Why five years after the pandemic, art fairs are still in recovery – The Art Newspaper

Writing in The New York Times last month, Charles Kenny, the author and senior fellow at the Center for Global Development, noted that we may still be in the “chaos phase” of a pandemic cycle. “Our global economy and politics are suffering their own form of long Covid,” he wrote.

Five years on from the first lockdowns, the art market is far from back to full health, and art fairs, once the powerhouses of the industry, are struggling to regain their footing. Faced with rising exhibiting and travel costs as well as dampened spending among collectors, dealers are taking bigger risks by doing fairs. At the same time, the way VIPs engage with art world events has changed significantly since the pandemic. A survey published in November of 1,400 Art Basel VIPs revealed that art fair attendance almost halved between 2019 and 2024, from eight to an estimated five last year.

In turn, the profitability of fairs themselves is being called into question. Last month, Eye of the Collector, a boutique art fair that was due to hold its fifth edition in London in June, was “put on pause” due to “changing collector demographics, market dynamics and rising costs”, according to its founder Nazy Vassegh.

London’s unique challenges

Thanks to the fallout from Brexit and the abolition of the “non-dom” tax regime, London faces its own challenges; in 2023 the Swiss events company MCH Group, which also runs the Art Basel fair franchise, cancelled the longstanding Masterpiece fair over escalating costs and a decline in the number of international exhibitors. But, as Michael Plummer, the founder of Tefaf New York and the art advisory firm Artvest, points out: “This is a global problem.”

“It’s been building for a couple of years, but the issues are really coming to a head,” he says. “Shipping costs, staffing costs, the costs of the fairs themselves have all gone up. Dealers are also in this post-Covid environment. The world has changed, and we are still trying to adjust. All of these things together have created this very fragile fair ecosystem.”

Other recent high-profile casualties include the debut edition of Photofairs in Hong Kong, which had been due to take place last month but was cancelled by its organiser Creo, citing “logistical constraints”. Elsewhere, the India Art Fair in New Delhi has walked back plans to open in Mumbai next year due to clashes with another existing fair in the city, Art Mumbai. In total, 31 art fairs ceased trading in 2024, according to the latest UBS/Art Basel Art Market Report.

Even the mega-fair franchises Frieze and Art Basel have been tested. Last October, it was announced that Frieze’s parent company, the Beverly Hills-based entertainment and sports conglomerate Endeavor, may sell the art fair and media brand. The possible sale is part of a deal with the San Francisco Bay Area investment firm Silver Lake to take Endeavor private; at the time of writing, that deal was expected to close on 24 March. The Frieze sale process is understood to still be ongoing irrespective of that deadline. Possible buyers include Ari Emanuel, the chief executive of Endeavor, who reportedly notified the company’s board in November that he intended to bid. Gulf states and their sovereign wealth funds have also been earmarked as possible candidates by commentators, though these remain rumours.

The potential sale comes after a period of expansion for Frieze, which launched new fairs in Los Angeles in 2019 and Seoul in 2022. The brand also acquired Expo Chicago and New York’s The Armory Show in 2023.

Los Angeles defies the odds

These events are still attracting a great deal of attention. Frieze Los Angeles, held in February six weeks after the devastating wildfires, saw 30,000 visitors from 85 countries over four days. Whether that footfall converted into sales is harder to say. There were a handful of million-dollar sales and scores under the $100,000 mark, not uncommon for the Frieze franchise, which specialises in less expensive contemporary art (Frieze Masters is reserved for historical art). Several galleries reported selling out their stands. In the run-up to the fair, Frieze pivoted its focus to more community-led projects in aid of Los Angeles’s art community. Some suggested the groundswell of support from US museums and others had averted what could have been a disaster for the local art market.

