The Art Basel effect: How the fair has impacted Miami’s economy

By November 30, 2011

Art Basel is now in full swing! And its impact on Miami and our economy is undeniable. Just one more reason why this is one of our favorite weeks of the year.
From Monday’s Miami Herald.
The Art Basel effect: How the fair has impacted Miami’s economy
Throughout the 1990s, the post-Thanksgiving stretch was a sleepy time for tourism in South Florida. Enter Art Basel Miami Beach, which brought the country’s largest contemporary arts fair to the first week of December.
“I use the term ‘Basel effect’ quite often,’’ said Rolando Aedo, senior vice president of marketing at the Greater Miami Convention and Visitors Bureau. “From a business perspective, the numbers are outstanding.”
Compared to results seen in 2002, the year of Art Basel’s debut, revenue from the average Miami-Dade hotel room grew 51 percent for the first 11 months of 2010, according to Smith Travel Research. For December, that increase surged to 79 percent.
For hotels in Miami Beach, the change is even more dramatic. During the first week of December, the average Beach hotel room rented for 141 percent more in 2010 than it did during the same time stretch in 2002, according to an analysis by the Greater Miami Convention and Visitors Bureau.
Countless levels of hype, hyperbole and cultured fawning surround the 10th anniversary of the Basel fair. A look at the numbers can ground some of that puffery, but they mostly illustrate nine years worth of expansion for the fair itself and the circuit of events that now largely define what’s known as “Art Basel.”
• Art Basel Miami Beach enjoys the world’s largest satellite “scene” — that is, the roster of art shows that have popped up during the same week as the main event. In true Miami style, the Basel satellite roster roared during the boom years, peaking at 25 in 2008. Art Miami, once the leading art fair in the area, found it couldn’t compete and moved from January to Basel week and now reports strong sales.
The recession thinned out the satellite ranks, but 16 are scheduled for this year — more than orbit any of the other major art fairs around the world.
“It just kept growing. It became a global cultural happening,’’ said Craig Robins, the main developer behind Miami’s Design District and majority owner of Design Miami, the lone satellite fair partly owned by Art Basel’s parent company.
Robins argues the satellite shows aren’t as important as the circuit of parties, museum exhibitions, gallery installations and private events that attract VIPs from around the world. NetJets, a Basel sponsor that sells private-jet usage, expects about 150 flights in and out of the Miami area this weekend — more than double the 70 flights Net Jets sold in 2002.
No official numbers track the Basel social scene. But Max Sklar, Miami Beach’s tourism director, said the Basel week has shaken off its recessionary slump and regained its status as the busiest stretch in the city for high-end catered events.
“Nothing compares to this,’’ Sklar said.
• The main show is far larger than it was in the beginning, despite a battering by the global financial crisis. Roughly 260 galleries are anticipated this year at Basel’s home in the Miami Beach Convention Center. That’s a 62 percent increase from the fair’s arrival in 2002.
Expansion hasn’t made the Basel show a broader platform for local galleries, which are mostly left to exhibit at satellite fairs or draw collectors into their storefronts . While four galleries from Miami got invitations to exhibit at Basel Miami Beach in 2002, only three made the cut this year out of about 10 that applied, said selection committee member Fredric Snitzer.
“If you do the math, of all the galleries in the world, that’s pretty good,’’ said Snitzer, whose Miami gallery automatically gets a Basel invitation for being part of the selection process.
The fair started in the midst of economic turmoil, and the roller coaster ride continued. Basel originally was set to arrive in December 2001, but the terrorist attacks of that year prompted organizers to wait a year.
As real estate boomed and stock-market wealth flourished, art sales did, too: the Mei-Moses index of contemporary art saw a 188 percent increase from 2002 to 2007, compared to 97 percent for Miami real estate on the Case-Shiller index.
“It’s done very well because there was a lot of new wealth created,’’ said Mike Moses, a co-founder of the index and its home on arta “It seems that new wealth tends to go to new art lately.”
But as the financial crisis erupted, Basel felt the hit, too. Galleries pulled out, art prices plunged, corporations slashed lavish entertainment budgets. A growing backlash against banks touched the fair in 2009 as top sponsor UBS, a bailed-out Swiss bank, agreed to a $780 million settlement on tax evasion charges that included tales of bankers using the Miami Beach fair to recruit clients.
UBS has since shut down the division at the center of the investigation, and a spokeswoman last week said the case is settled……
Read the full Miami Herald Article here: