A royal impact on the economy?
Over the past decade, the UK has played host to events including the Diamond Jubilee and the wedding of Prince William and Kate Middleton. This week will see another Royal wedding when Prince Harry marries American actress Meghan Markle. These celebrations arguably raise the international opinion of the UK, lift the national mood and lead to an influx of tourists. But how do events such as a Royal wedding actually impact the economy?Previous royal events
According to the Office for National Statistics, an additional 350,000 tourists visited the UK in April 2011 at the time of the Duke and Duchess of Cambridge’s wedding, in comparison with April 2010. That is 350,000 more people spending on hotels, as well as in shops, pubs and restaurants. Similarly, the weekend of the Queen’s Diamond Jubilee in 2012 brought in an additional £120 million in sales in London.
While on the face of it, this increase in spending would seem to have positive impacts on the economy, both royal events actually saw economic output decrease, with the Bank of England estimating GDP decreased by 0.5% in the second quarter as a result of the Diamond Jubilee alone.
Could this wedding have a different effect?
The short answer is yes, it could. Much to the British public’s dismay, it was decided that the wedding of Prince Harry and Meghan Markle would be held on a Saturday, without a public bank holiday. On average, research suggests that a bank holiday costs the UK £2.3 billion in lost economic output due to closed shops and lost working hours.
The wedding of Prince William and Kate Middleton also saw people take annual leave to coincide with the additional bank holiday and a late Easter. So, whilst there may have been tourists flooding into the country, this was coupled with Britons leaving to go abroad with their additional holiday (a total of 4.81 million Britons over April 2011 to be exact!).
As with previous royal celebrations, the upcoming wedding will likely have a positive influence on the tourism industry with some sources estimating that it will add over £500 million to the economy from increased spending. Since news of the engagement broke, souvenir shops have been lining their shelves with memorabilia, such as mugs and tea towels, adorned with pictures of Prince Harry and Meghan. Further, the fact Meghan Markle is from Los Angeles could encourage more American tourists to the British capital, with the Royal Family being one of biggest draws to the UK for Americans.
As for how much the wedding itself will cost, a statement released by Kensington Palace made it clear that the Royal Family will be paying for core elements of the wedding, including the decorations and the reception. However, similar to the Duke and Duchess of Cambridge’s wedding, and other national events, the costs of security and policing will be paid by the taxpayer.
Despite the taxpayer covering these security costs, the lack of an extra bank holiday will likely result in this Royal wedding having positive impacts on the economy!