Editor's Note: Below is a complimentary research note written by world-renowned demographer Neil Howe who recently joined Hedgeye as Demography Sector Head.
The U.S. nightlife industry is suffering. Over 10,000 bars have shut down in the past decade—with closures reaching a peak of six per day in 2014. Even big joints are going down, including four of Atlantic City’s 12 casinos last year.
It’s not just a U.S. trend. Nightclubs in Britain fell over the last decade from 3,144 to 1,733—a 45 percent drop. In the Netherlands, the number of nightclubs and “discos” have meanwhile fallen by 38 percent.
“Kids these days just want to live in their f---ing own little worlds in their bedrooms watching Netflix and becoming obese.” –frustrated UK bartender cited in The Economist (2015)
WHY IT’S HAPPENING
Young adults typically provide the top-line growth for drinking places. But today’s young adults are drinking (and smoking) less. This was a trend first noticed when the oldest Millennials were in highschool back around 2000, and the trend is aging with them as they grow older.
When they do drink, moreover, Millennials are less likely to do so in anonymous settings with random strangers. Why?
(1) Millennials use social media and smart phone to choose exactly who they want to be with. You no longer have to be with everybody in order just to meet somebody.
(2) The demographic weight of the Boomers, as they age, is changing the social mood tone in a more sedate and conservative direction. When Boomers were young, the culture celebrated wild night life. Now it celebrates mindfulness and juice diets.
(3) Millennials—a.k.a. “Generation Yawn”--themselves show a wide-ranging aversion to personal risk-taking of every variety, including the edgy nightclub/bar lifestyle. Assertive Millennial women may be taking the lead here: They are devaluing male-dominated hedonism, and the men are mostly going along.
In the media, Boomers (and Xers) are embracing the dysfunctional “wild child” label, even as Millennials abandon it. There is a burgeoning category of movies and TV shows centered on “Baby Boomers behaving badly.” Millennials, meanwhile, are flocking to the “new nice” in entertainment, hosted by never-nasty hosts like Jimmy Fallon and Trevor Noah.
Sports brands are losing their bleeding edge. Nike e.g. is less into black and winning at all costs—and instead doubling down on neon and pastel and “athleisure.” Millennials who do color runs and tough mudder are not trying to beat each other. Activities associated with competition and danger (like snowboarding) are on the decline—along with bar games like pool and darts.
Las Vegas casinos, seeing that Millennials are not as attracted to drinking and gambling as older generations, are ramping up on sociable skill games with leaderboards. They’re also investing more in spas, restaurants, and even underground wine caves to give Millennials more spectacular and “shareable” experiences.