COVID-19 & the Luxury Collectible Art Market
The available evidence and facts show that Covid-19 had not affected the prices of high-end luxury art collectibles until early March. However, it has started to affect the prices of high-end luxury art collectibles negatively. More information on the topic has been presented below, along with an outline of the research strategy.
Market in February and Early March
- According to Artnet News, the notable art events and auctions around the world were conducted as planned in February and early March. The sales results at art shows, such as Frieze LA, the ADAA Art Show, and Felix, were found to be very good.
- Many six-figure and seven-figure art sales were completed at the Armory Show. Pagavella was able to sell about $300 million worth artwork (including luxury art) from Donald Marron's art collection worth $450 million.
- TEFAF Maastricht's preview day saw a 27% decline in attendance this year when compared to the attendance in 2019. However, dealers confirmed that the art sales in the event exceeded $5 million.
- Phillip's New Now auction was able to increase its sales by 52% in 2020 when compared to the sales in 2019. These facts show that the prices of high-end luxury art collectibles were not affected by Covid-19 in February and early March, as the events went on as planned.
Market After Early March
- According to Artnet News, the main challenge for the global art market, including high-end luxury art collectibles, has just begun. Many art events and auctions that were set to begin "in late March or April have either been postponed, relocated, or shut down over public health concerns."
- Due to the escalation of Covid-19, Sotheby's spring auction art sales in Hong Kong were recently either postponed or moved to New York. According to Art News, the sales will be held at the firm's headquarters in Manhattan from April 16.
- Sotheby's sales in 2019 from over 400 auctions amounted to $4.8 billion. The sales in Asia amounted to $939 million.
- Sotheby's has experienced huge success in Asia, including China, in the past few years. Therefore, the business might be heavily affected due to the escalation of the virus.
- A luxury world event called Art Basel Hong Kong was canceled recently. According to The Fashion Law, "Art Basel Hong Kong featured 242 galleries from 35 countries and was attended by 88,000 visitors over five days" in 2019.
- Other large auction houses, such as Bonham's and Christie's, have also postponed their sales due to the outbreak of Covid-19. Similarly, notable art fairs and exhibitions, such as Jingart Beijing, Miaart Milan, Art Paris, Art Berlin, and Art Dubai, have also been postponed.
Online Art Sales
- Art Basel Hong Kong has created online viewing rooms where the visitors can view and purchase art online. The viewing rooms will be launched officially on March 20, and it will be live for five days.
- These creative initiatives have been boosted due to the social distancing rules and travel bans caused by the Covid-19 outbreak. Art Basel believes that online auctions and fairs will be a "potential complement" to physical fairs.
- According to Quartz, the galleries that have a global presence, such as David Zwirner and Gagosian, have shown that the digital art selling process can be very effective. However, enough results have not been obtained from online fairs and auctions to prove their effectiveness against physical fairs and auctions.
- The market size of the global art market declined by 5% to $64.1 billion in 2019. The decline was caused due to geopolitical tensions and other economic and trade-related issues. Experts believe that the impact of Covid-19 will further decrease the value of the market in the upcoming months. Different evidence and facts show that the prices of high-end luxury art collectibles were not affected by Covid-19 in February and early March, as the events went on as planned. However, as of late March, the virus outbreak has begun affecting the high-end luxury art collectibles market.
- Many art auctions and fairs, including Sotheby's auction and Art Basel Hong Kong, have been postponed or canceled. The creative initiatives, such as online art rooms, have not proved to be effective yet. Therefore, it can not be said that these initiatives will fully make up for the canceled and postponed shows. Due to the cancellation and postponing of different art shows and auctions, it can also be assumed that the high-end luxury art collectible market is going to face a decline.
- According to an article on Medium, the price of an art piece depends on different factors, such as popularity, venue, and the artist's development. The art pieces at large shows and auctions tend to have higher prices. In other words, the art pieces that are shown at shows and auctions, such as Sotheby's and Art Basel, usually have increased prices. Since the large shows and auctions are being canceled, it can be assumed that the prices of the art pieces might decline in the upcoming days. Therefore, it can be concluded that Covid-19 had not affected the prices of high-end luxury art collectibles until early March, but has started to affect the prices of the collectibles negatively.
Even after looking into multiple news reports and industry-related articles, no information showing the effect of Covid-19 on the prices of high-end luxury art collectibles could be found. We were only able to find information on the global art market. Thereafter, we decided to look into the high-end luxury art collectible market and find the market report for 2019 and 2020. Our idea was to compare the market sizes and art prices in the two years in order to see if any sudden price change occurred recently due to the outbreak of Covid-19. However, we did not find any report on the targeted market. We were able to find a global report that provided information on the art market. Therefore, our attempt at triangulation proved to be futile. The information could be unavailable because the effect of Covid-19 on the high-end luxury art collectibles market is a very new topic and is yet to be studied.
We then looked into the global art market and focused on the notable and large fairs and auctions, such as Sotheby's and Art Basel. These events are popular for selling high-end luxury art collectibles. We then looked into multiple articles and reports that showed the effect of Covid-19 on these shows. We corroborated the information across multiple sources. Thereafter, we looked into an article on medium that tied the art prices and events together. In this way, we were able to prove that Covid-19 had not affected the prices of high-end luxury art collectibles until early March, but has started to affect the prices of the collectibles negatively. The assumptions that were made for the triangulation have been explained in the 'Summary' section.