World

The business of marriage

A lavish royal wedding could boost the British economy—and in an age of austerity, outrage taxpayers

The business of marriage

Jeff Moore/Keystone Press, Reuters

No sooner had the royal engagement been announced on Tuesday than Steven Jackson’s phone in Nottinghamshire began to ring. When it comes to memorabilia about the royals, Jackson, the 70-year-old secretary of the Commemorative Collectors Society, knows more than perhaps anybody about the assorted cups, plates, vases, scarves, jigsaw puzzles and souvenir books that manufacturers invariably crank out whenever royals get hitched. Now those companies are eager to know what Charles and Diana memorabilia sold best before, and which William and Kate designs will be most successful now. At stake: a potential windfall worth billions of dollars. Royal weddings may be public celebrations, but there’s no denying they are also economies unto themselves.

In 1981, Charles and Diana’s marriage gave Britain a badly needed economic lift amid a punishing recession. It generated vast sums in souvenir sales and hotel bills, and proved a ratings bonanza. Now many industries appear to be counting on a repeat performance, with hopes that next year’s big event will provide yet another boost for an ailing economy. But while anticipation is building, the fact is the royal wedding will happen in a very different environment. The royals are not the draw they once were, and with Britain reeling from austerity measures, resentment against a lavish royal party is a real risk. Nevertheless, that doesn’t mean there isn’t money to be made.

That was clearly evident with the wedding of Charles and Di, says Jackson. By his count, more than $1.9 billion of collectibles hit the market around the time of the wedding. In today’s economy, that sum would be worth $4.5 billion, which, as Jackson points out, “is an awful lot of mugs and plates.” It’s far too soon to say whether the market for William and Kate will match Charles and Di. A lot will depend on the type of wedding they have, whether it’s a very public affair, or a more private event. The collectibles sector is also considerably smaller than it was in the early 1980s. But the fact is, even in 1981 it wasn’t until two weeks before the wedding day that demand for Charles and Di memorabilia began to spike. Jackson expects the same thing to happen in the lead-up to the 2011 wedding.

But a royal wedding is about a lot more than just souvenirs. The royal family is a major year-round draw for the country’s tourism industry. The British Tourist Authority estimates that all things royal help generate more than $800 million annually, ranging from visits to the Tower of London (2.4 million visitors last year) to St. Paul’s Cathedral (1.8 million), where Charles and Diana’s marriage ceremony took place.

If history is any guide, next year’s wedding promises to be a particular boon for local restaurants and hoteliers—especially those lucky enough to be located anywhere near the venue. And, if a large public wedding is in the offing, expect to see an army of entrepreneurs selling everything from viewing spots to royal sightseeing tours. For Charles and Diana, one woman charged US$125 for access to a building along the procession route and a “colour TV and picnic lunch,” while a New York tour operator was selling a US$5,000 package that included accomodation in a bevy of stately homes and limousine service to take in such royal pastimes as opera, polo and horse racing.

Paul Eastham, a spokesperson for Visit Britain, said tourism officials are hoping next year’s nuptials will provide a similar economic shot in the arm. “We can’t say for sure how many tourists will come because of the wedding,” he says. “We got 30 million overseas tourists last year, but we expect an increase in a royal wedding year.” More important, he adds, is the impact of the wedding on the run-up to the 2012 Olympic Games in London, which is expected to generate $3.4 billion in extra business by 2014. “It’s the perfect prelude to the Olympics because the worldwide TV audience will be enormous, acting as a superb advertisement for the country.”

Another obvious beneficiary of Prince William’s decision to pop the question is the beleaguered media industry. That includes everything from the tabloids and gossip websites that track the royals’ every step (and misstep) to the TV networks that will be jockeying for the rights to broadcast the event live. “Any big news development—particularly a feel-good development like a royal wedding—is going to be good news for the media,” says Tim Westcott, an analyst at British consulting firm Screen Digest. But he cautions it will likely take more than a single, royal spectacle to offset a host of negative long-term trends in the industry, including fragmented TV audiences and slumping newspaper sales.

There are also questions about whether a royal wedding in 2011 will have the same cultural—and therefore economic—impact it did 30 years ago. Robert Thompson, a professor of television and pop culture at Syracuse University in New York, says that even though the U.S. does not have a Commonwealth connection, the country still went “completely nuts” for the wedding of Charles and Diana. But Thompson doesn’t believe this wedding will have the same impact. For one thing, Charles and Diana’s wedding occurred when cable TV reached fewer than 25 per cent of households. Most people only had five or six channels to choose from, and all the networks were covering the wedding. “It became one of the last events that saw everyone tune in at the same time,” he says. At the same time, the coverage emphasized the Cinderella quality of the wedding. But that storyline went bad quickly. “I’m not sure in 2010 whether a story like a royal wedding is going to capture an audience a full generation later, an audience that has become more cynical about these types of things,” he says.

There’s another factor at play. Coming just one month after the government ordered a massive crackdown on public spending, the engagement has hit a raw nerve for many. “Just what we need in this age of austerity,” one Guardian reporter tweeted after the announcement. “A multi-million-pound royal wedding.” Republic, a campaign whose goal it is to remove Britain’s monarchy, put out a statement calling on the family to foot the bill itself. “It is not for the taxpayer to pay for any part of this event, the Windsors must cough up,” the statement read.

The two families coming together certainly have the wherewithal to finance the wedding themselves. A recent estimate by Forbes magazine pegged the net worth of the royal family at a minimum of $540 million—not including the royal art collection and crown jewels. Nor are the Middletons hard up for money. While both her parents at one time worked for British Airways, where they met, Kate’s mother Carole launched Party Pieces, a party supply retailer. It’s not a hugely lucrative venture, but with annual revenues in the range of $975,000 it was enough to provide Kate with a comfortable upper-middle-class upbringing.

The Queen is keenly aware of the hardships that have befallen her subjects. This year’s traditional royal Christmas party has been cancelled. Interestingly, the calls for the royal family to share in the austerity could in fact aid the family in shielding their new addition from the limelight by opting for a more downscale ceremony.

Whatever the case, businesses are keen to capitalize on the wedding. After all, mega-mergers like this only come around once every 30 years.