In the first half of 2020, art sales fell. Galleries closed forever. But art fairs suffered the most. Art Basel canceled the third of its 2020 fairs last week, this time in Miami Beach. An economist Claire McAndrew doubts they’ll be able to recover in 2021.
How the art market is going through the coronavirus crisis
A survey of 795 galleries specializing in modernism and contemporary art showed that 91% of dealers are confident that sales will not improve in the second half of 2020. Moreover, only a third of them expect sales to increase in 2021.
Most collectors plan to start attending art events again in other cities and countries no earlier than the second half of 2021. In Australia, where the Melbourne Art Fair, originally scheduled for February, has been pushed back to 2022.
Only a few daredevils go against these trends in art. London’s 1:54 am African Contemporary Art Fair is still getting ready for October.
In the meantime, the decision on whether the FIAC will open in Paris next month has not yet been made (information is expected to appear in the coming days).
A report from Art Basel and UBS showed that even as scientists are trying to develop a vaccine for COVID-19 as soon as possible, dealers are going to cut their participation in fairs next year. On average, this figure will decline from four fairs in 2019 to three in 2021.
Galleries with a turnover of $ 10 million and above say they plan to limit themselves to four fairs instead of the usual seven. The main reasons include restrictions on international traffic and increased transport costs; some also talk about the environmental impact of flights. So, the dealer from London, Kate McGarry is going to take part only in fairs that can be reached by train.
In 2019, fairs were the main source of income for galleries, accounting for almost half (46%) of their sales. On the other hand, 29% of expenses were also associated with them, which is more spending on rent and salaries.
McAndrew says that dealers are increasingly looking for alternatives to fairs, preferring, for example, gallery weekends. She says art fairs will no longer be a trend in art. Dealers want a program, dinners, and events that usually accompany the fair, but there is no single trading floor.
Gallery weekends are the art trend 2020 as they allow you to organize all this while maintaining social distance.
There have been significant changes in online sales as well, although a quarter of those surveyed said they had not sold a single item online this year. Online sales grew from 10% in 2019 to 37% in the first half of 2020.
Most of the sales went through gallery sites and, albeit to a lesser extent, through third-party platforms, including the increasingly popular virtual showrooms that replaced fairs this year.
Unsurprisingly, millennial collectors, who make up about half of the art collectors surveyed, say that they are more comfortable buying expensive works on the web: 16% of them buy things that cost more than $ 1 million this way. Almost a third of collectors (32%) have bought at least one work through Instagram.
In light of recent events, online sales are one of the trends in art.
Art fairs also need to somehow survive, and in the second half of September, Art Basel is introducing a flat fee of $ 5,000 to participate in its virtual showroom. Art Basel director Marc Spiegler says the monetization of virtual showrooms has met with little resistance.
The new virtual incarnation of Art Basel, which opens on September 23 and dedicated exclusively to works created in 2020, will be more intimate. Only 100 galleries take part in it instead of 280.
And it will last only three and a half days. This is less an attempt to reproduce the online atmosphere of a fair and more a cross between a pop-up store, an auction, and the release of a capsule collection of clothes.
Despite the cancellation of all three fairs this year, Spiegler remains optimistic about Hong Kong’s Art Basel, scheduled for March 2021. The economic consequences of the pandemic are likely to be felt not only in 2021 but also later. Not surprisingly, the lockdown is also affecting art trends 2020.
. McAndrew notes that depending on the duration of the different phases of this crisis, on what support will be provided, and on how deep and protracted the recession will be, in 2020 we may see both unexpected stability and irreversible changes in the landscape of the familiar trends in art.
Climate change and globalization of the art market
An insurance agency Huntington T. Block has predicted some changes in the art market this year. This fall, three major art trends are going to influence the art market. They are globalization, climate change, and the rise in art values.
Just like insurance, art is a global business. However, as it internationalizes, art becomes vulnerable to more interruptions and uncertainty. According to the results of Christie’s annual exhibition, Asian customers spend more on non-Asian art and artifacts than Asian ones.
Despite an increased appetite for Western art in China, the trade war and political unrest took a toll on consumption. For example, an art gallery in New York City expanded to Beijing and Hong Kong but closed due to uncertainty. In the world of the United Kingdom, the second-largest art market in the world, Brexit has an impact on the art market.
Uncertainty will continue to affect the global art market this fall, affecting both appetites and prices. Failure to find solutions to these pervasive problems will negatively impact the trends in art.
After all, the art market, like any other financial market, does not thrive in the face of uncertainty. But there is a positive side of globalization. Art is thriving in the Persian Gulf, Saudi Arabia, and Russia – markets that helped stabilize prices during the last global financial crisis.
The importance of the Arab states in the market is enhanced by the recent expansion of art, such as the Louvre and the new Guggenheim locations in Abu Dhabi. However, in 2020, the hot Russian market experiences fluctuations in the oil market.
Collectors, galleries, and art institutions continue to tackle the effects of climate change. According to the World Meteorological Service, over 62 million people worldwide have been affected by extreme weather conditions in the past 2 years.
A spike in extreme weather events – from hurricanes and wildfires to freezing cold and drought – all affect how art is to be handled, transported, displayed, and stored.
There are different ways to influence the art market. In the event of catastrophic damage, insurers know what the risk is and what the cost is. Since 2005, insurance professionals have focused on the cumulative challenges or accumulation of risks following Hurricane Katrina and Rita to ensure there is sufficient reserve to meet policyholder claims.
The art world also continues to struggle with rising water levels. A report from the World Meteorological Organization also says that more than 35 million people were affected by floods in 2018. Coastal cities that serve as hubs for industry such as Miami, Venice, Amsterdam, and New York are of growing concern.
Talk about how best to protect works of art still continue this year, from moving objects to creating new systems to protect priceless works. The significant losses have come as a bit of a surprise to the insurance industry, which has never seen seasons with this intensity. Areas affected by wildfires become more susceptible to flooding as they recover.
This increased risk is a result of abrupt terrain changes and a decrease in the soil’s ability to absorb water. The Federal Emergency Management Agency says areas affected by wildfires are at increased risk of flash floods and mudflows for five years, even if they were not normally flood-prone in the past.
Forest fires continue to intensify in both magnitude and frequency. California was hit by major wildfires in 2016 and 2017. This is a serious problem for the art industry, as the fire makes the process of restoring damaged artwork very difficult and sometimes impossible.
Fire can completely absorb works of art, and damage from smoke and heat can cause serious problems. All art collectors, especially people from fire-prone areas, must invest in art insurance or they risk losing their art forever.