overstated. If clubs, bars and restaurants are open late, how do people leave them in the wee hours? How do those who work in the establishments get home?

While working on a Tourism Master Plan for Vancouver a few years ago, we surveyed both tourism industry stakeholders and more than 2,000 local residents. When we asked them to rank the importance of various issues to both the development of tourism and quality of life in the city, we were surprised to see that residents and industry identified the same two issues as most important—late-night transportation and updating regulations surrounding how, where and when alcohol could be consumed.

In a city underserved by taxis and with no UBER, the night is not all right. Bright, beautiful Vancouver, which likes to call itself a “world-class city,” is also dogged by the moniker “No Funcouver.” Its combination of antiquated liquor laws, early closures and inadequate night-time transportation all contribute to that perception. Since then, measures have been taken to relax regulations and, last year, a few late-night bus routes were created—baby steps towards supporting and developing a night- time economy.

But last year, similar to the sequence of events that unfolded in Sydney, Vancouver City Council began to contemplate regulations that would prohibit entry into bars after 1:30 a.m. This galvanized both the industry and organizations such as the Downtown Vancouver Business Improvement Association. Meetings were held. Talks organized. Mirik Milan, the Night Mayor of Amsterdam, was brought in to come and speak to the city. So-called ‘night mayors’ or ‘night czars’ are tireless bridge-builders between owners of clubs, residents that live near nightlife venues and city officials.

Amsterdam pioneered the concept of the 'Night Mayor.'

RISE OF THE ‘NIGHT MAYOR’

Milan has since retired, but he has essentially become the worldwide prototype for the position: a genial night owl who demystifies the wee hours for 9- to-5ers and starts conversations that bring bar and club owners and residents closer. CityLab reports that “Milan is really the head of a small advisory NGO, “elected” by a combination of online votes from the public, attendees of a music festival, and a jury of experts. Equally funded by the city and night businesses, Milan and night mayors like him are self-defined “rebels in suits” who are nonetheless able to talk to officials on their own terms.”

In just the past two years, cities like Toronto and New York have created similar positions, recognizing that if a city isn’t vibrant—day and night—it may attract fewer visitors, talent and investment. Based on our research, we believe that the vibrancy, or what I like to call the “lovability” of a city, beats out logic by far. But don’t just take our word for it.

In a 2014 study by Endeavor, entrepreneurs answered the question “Why did you choose to found your company in the city that you did?” The Atlantic reported that “tax doesn’t make the top 50, ‘rent,’ ‘park,’ ‘restaurants,’ and ‘schools.’ In fact, it barely manages to edge out the word ‘girlfriend.’ Of the Top 10 most popular words, ‘lived,’ ‘live,’ and ‘living’ all make the cut. Talent takes the first slot.”

The report concluded: “The magic formula for attracting and retaining the best entrepreneurs is this: a great place to live plus a talented pool of potential employees, and excellent access to customers and suppliers.”

We’d bet that the great place to live includes a cool bar with a hot band, and a set that starts after 10 p.m.