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 The Herzog & de Meuron building
usually hosts one of the world's biggest art
fairs in June, but last year's event was
cancelled due to the pandemic and this year's
has been moved to September. The adjoining
congress centre, meanwhile, has been turned into
a vaccination hub.
The art world is reeling from the impact of
lockdowns, travel bans and social distancing,
and fairs like Art Basel suffered more than
most. The business of buying and selling art is
having to adapt to limit the damage.
Global art sales fell 22% in 2020 to $50.1
billion, UBS and Art Basel's Art Market Report
published on Tuesday showed, the steepest market
drop since the financial crisis.
But the picture was uneven, as buying by the
ultra-wealthy, notably from Asia, held up.
In contrast to the 2007-2009 financial crisis,
when many of the world's rich lost money, the
super-rich have become richer during the
pandemic as financial stimulus and volatile
markets served to increase their fortunes.
Big auctions houses, led by Sotheby's and
Christie's, were already used to telephone
bidding and online sales, and so could pivot
relatively easily to appeal to cash-rich
clients.
Both reported an overall dip but saw record
online activity and resilience among Asian
buyers, while pre-pandemic trends of interest in
Black, female and living artists were
reinforced.
This year, they hope to build on that,
capitalising on an influx of young collectors
who have found the online world more accessible
than old-style auction rooms, and as more
traditional buyers yearn to return to the real
world.
"There is enormous pent-up demand for
experiences and even spending, once there's a
bit more stability and predictability,"
Sotheby's Chief Executive Charles Stewart told
Reuters.
"We have the potential for just the biggest boom
for a period of time, assuming that we get to a
place where people are comfortable leaving their
house."
BEEPLE
For Christie's, 2021 has seen spectacular
confirmation of the potential to create wealth
from the virtual world as it hosted a
record-breaking $70 million digital artwork sale
this month.
In an online auction held over 14 days, bids on
the work by U.S. artist Beeple started at $100
and accelerated dramatically, with 22 million
visitors tuning in for the final minutes of
bidding.
Christie's plans to follow up on the success
with further sales of non-fungible tokens (NFTs),
or artworks that exist only in digital form.
More people appear to be willing to purchase
artworks online without seeing the real thing
first.
"What we have observed is the simple behavioural
truth that collectors are more willing than ever
before to buy from an image," said Rachel
Lehmann, co-founder of Lehmann Maupin, which has
galleries around the world.
But she added that the digital space presented a
challenge for artists and artworks that don't
translate well into an online image.
WINNER TAKES ALL
For German artist ANTOINETTE, lockdown was not
all bad: the cancellation of public events
allowed her an extended stay in the east German
castle of Merseburg where she was working.
Using only pencils, she is creating intricate
drawings on 5-metre high panels that form part
of a multi-year project on European cultural
identity entitled "ALTAR of Europe".
Socially-distanced locals can watch her work
through the windows and ANTOINETTE said they had
become her network.
"I've come to feel like a part of the
community," the artist told Reuters.
But if she is fulfilled artistically,
financially her situation is perilous, as
commissions such as portraits have dried up
during the pandemic.
Smaller galleries are also struggling, experts
say, because the pandemic has accelerated the
concentration of the art world into fewer hands
- very wealthy buyers and high-profile and
established sellers. https://reut.rs/2LNUmNW
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 "Compared to the last
recession, when everybody's wealth went down, in
this one billionaire wealth has really risen,"
art economist Clare McAndrew, who authored the
Art Market report, said.
"These things are good for art sales ... But it
does bring us back to our old problem of the
infrastructure being very top heavy and kind of
winner-takes-all."
The UBS and Art Basel report found fairs
accounted for 43% of art dealer sales in 2019
but only 22% in 2020, just under half of which
were generated by digital events.
"The digital world is concentrating buying on
what is fashionable (on social media) and
through the big galleries that employ more than
100 people," said James Mayor, who has run the
Mayor Gallery in London since taking it over
from his father in 1973.
Although he always attended Art Basel, he has
avoided its digital offerings, which he says are
no substitute for the real-life event. Some
others agree.
"So far, digital formats have not replaced this
as we benefit from face-to-face interaction and
the atmosphere of a physical fair," Stefan von
Bartha, director at Basel-based gallery von
Bartha, told Reuters.
It is not just galleries that suffer.
During a normal year, Art Basel's nearly 100,000
visitors to the city help boost hotel room
occupancy to almost full capacity during the
first four days of the fair, or by some 35%–60%
over average levels over the week, Basel's
tourism office said.
SOUL SEARCHING
Galleries and advisers interviewed by Reuters
anticipated a recovery in demand for fairs and
art tourism post-pandemic.
Art Basel has scheduled a fair in Hong Kong for
late May. Other major fairs, including TEFAF and
Frieze, have said they expect to proceed with
live fairs in some format later this year,
complemented by digital participation.
But even before the COVID-19 crisis, some said
there were too many fairs, and galleries and
collectors say they will be more selective,
sticking to the more local focus they have
experienced over the last year.
In Hong Kong, galleries report strong business
as China made an early recovery from the
pandemic and the appetite for contemporary
Chinese art grows.
"People have become very used to the
extravagance of big fairs and big biennales
celebrated in so many major cities," Leo Xu,
senior director at David Zwirner Hong Kong,
said. "Honestly, I don't miss that."
The gallery, one of Zwirner's six international
locations, managed to increase sales in 2020, Xu
said, primarily through outreach to wealthy,
tech-savvy Chinese.
Also in Hong Kong, the Villepin gallery, run by
former French prime minister Dominique de
Villepin and his son Arthur, opened in March
last year at the height of pandemic lockdown and
said it had done "very well".
In New York, gallery owners said there were
positives, including a much-needed reassessment
that might mean peripheral art fairs disappear,
while Art Basel will almost certainly bounce
back.
Sean Kelly, who runs a contemporary art gallery
in New York, said the loss of art fair revenues
has been offset by cost savings from not
attending.
"We have to start thinking about the cost of the
art fairs and I don't mean the financial cost. I
mean the physical and environmental cost," he
said.
(Reporting by Brenna Hughes Neghaiwi in Zurich,
Barbara Lewis in London and Joachim Herrmann in
Merseburg, Germany; Editing by Mike Collett-White)
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