As for the fair’s own profit margins, at around 95 galleries, the economics of Frieze Los Angeles are known to be challenging. In terms of Frieze’s fairs in London and Seoul, the company continues to be profitable, though margins are prone to fluctuation. According to the latest accounts filed at Companies House (which do not include the fairs in New York and Los Angeles), the profits for Frieze Events dropped from £3.7m in 2022 to £1.7m in 2023, chiefly due to increased administrative costs. Turnover in 2023 was largely generated from exhibitors (£17.7m compared with £6.9m from sponsors) and in the UK (£16.1m compared with £8.8m in the rest of the world).

Even with up to nearly 300 galleries per show, Art Basel has not been without its problems. James Murdoch helped steady the ship during a difficult period when his private investment firm Lupa Systems injected SFr48m (€46m) into the fair’s parent company MCH Group in August 2020, becoming a board member and anchor shareholder (with 32.32% of shares) in December that year.

Things seem to be looking up. According to MCH’s latest financial report, after significant losses from 2019 to 2022, the company “returned to net profitability for the first time since 2016”, with a net profit of SFr 3m ($3.5m). The report notes that this financial result was supported by SFr 3.6m in “one-off items that were not directly related to operational business performance”.

All art fairs are grappling with a drop in the percentage of sales dealers make at their events: down from 46% of all annual sales in 2018 to 31% in 2024, according to Art Basel and UBS’s The Art Market report. Still, there are signs of growth in other ways. Fair numbers are slowly creeping back up to pre-pandemic levels (377 in 2024 versus 408 in 2019) and a fleet of smaller and boutique events, many of which claim to not be fairs, is emerging.

Among them is Basel Social Club (BSC), a non-profit association founded in the Swiss city in 2022 by the curator Yael Salomonowitz, the gallerist Robbie Fitzpatrick and the artist Hannah Weinberger, who describes the project as “a grassroots initiative [that is] more like a kunsthalle group show of around 500 works”. Some works are for sale and some are not, she adds.

Held in June at the same time as Art Basel, its founders stress they are very much not an art fair. “Certain components of what we do maybe echo an art fair, but it really is its own model,” Fitzpatrick says. “Of course, the art world is driven by the market as the primary means for artists to survive economically. Many different platforms—biennials, institutional shows, prizes are all opportunities for commercial transactions. But we were born out of a real need for something different; art fairs are particularly hostile environments for artists.” BSC is supported by various foundations and a few private patrons; exhibitors pay a “small fee”, which covers operating costs.

Basel’s social success

After three successful events—in an abandoned villa, a former mayonnaise factory and, last year, on 50 hectares of farmland on the outskirts of Basel—BSC returns to the city centre for its fourth edition. Details will be kept under wraps until a few weeks before the opening, but Weinberger says the event will be “the biggest so far” with 40,000 people expected to attend. In terms of politics, “it’s going to address the elephant in the room”, she adds.

With one eye on costs and another on the environment, dealers and collectors are also choosing to focus on local events. At the end of last month, a new fair covering a broad range of art, design and collectables opened in Scottsdale, Arizona, where the cost of exhibiting is a fraction of that in New York, says Michael Plummer, who has been advising on the fair. “Dealers can take a risk on this and not lose their shirts,” he says, noting that 101 exhibitors took part, “an indication that many dealers are needing to find new marketplaces because the tried and true are not performing as well as in the past”.

Plummer expects the new fair, Scotts­dale Ferrari Art Week (named after its main sponsor), will appeal to younger generations of collectors who are “focused more on luxury goods, sports memorabilia and collectables”, he says. Another of the fair’s sponsors, Heritage Auctions, is focused squarely on the collectables market.

One of the chronic issues with art fairs remains converting interested parties into buyers. The entrepreneur and art market expert Magnus Resch has calculated that the combined Art Basel, Frieze and Tefaf fairs together draw 650,000 visitors a year, but collectors who buy more than $100,000 worth of art a year numbers just 6,000.

As Plummer puts it, for art fairs to weather this storm, they will need to keep things fresh—reduce pre-selling, homogeneity and potentially costs. “There’s a whole rethink needed,” he says. “Are fairs getting the right people in the door? Are they getting enough people in the door? And, crucially, are they making enough money to keep their doors open?”