Written by: Michael Kill, NTIA, CEO
Full Nightlife Article Newsletter series.
The “Donut Effect” has been a topic of discussion in urban planning for some time now. It’s the idea that people and businesses are moving away from city centres to the suburbs, leaving a hollowed-out core. While this trend has been growing for years, it’s now having a significant impact on the night-time economy—the world of bars, restaurants, clubs, and venues that come alive after dark.
Historically, city centres were the epicentres of nightlife. Whether it was after-work drinks, late-night clubbing, or live gigs, urban hubs had it all. But in recent years, this dynamic has shifted. Hybrid and remote working mean fewer people are commuting into city centres, and this has had a knock-on effect on nightlife businesses. Without the same level of foot traffic, bars and clubs are struggling to fill up as they once did. Rising rents and business rates in city locations are also making it harder for venues to stay afloat.
However, it’s important to note that this shift isn’t necessarily killing city centres, but rather distributing the market over a broader area. People aren’t abandoning cities altogether; instead, they are rediscovering their local areas. Suburban bars, restaurants, and entertainment venues are seeing a surge in popularity. This trend is also driven by practical factors such as transport infrastructure and the rising cost of daily living. For many, the convenience and safety of local venues outweigh the need to travel into busy city centres.
Public transport, which has long been designed to funnel people into the city, is also a key consideration. If more people are opting to stay local, there’s a pressing need to rethink how suburbs are connected. We could see an expansion of public transport infrastructure that better supports suburban nightlife, making it easier for people to move between home and local venues, or even between local suburbs themselves.
City centres are also facing a challenge related to earlier nights and pre-midnight events, which are growing in popularity. As nightlife becomes more family-friendly and less late-night focused, the dynamics of after-dark activities change. However, we must also consider the reasons why some people are staying in. Economic factors—such as having less disposable income—are a big driver. When money is tight, people are less inclined to venture out late, especially when transport costs, safety concerns, and the guarantee of getting home become more pressing issues. These factors are contributing to the popularity of the “stay local” model.
This shift in how people experience nightlife is reshaping the broader night-time economy. The big, iconic venues in city centres, once bustling with activity, are now struggling to maintain their appeal. But the rise of neighbourhood bars, independent restaurants, and local music venues presents an exciting opportunity for suburban economies. Still, it does raise some new challenges. Suburban venues must now cope with the increased demand and the potential for noise complaints, local pushback, and regulatory pressures.
But there’s hope for city centres yet. Policymakers can create initiatives to bring people back to the urban core. Pop-up events, late-night cultural spaces, and improved street lighting can help reinvigorate nightlife in city centres, alongside thoughtful investment in suburban nightlife. At the same time, making transport systems more inclusive, both for city dwellers and suburban residents, will be crucial in encouraging movement and reducing barriers to late-night outings.
Ultimately, the Donut Effect isn’t necessarily a bad thing—it’s just a sign of change. The night-time economy is evolving, and people are embracing a more distributed approach to their leisure activities. The key challenge now is ensuring that this shift supports sustainable growth for both city-centre and suburban venues, creating a vibrant, diverse nightlife ecosystem where everyone, no matter where they live, can enjoy their evenings.
