Another factor helping to soften the blow for art businesses was that many high-net-worth individuals saw their fortunes grow last year. The report notes that while the number of billionaires fell by 30% in 2009 during the great recession and their collective wealth shrank by 45%, the number of billionaires in the world rose by 7% last year and their wealth increased 32% year over year. The rush of galleries opening outposts in places like Palm Beach, East Hampton, and Aspen reflects dealers’ efforts to reach large groups of high-net-worth individuals in the places many of them opted to ride out the worst of the pandemic.
“People were there and they had money, especially at the high end, and were really looking for ways to spend it,” McAndrew said. “There weren’t that many other outlets for more discretionary purchasing.”
Of the more than 2,500 high-net-worth individuals surveyed for the report, two-thirds said the pandemic had increased their interest in collecting. Among those high-net-worth collectors, millennials were the biggest spenders, with 30% of them reporting they’d spent more than $1 million on art in 2020. Such figures are encouraging, but the report also suggests dealers were largely focused on making sales to existing clients last year, while finding and nurturing new collectors proved more challenging, especially in the absence of in-person fairs and with many galleries’ showrooms closed for months. Galleries’ collector bases went down from an average of 64 clients in 2019 to 55 clients last year.
“A lot of galleries really relied on their existing client base to make sales, and they pushed sales with clients they knew already,” McAndrew said. But “people do become maxed out, people won’t buy every single year. Galleries need to keep on refreshing their clients over time, or they don’t have those established clients for the future.”