ARTBASEL 2020: Covid-19's impact on art galleries
There is a post-confinement world, but not a post-coronavirus yet.
It's a world in which Covid-19 changed the way of understanding the world of art forever: exhibitions, fairs and art galleries were forced to close their doors and rethink their future in the short and long term.
Today, we review ARTBASEL's The ArtMarket Report 2020 on the impact of coronavirus on art galleries. We also analyze the direction that this specialized sector is taking to face such a complex and transformative moment as the one we are currently experiencing.
The media about art galleries in 2020
Some digital media, such as Europapress, La Ser or El Cultural, among others, echoed during the month of March 2020 a devastating fact for Spanish art galleries:
It turns out that 87.5% of galleries registered losses during the Madrid fair season in February this year. And we are talking about fairs as huge as ARCO, Art Madrid or Hybrid. Only 12.5% of galleries managed to maintain the same profit margin as previous editions when it comes to selling artworks, which puts an average loss for the guild of 51.36%, a staggering number. Translated, the deficit is €25,705.63.
This means that emerging artists and galleries, but also established ones, are trying to break through a crisis of great magnitude worldwide. The future of contemporary art is uncertain at the moment although this does not mean that practical solutions are being interrupted since, as we will see later, the sector is quite active in formulating solutions.
ARTBASEL and UBS Global: The ArtMarket Report 2020
ARTBASEL and UBS Global conducted a mid-year survey on “The impact of Covid-19 on the gallery industry” in The ArtMarket Report 2020. Led by the prestigious Dr. Clare McAndrew, cultural economist and founder of Arts Economics, provided a comprehensive analysis of the current state of galleries in the art market.
The Art Market Report 2020 consists of a study as a macro-report of the current global art market, which annually studies the sale of works offline and online, the latest market trends and the establishment of statistics at an international level.
It is a completely independent and objective study, as referred by ARTBASEL, in which different segments of the art market are observed (fairs, galleries, auction houses, changes in global wealth patterns, etc.) and their economic impact.
Clare McAndrew, studying the first few months of 2020, produced a series of results based on a survey of heritage art collectors.
As far as collectors are concerned, the analysis particularly affects how Covid-19 has changed the way they interact with galleries, focusing on the most important art markets in the world: US, UK and China.
Key data from The ArtMarket Report 2020
The report begins with a very revealing clarification of the current situation: “The art market has often been resilient to events in the economic and political environment (...) however, the unpredictable world created in the first six months of 2020 presented the market and to art galleries in particular some of their biggest challenges to date.”
With this prelude, the information accompanied by graphics that ARTBASEL makes available does nothing more than corroborate what deep down is a reality that we have intuited: many art galleries had to adjust their staff, permanently dismissing their staff in response desperate to the growing crisis of Covid-19. A third of the surveyed galleries reduced their staff in the first third of 2020. Galleries earning between $250,000 and $500,000 annually with an average of five employees reported the highest number of reductions, reaching 38%.
Comparing the first six months of 2020 with those of 2019, art galleries report that their sales dropped an average of 36%, with a slight drop of 43%.
And as we indicated in the previous paragraph, smaller galleries, which earn about $500K a year, are the ones that reported the biggest drop in sales.
With regard to online sales, if the participation of galleries increased in 2019 by 10%, in the first quarter of 2020 it increased by 37%. In line with this, the galleries with the highest turnover, those with annual turnover in excess of 10 million dollars, were the ones with the highest growth.
In other words, big galleries are surviving better than small ones.
The cancellation of art fairs and their impact on galleries
We know that the connection between galleries and art fairs is close since that is how they feed to survive in the market.
The cancellation of art fairs in 2020 meant, again, a heavy blow to gallery sales: in the first half of 2020 they dropped to 16% against the 46% they reached on the same dates in 2019. With this climate, 91% of galleries predicted that art fair sales would not improve in the second half of 2020. Only a third believe it will improve in 2021.
Some positive data from collectors
Nonetheless, the report also clarified that collectors maintained their positivism when it came to investing in art: 92% remained active in the art market during the first half of 2020.
Of the total number of respondents, ARTBASEL reports that 75% bought works of art through contact with galleries in 2020, with 40% concentrated in galleries where they had previously purchased, somehow ensuring a sense of security.
Only 14% of collectors have been actively looking for new galleries for sale, but the previous percentages, compared to the sum, are not to be overlooked.
Looking ahead, most galleries expect sales to continue to decline; only 21% of ARTBASEL respondents believe that sales will pick up in the second half of the year.
With the continued restrictions on travel and events due to the confinement states in their different phases, 82% of collectors were predisposed in the first half of 2020 to continue buying art, participating in fairs, exhibitions and events during the next 12 months. And that's not all: around 57% expect to attend these venues, both locally and abroad.
The future of art galleries
Without a doubt, the future of art galleries is to maintain the trust of collectors. But also for offering new virtual experiences and focusing on the possibilities of the online world:
That's how Hauser & Wright opened their first virtual reality exhibition, slated to open in 2021, or how virtual art galleries like Singulart, Galeriabat, Kreislerart or Bygart have proliferated, among many others.
Hope is in 2021, but also here, on the sacred Internet.