Lights out Down Under: an analysis of Sydney’s nighttime economy

20 May 2019 9 min. read
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A report by Deloitte Access Economics, titled ‘Imagine Sydney: Play’ has analysed the potential of Sydney’s nighttime economy (NTE) and come up with striking numbers. The underdevelopment of nightlife could be costing the city $16 billion per year. Still, and perhaps obviously, Sydney’s nighttime economy is the strongest and most valuable in Australia – as it is the largest city in both the state of New South Wales and the country – bringing in $27.2 billion annually. 

That number, however, is only 3.8% of the nation’s economy. Compare that with the UK, for example, where the nation’s evening economy touches the 6% number, and it’s clear there is work to be done. “If the nighttime economy in Australia was supported and nurtured so that it matched the UK, the estimated value of the nighttime economy in Greater Sydney could be $43.3 billion,” the report by Deloitte Access Economics states. “[And] only 23% of spending in Sydney happens after 6.00pm, compared with 36% in Berlin, Germany.”

The study also found that Sydney’s night spending mainly occurs in “non-communal” categories such as supermarkets and food stores. When it comes to spending at “communal” establishments like restaurants, bars, retail, and the arts, the city falls behind.Estimated value of the potential NTE in Greater Sydney

What is the nighttime economy?

“The concept of a nighttime economy relates to the activities that a population undertakes after work and school, occurring between 6.00pm and 6.00am and predominantly consisting of consuming food and alcohol, and experiencing entertainment,” the authors state. It must appeal to an as broad a demographic as possible – to people of all genders, races, ages, and sexualities.

A valuable evening economy requires the cooperation of government and businesses, this includes infrastructure for public transportation, which is already in the works with a continuation of the extension of the Sydney Metro. The second stage of this project will extend into the city’s central business district (CBD), and see the construction of 31 metro stations along 66 kilometres across the city. The project is focused on reducing congestion, and improving the sustainability, connectivity and efficiency of the city’s transportation network. It will also greatly aid in improving the Sydney’s nighttime economy. 

A successful nighttime economy must be regulated, create jobs, and drive the economic development of cities. It’s easy to get caught up in the day-to-day of business and governmental operations – but it’s of great importance to remember the night-to-operations, which is looser, wilder, and lucrative, highlight the researchers. 

Drink culture, not alcohol

The controversial – some might say “infamous” – lockout laws, introduced in 2014 to curb alcohol-related violence within Sydney, caused businesses to close and greatly reduced foot traffic on streets in the central district area. The laws required bars and clubs to establish 1:30am lockouts — those who arrived after that time were refused entry — and a 3am last call in the area. 

A lack of booze might present an issue. But “it’s reductive to think of Sydney’s nighttime economy as simply pubs and clubs, or the lack of them,” the report states. “A vibrant evening scene creates a range of opportunities for providers and users; from 24-hour gyms to supermarkets to late night art galleries, to extended shopping and transport choices. The nighttime economy is also vital for a vibrant arts and culture sector.”

Simply put, nighttime economy means getting people out at night. No matter where they are, if they are having a good time, they’re spending money. And when they’re spending money, that’s good news for the economy. To further push things along, the Sydney Culture Network was established to make the city a leader in valuing culture, the evening economy among it. They will create strategies that connect Sydney’s cultural offerings, grow audience participation, and courage greater engagement across the cultural life of the city. 

“We can’t have a vibrant nighttime economy, for example, without things that make people want to connect, communicate and socialise. Museums that are open, small creative endeavours, pop-ups, music venues or artisans making and selling stuff. They are the things that people actually care about, that make them think ‘this is a cool place to live and work,” Ross Harley, dean of faculty of art and design and the University of New South Wales chair of arts and culture, and chair of Sydney Culture Network, said. 

Value and potential (and lots of it)

Money, money, money – through food, through entertainment, through drinks. A successful nighttime economy provides all of this to consumers, tourists and residents alike. “In 2016-17, Greater Sydney’s nighttime economy had an estimated value of $27.2 billion and employed almost 234,000 people,” the report finds. The food sector provided the most financial and employment value, contributing $15.7 billion and employing approximately 150,000 people. This was followed by the entertainment sector, which contributed $7.1 billion and created more than 49,000 jobs. The drink sector contributed $4.4 billion and employed more than 32,000 people. Estimated value of the NTE in Greater Sydney in 2016-17

That’s just the financial side of things. A “bustling” nighttime economy greatly helps its city by increasing business potential, creating a platform for artistic creation, sustaining visitor growth and cultural tourism, creating economic opportunity, creating jobs, and building community relationships. This goes for cities all around the world, many of which are reaping the benefits of a successfully leveraged evening environment. 

“Between 2010 and 2014, San Francisco added 12,000 jobs in nightlife businesses, a 25% increase to more than 60,000 people,” the study finds. “The city of Rosario in Argentina started a night picnic in 2017. Over 50,000 people attended the first event and it is now run throughout the year in different parks. Amsterdam’s nighttime economy was one of the main attractions for the 5.2 million tourists that visited the city in 2014.”

A fluorescent future

Vivid Sydney is an annual, month-long arts and lights festival, held throughout the city, highlighting iconic structures and landmarks including the Sydney Opera House and Harbour Bridge. Similar events are held each year in Lyon, France, with its Festival of Lights, and Amsterdam, in the Netherlands, with the Amsterdam Light Festival.

Vivid Sydney attracted 2.33 million people from around the world in 2017, contributing $143 million to New South Wales’ economy. Events such as Vivid Sydney can do wonders for the state of a nighttime economy. “It’s critical to consider all aspects of the nighttime economy, including safety and security. But as [Sydney] moves towards a true 24-hour city, it’s equally important to think beyond this, in a way that is innovative and strategic. [Sydney has] a lot to gain by expanding a public and private sector-driven nighttime economy,” the report states.

It’s also important to consider that Sydney is more that its central district, and as the city continues to grow west and south, “creating vibrant 24-hour economies will be the priority of many areas of Sydney.” 

To make this happen, Sydney established the Commission for the Night Time Economy in Greater Sydney. The commission introduced 22 recommendations that have the potential to push the nighttime economy to its limits, opening itself to new and underused revenue streams.

“Moving the discussion away from regulating a drinking culture, towards consideration of how we can use the nighttime economy to create a strong social environment and urban culture will be crucial,” the commission said. “There is definitely a major role for state and local government to play in regulating and developing policy that will stimulate and support a vibrant nighttime city. Planning and licensing that encourages initiatives like late night gallery and museum hours, live music or comedy and smaller bars with a different culture to one solely focused on drinking is important.”

Deloitte Access Economics is an arm of Big Four firm Deloitte, which “offers a full suite of macroeconomic and microeconomic services, including economic and financial forecasting and modelling, policy and program evaluation, and regulatory economics,” according to the firm’s website.