The FINANCIAL — Nightclubs are failing to thrive in the current difficult financial climate in Georgia. Club owners claim that many people do not visit nightclubs anymore as drugs are no longer readily available there.
Managing big nightclubs has become an unprofitable business. For that reason many of them have turned in to lounge bars. Tbilisi will not become a ‘bright lights, dance city’.
Entrance to nightclubs costs 10-30 GEL in Tbilisi during weekdays and twice more on weekends. Clubs are popular mainly among students. The average clubber spends 50-100 GEL on a night out, while the average salary of youth in Georgia is 400 GEL.
“The synthetic drug ecstasy was a way of luring and attracting people to nightclubs. I do not condone people doing illegal drugs, but it is obvious that clients had the desire to take something energizing,” said Davit Kardava, Manager of Bamba Station. “People used to take ecstasy to be able to dance for four hours straight, be in a good mood and simply have fun. The ban on this drug caused clubs to lose clients,” Kardava believes.
“In the past there was high demand from people for nightclubs, but no clubs in Georgia that were popular enough to cater to the masses. Now the situation is reversed, lots of nightclubs are being closed down because they do not have enough clients. There are almost no nightclubs in Tbilisi any more, only lounge bars,” said Ana Chumburidze, Manager of Senate, a newly-opened club in Tbilisi.
“Club Triumph was on the verge of bankruptcy. We were about to close it down and stop the business because of a lack of clients,” said Zurab Karabaki, the Director of Triumph. The club now serves as an events place for corporate parties and weddings.
“Triumph is designed for 500 people. I will not open the club if only 100 or 200 people come here because the utility bills are the same in both cases. It is evident that small nightclubs have more profit than big ones. So we changed our strategy and now we work on orders. Weddings, banquets, corporate parties are the way forward for us,” he added.
“I guess the problem is low economic opportunity. The youth in Georgia cannot afford to pay for drink and for an active nightlife. The market is very small. Tbilisi simply cannot afford a nightlife nowadays,” said Karabaki.
It has become a tendency that almost every nightclub experiences crisis two years after its opening. Nightclubs are closed, up for sale or rent. “At first, an entity opens a club and brings his/her economically strong clients to the club. During the next year or so, the club works and sees profit. When the owner gets the profit, he/she is not interested in managing the club any longer and leaves it. I do not know what causes this trend, but in Georgia this has become a reality,” said Kardava.
Nightclub owners have developed a strategy for how to successfully manage their business. Most of them say that it is very important to update a club periodically. “Even a small change sees a result. Interior renovations, bringing in foreign DJs, offering exclusive drinks and events programmes are vital for nightlife in Georgia. In my opinion a club should be renovated at least once biennially,” said Ana Chumburidze.
There are some night clubs which do not complain of lack of clients. “Club Safe has been operating on the market for two years already and has not experienced any problems yet,” said Tiko Tsintsadze, the Manager. “We have updated our club. People like our new image. The club is small. People are therefore closer to each other. They feel comfortable here. Foreign DJs, well-planned events and professional bar managers are what has attracted our client base. We even added two extra days to the generic Friday and Saturday ‘clubbing days’,” she added.
Tariel Zivzivadze, Professional Business Trainer and Consultant, explained that social networking has reduced the number of people going to nightclubs. “People need entertainment, to be seen and to communicate. Nowadays that is all made possible by social networks so it is not necessary to go out somewhere for this anymore, for example to a nightclub. Five years ago social networks were not popular at all and this is one of the reasons why nightlife was more active back then,” said Zivzivadze.
“My advice for nightclub directors would be this: for successful management it is important for a nightclub to be different to the rest. A nightclub should be aimed at specific target groups and satisfy very concrete interests. And lastly, I would advise one to organise many different and original events. Such things are what bring people to nightclubs,” he added.
Some entrepreneurs have tried to use the popularity of social networks to make their restaurant businesses succeed. For example one on Kiacheli Street renamed itself Odnoklassniki, the popular Russian social networking website, another cafe has opened called Facebook. None of them have achieved great success however.
