A new report says many gallerists are frustrated at the rising costs and high risks of participating in the large volume of art fairs, with “middling” returns.
First Thursday, a London-based sales intelligence company, spoke with 56 commercial galleries across Europe, Asia, Africa, and North America for its inaugural Art Fair Report. Some of the interviews took place directly on the floors of Frieze, Art Basel, Independent, TEFAF, and Art SG.
The report found that nearly half of the galleries (46 percent) surveyed spent over £30,000 ($40,000) to attend a single fair, and nearly one in five galleries (24 percent) spent between £50,000 and £100,000. This correlates with the 83 per cent of respondents who cited high participation costs as the biggest challenge to exhibiting at fairs, followed by 77 per cent of respondents who said the uncertainty of sales was the next biggest challenge.
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“The model feels unsustainable at present,” one gallerist said.
Other comments from respondents included in the report said the high participation fees “force galleries to play it safe” but “younger galleries only make it in if they propose more daring presentations and therefore bear all the [financial] risk,” and how emerging galleries need to sell a lot of works to cover their expenses.
As a result of these high costs and uncertainty about sales, the report said galleries are rethinking their participation strategies, with 31 percent of respondents saying they would attend fewer fairs.
“Rather than expanding, many galleries are choosing to slim down their schedules and focus on a smaller number of key fairs where they believe the return will be best,” the report stated, noting some galleries mentioned shifting investment to digital platforms, social media, and digital marketing.
More than half of the galleries surveyed (57 percent) had been in operation for more than 10 years, and the majority of galleries focused on emerging (77 percent) and mid-career artists (72 percent) rather than late-career or estate artists (25 percent). The galleries surveyed attended an average of 4.4 art fairs per year, with only nine percent attending 10 or more.
Galleries surveyed by First Thursday said they wanted fairs to “lower participation and production costs, more flexible formats such as split booths or commission-based models, and improved VIP and collector engagement,” including curated introductions and tools that would help convert interest into sales after the fair.
Even with high costs and sales uncertainty, the vast majority of respondents (71 percent) said exposure to new audiences was the most valuable part of participating in art fairs, compared to sales and revenue generation (57 percent) and networking with collectors (57 percent).
Notably, despite the popularity of online art sales, most galleries surveyed by First Thursday are still using analog methods of pen and paper to record inquiries at their booths (83 percent) and relying on business cards (60 percent). Only 31 percent of galleries surveyed by First Thursday entered leads into a customer relationship management (CRM) system immediately.