Art Market

Why Some Art Fairs Foot the Bill for Wealthy Collectors to Attend

Anna Louie Sussman
Oct 31, 2018 9:19PM

Galerie Jérôme Poggi’s booth at ARCOmadrid, 2018. Courtesy of IFEMA-Feria de Madrid.

Major art fairs such as Art Basel or Frieze attract international collectors with the promise of blue-chip artworks from a global network of dealers. But what if you’re a local art fair, with promising but under-the-radar artists and galleries?

One solution, smaller fairs have found, is to import collectors from overseas: Select a few dozen VIPs; offer them airfare, a hotel room, and an exclusive program of extracurricular activities; and hope the hospitality loosens their purse strings while they’re in town.

The strategy may seem counterintuitive. Art collectors, by and large, are loaded. Why should some of the wealthiest people in the world get free room and board? A look at Spain’s art market provides a good example.

Although Spain’s art market accounted for under 1% of global sales in 2016, according to a report by art economist Clare McAndrew, the country has dozens of vibrant galleries and an emerging cohort of talented artists, such as the Bilbao-based June Crespo and Sergio Prego, who will represent Spain at next year’s Venice Biennale. Of the country’s €385 million ($422 million) in sales in 2016, 80% were in the dealer market, with auctions accounting for the rest.

Given the limits of Spanish collectors’ purchasing power, Spanish fairs cannot survive on local largesse alone, said Eva Ruiz, founder and CEO of the Madrid-based firm Arternativ, a contemporary art consultancy that, among other services, creates VIP outreach programs and marketing materials for fairs.

A former gallerist who trained in journalism and marketing, Ruiz has traveled extensively to art fairs over the past decade. She noticed over and over that while the smaller fairs and cities had more interesting artists than the larger fairs, they lacked the local infrastructure and internal capacity to identify and attract international collectors.

“All the little art fairs needed help in order to bring more people into those local art scenes,” Ruiz said.

Spain’s two biggest fairs, ARCO Madrid and Estampa, are both owned by the nonprofit consortium Ifema, which operates Madrid’s convention center and includes the city’s regional government and city council. For those fairs, an investment in bringing wealthy collectors also has a multiplier effect on the city’s economy, as they’ll tend to spend more than tourists on a budget who stay at a hostel and buy the occasional beer.

Tony Karman, director of Expo Chicago, said his fair also offers a VIP program in conjunction with top-tier sponsors, such as the bank Northern Trust. They will mostly cover hotels (and airfare in some cases) for both top-tier and new collectors, the latter of whom “have a strong interest in contemporary and modern art, and want a little bit of guidance and access to both knowledge and experience,” Karman said, which the fair offers through curator-guided tours of museums and visits to collectors’ homes, for insights into how Chicago’s establishment collects.

Karman called ARCO Madrid’s program “brilliant,” but noted that European fairs were more likely to have access to public funds, while U.S.-based fairs, which are private, for-profit concerns, tend not to have financial backing from municipal budgets. That said, Expo Chicago and other U.S. fairs, such as the Dallas Art Fair, do get logistical support from city governments, and local political grandees are commonly spotted at the fairs’ opening nights.

Ruiz started working with Estampa three years ago, developing a VIP program that would entice collectors to prioritize a lesser-known fair. She said she travels twice a month and maintains a list of 8,000 to 9,000 collectors, but uses her knowledge of their shopping habits and art tastes to curate a guest list for the fairs she works with—which include Art Athina, Art Lima, ARCO Madrid, and ARCO Lisboa—and other events, such as Gallery Weekend Brussels and Open Studio Marrakech.

One French collector who did not want to be named said Estampa’s VIP itinerary—which, in addition to free lunch and dinner, included visits to private art collections—had convinced her. In particular, she was enticed by the private tour of the Palacio de Liria, the Duke of Alba’s residence in central Madrid, which is home to works by Francisco de Goya, Titian, and other European masters. Members of the public hoping to visit the palace face a two-year waitlist.

She said she normally turns down offers of free trips to art fairs, because she “likes to be independent.” But her decision to finally accept a trip highlights the importance of a seductive VIP itinerary.

