How Big is New York Nightlife?

By Gamal Hennessy

There is a movement building to transform millions of nightlife patrons into a political force. As organizations like the Nightlife Preservation Community begin to gain momentum, it makes sense to look at what nightlife brings to the New York economy in hard numbers. When you look at the number of jobs, the number of patrons, the amounts the clubs spend and the amounts the patrons spend you begin to see how vital nightlife is to the financial health of the city.

Where the numbers come from
The New York Nightlife Association (NYNA) is an organization that represents the nightlife industry in New York. The NYNA commissioned a study in 1998 and again in 2004 called “The $9 Billion Dollar Impact of the Nightlife Industry on New York City”. Two weeks ago, Zagat released its 2009-2010 New York nightlife Guide with an updated analysis of the club industry. The numbers in this article are based on these two studies and my own calculations. The numbers coming out of the study have been verified, but since I can hardly add, my calculations are suspect at best.

Venues and Operators
According to Zagat, New York City currently has more than 1,300 nightlife venues, including 100 new venues added in the past year. This finding is supported by our own Trends Report that has continued to track new venues opening almost every week in spite of the economy. While there is no mention of how many venues were lost in 2008, the number of new venues is remarkable considering the economy and the stiff competition for drinking dollars.

Each venue needs several different people on hand to service and entertain customers on a nightly basis. The employees included management, security, bartenders, bar backs, dancers, waitresses, sound and light technicians and food service people such as cooks and chefs. It did not cover people who worked in the club, but were not direct employees of the venue, like musicians, DJ’s and promoters. According to the Impact Study, each bar has an average of 17 people on staff and each nightclub having approximately 38 people working there for an average of 27 operators per venue. That means that the total number of operators currently hovers around 35,000 people. The secondary group of natives who work in the club but do not work for the club is also considerable. Based on the study, nightlife generates 8,600 more local jobs as a direct result of its activities. This means that nightlife employs almost 44,000 people locally.

Spending by Operators

Wages: There are three major costs that operators pay for to keep their businesses running; wages, operational costs and taxes. Employees on the payroll of venues earn approximately $531,000,000 in wages and salaries every year. Freelance operators pull in more than $320,000,000 dollars per year. I can tell you from personal experience that the distribution of these funds varies wildly. If an unknown DJ spins at a club, she might get free drinks. If I DJ at a club, I might get $250 for a night. If a superstar DJ spins for a night, he could get several thousand dollars. While the distribution of these funds fluctuates there is still more than $850,000,000 in wages being generated by this industry, with a majority of those funds getting pumped back into the local economy.

Operational Costs: A bar or club has to purchase a significant amount of goods and services in order to offer its service to the public. While liquor and food are obvious examples, venues also have to purchase capital improvements to their spaces, furniture, cleaning and sanitation, electricity, climate control, accounting, legal advice, advertising, marketing, permits, music licensing fees and financial services. According to the Impact Study, nightlife spends more than $755,000 million dollars worth of goods and services in the city every year.

Taxes: Nightlife venues have to pay business taxes, sales and use taxes and in certain cases real estate taxes to stay in operation. The employees have to pay income taxes on the wages that they have earned (although I believe some payments are made on a cash basis to avoid taxation). The Impact Study estimates that nightlife pays the almost $104,000,000 million dollars a year in taxes to New York City and another $46,000,000 million dollars to New York State.

Part II of this study will be available tomorrow…

Have fun.
Gamal