Many people talk about AI and its benefits in banking, retail, and healthcare. But what about the nightclub industry? COVID-19 did not kill the nightclub industry in NYC. Still, it drastically reshaped it, leading to the permanent closure of some high-profile venues while fueling the rise of smaller, more intimate, and agile nightlife options. The industry's evolution reflects a shift in consumer behavior and new business strategies adopted by owners, and AI could give nightclub promoters and owners an unfair competitive advantage.
Full disclaimer: I'm now 54 and haven't stepped into a New York nightclub for over 20 years; however, the product and service are the same: Go to nightclubs to socialize, de-stress, and have fun in a lively atmosphere, often involving dancing to music and a sense of escapism from daily life. Meet new people or romantic partners, and experience the euphoria associated with social bonding and music. And it was an enjoyable hobby and a cultural New York experience, allowing me and others to express and create memories.
If you have been to these places, you can relate:
New York nightclubs are closing due to a combination of rising operating costs like rent and insurance, reduced revenue from younger demographics drinking less, and economic pressures such as a lack of disposable income, making nightlife unaffordable for many. These factors contribute to a struggling late-night economy, leading to significant financial difficulties for venues.
This post is a bit of a tongue-in-cheek viewpoint on how the nightclub industry can reboot itself with AI. It's a lot more than waving glow sticks, having beautiful women holding a pink bottle of Cristal champagne.
In true consulting style, before I make some recommendations, let's talk about the basics.
🌐See Economist article
The secret economics of a VIP party: - There’s an invisible system behind every £100,000 bar tab and its currency is pretty women carefully recruited and managed to help create the atmosphere that prompts ultra-wealthy patrons to spend vast sums. High-end nightclubs rely on promoters who gather crowds of models and beautiful women to enhance the perceived exclusivity and appeal of the venue, which in turn enables massive markups on alcohol and encourages displays of status among affluent clients.
Behind every 💲six-figure bar tab is a coordinated system: club owners pay promoters to bring in beautiful women, not only for their looks but to create the right "ambience" for wealthy men to spend freely. This network of promoters, models, and club owners is international, catering to a global elite that seeks the same high-status experiences in exclusive venues from Miami to St. Tropez. The spontaneity of the parties is actually a highly choreographed illusion, where promoters orchestrate both the clientele and the vibe.
Promoters earn their keep by recruiting attractive women and attracting big spenders or "whales," receiving a cut of the bar bill and a nightly fee. Their success depends on charisma and broad social networks.
Young women/models are lured by perks like free entry, drinks, travel, and the opportunity to network and gain cultural capital, though they’re not directly paid. Their labor is subtly managed, and their presence catalyzes extravagant spending and status rituals among male patrons.
Male patrons, often financiers or tech professionals, relish the performance of status and, through their spending, engage in social contests facilitated by the presence of the women.
While promoters claim not to be pimps, their relationship to the women is managerial, involving subtle forms of control and incentive. The women often perceive themselves as gaining access and opportunity, but their mobility, autonomy, and comfort can be sharply limited. Intriguingly, both promoters and the women they manage aspire to enter the elite worlds they serve, yet remain, in many ways, outsiders.
Despite its glamorous veneer, the VIP club scene is a well-orchestrated business relying on the "labor" of beauty and the management of access and status.
AI can help the VIP party industry in several impactful ways, based on the dynamics I outline:
Reference Links
It’s not just a dancefloor’: the precipitous decline of UK nightclubs
How Much Does A Club Promoter Make: Revealing the Lucrative World of Nightclub Promoters