“When I saw that we could get in, I said, ‘I’m coming,’” she recalled.

The trip has given her a new investment in the Spanish art scene; in previous years, she had skipped Spanish art fairs, believing the local artists they showcase to be “weak.”

“But it has changed,” she said. “I had heard it had changed, but I wanted to see it with my own eyes.”

She spent three hours on Estampa’s opening day wandering the fair’s halls. She didn’t buy anything that day, though she eagerly flipped through photos on her phone of works that had intrigued her, pointing out the pervasive influence of German artist Imi Knoebel.

The dealers at Estampa are grateful for foreign collectors, and they understand why fairs invest in this type of outreach, even if it ultimately adds to the cost of their booths. Ruiz and her team follow up with collectors and dealers to see how sales progressed. Roughly 80% of last year’s invited guests at Estampa bought a work of art, and this year, around 70% of the 55 invited VIP attendees bought something, she said, mostly works by emerging or established Spanish artists.

“At the end, [the collectors] leave more money than you invest” in bringing them, said Jacobo Fitz-James Stuart, director of Espacio Valverde, a Madrid gallery that evolved out of a project space, and which sold a work this year to one of the collectors invited by Ruiz.

“There’s a hardcore group of Spanish collectors that always come to Estampa,” Fitz-James Stuart said. But, he added, “what is important is that you have international followers of your artists. If an artist focuses only on one country, at a certain age, he will not be able to survive.”

ARCO Madrid, the larger and more international of Spain’s two big fairs, started inviting collectors in the 1990s, with initial groups of around 30 to 40 contemporary art collectors. Current fair director Carlos Urroz said the initial trips also served as “a cultural visit to the emerging post-Franco Spain,” showcasing the cultural flourishing that accompanied the country’s transition to democracy.

“The result was very positive as visitors…adored Spain and made important purchases,” said Urroz.

Urroz said that during ARCO Madrid’s most recent edition, held in February, more than 400 people participated in different invited programs, including established collectors, young collectors, and advisors. Two people familiar with the VIP collector program said the fair organizers spend upwards of $1 million on it; Urroz described guest programs and other international marketing as “the biggest part of our promotion budget.”

Of the invited collectors who came to Madrid for ARCO this year, 65% came from other parts of Europe, 16% were from the U.S. and Canada, 14% hailed from Latin America, and 5% came from other parts of the world, Urroz said, reflecting the international origins of the galleries showing at ARCO. Participating galleries can suggest collectors they would like to invite, and Urroz and his team research the names and put together a final list. ARCO does not track purchases made by collectors.

At the Estampa VIP lounge earlier this month, where invited guests were cloistered away from the fair halls, Guido de Bruyn and his wife, Viviane Blondeel, fortified themselves with chicken skewers and miniature pastries. De Bruyn, a Belgian labor lawyer, said he typically buys at every fair he attends; he and Blondeel had just arrived from FIAC in Paris.

He had initially visited ARCO Madrid in the 1990s, when it first began rolling out its VIP program. At that time, he recalls, VIPs were invited to a dinner hosted by Queen Sofía of Spain.

“We didn’t know Estampa, we were very curious,” de Bruyn said. While he and Blondeel enjoy traveling to Madrid, he wouldn’t have come without Ruiz’s urging and the itinerary she had put together. He ultimately bought a work by Toshiro Yamaguchi from Madrid’s Lucia Mendoza gallery.

At the booth of Galería Moisés Pérez de Albéniz, gallery director Jordi Rigol Tomás was showing a painting by Santiago Giralda, a young Spanish artist whose work was purchased by a visiting collector at the last edition of Estampa. He doesn’t begrudge the expense or irony of paying higher booth costs in order to subsidize the travel of already-wealthy collectors—especially if it results in a sale, as it did this year when one of the collectors in Ruiz’s group bought a work.

“It’s really important for an art fair to have a good collectors program, to invest in it, because it’s an important part of the fair,” he said. “That’s how it works.”

Anna Louie Sussman