Heavily penalized by the abolition of tax-free services in London, retail professionals are hoping for an economic boost with the coronation ceremony of Charles III. This event is expected to attract several million tourists to the UK. The financial impact could reach 1.4 billion pounds sterling.
Hope for an upturn for distributors
The coronation of their Majesties King Charles III and Queen Consort Camilla at Westminster Abbey on May 6 could boost the domestic market, especially for luxury retailers.
The coronation festivities of the new king and his wife promise to attract millions of tourists, whether they are nostalgic for royalty, patriotic, or just curious.
And the event’s media coverage will turn the spotlight back on the United Kingdom, whose reputation has been somewhat dented by Brexit and the exit from the EU. This will be a welcome relief in a country where tourism is experiencing great difficulties due to two years of covid, which have accelerated the closure of outlets on its soil.
But not everything is gloomy across the Channel. In 2022, the UK attracted 29.7 million visitors—an encouraging figure but still a third less than before the pandemic.
Judging by the attendance generated by the platinum jubilee of Queen Elizabeth II, there is reason to be confident. Indeed, this event – celebrating 70 years of reign – held in London from June 2 to 5, 2022, attracted more than 2.6 million additional visitors compared to previous years.
For the King’s coronation, the government has decreed an extended weekend from May 6 to 8 throughout the UK. Stores and landlords should do everything possible to attract customers. According to MRI Springboard research, the event is expected to drive a 4% increase in annual footfall across all UK shopping destinations, with high streets expected to see a 5% yearly increase.
Some of London’s major shopping streets have been adorned with temporary installations for the occasion, such as Carnaby Street with its glittery and colorful “Coronation at Carnaby” arch. These efforts in animation remain necessary because of the projections of MRI Springboard, which foresee a collapse of traffic in stores, about 8% on Saturday – the day of the coronation – compared to the previous Saturday. However, on the second holiday – and last day of this exceptional weekend – retailers are expected to see a 12% increase in traffic compared to the previous year.
The situation is all the more welcome as the country is facing an ailing economy, close to recession, aggravated by a surge in the cost of living. The International Monetary Fund expects the United Kingdom to experience the most significant decline in output of any major economy this year.
A magnet for tourists… for London
Like the platinum jubilee of the late Queen, the capital, by concentrating the bulk of the festivities, should be the primary beneficiary of the event’s spin-offs.
London, which attracts nearly 30 million visitors each year, is expecting similar or even higher attendance levels than its pre-pandemic levels.
A recent survey by UK Inbound, a tourism trade association, found that 16% of local businesses have seen an increase in bookings and searches related to the Coronation and the Eurovision Song Contest, which is due to take place in Liverpool from May 9 to 13.
A sure sign is that French people have rushed to buy air tickets and hotels in the British capital. According to the online travel booking site Kayak, flights from France to London for the weekend of May 6 recorded an increase of 207% compared to last year. Expedia, another online travel booking site, confirms this trend, with bookings jumping by 265%.
The same is true for the search for accommodation over the national long weekend, with hotel searches up by 435%.
Americans are not to be outdone, with more than 3.1 million citizens visiting London since the beginning of the year, a near-pre-emergency level.
According to Expedia, hotel bookings in London for May 5-7 are up 64% for the coronation weekend compared to the previous year. Most of this demand is driven by U.S. tourism, followed by people from the U.K.
Visitors from Canada, Germany, France, and Australia supplement international demand. According to Hopper, the number one travel booking application in North America, all these tourists will have to pay an average of 313 dollars for their night stay, compared to 222 dollars the previous year.
These are promising signs, while the Chinese, the second largest market in terms of value for the luxury hotel and restaurant industry, are still absent.
This is a situation that Harrods, the luxury shopping institution in London and around the world, has managed to compensate for in the fiscal year 2022, returning to its pre-pandemic level, boosted by an increase in customer traffic from the Middle East.
Tourists in attendance may well be tempted to visit the historic royal residences (Buckingham Palace, Kensington Castle…) and the more fictional ones. Indeed, The Crown, the successful Netflix original series, was not filmed in real places of power, which aroused fans’ curiosity.
And it is likely that Belvoir Castle, owned by the Duke of Rutland’s family since 1067, the stand-in for Windsor Castle in the series, will attract many visitors.
The same could be said for Ely Cathedral, the duplicate of Westminster Cathedral where the Queen – played by actress Claire Foy – was married, located in the historic town of Ely, especially since only 2,000 hand-picked people are allowed to attend the ceremony in the official cathedral.
The British luxury brands positively view this influx of tourists, which has recently seen their presence in stores melt away.
For a long time, a top luxury place in Europe, London has lost its reputation since Brexit, so it is no longer a must-see luxury shopping destination for tourists—the fault of removing the VAT recovery for non-EU tourists in the country.
This situation benefits its European rivals, such as Milan, Paris, Venice, and Madrid. Every week, 5 million pounds sterling are spent outside the United Kingdom by its wealthiest citizens, which could benefit the country, according to estimates by Walpole, the organization responsible for promoting British luxury goods. This is why many voices are being heard, such as the head of Burberry, for a rapid restoration of the tax exemption to revitalize the business of luxury retailers and department stores.
Long considered the wealthiest city in the world, London has been demoted to fourth place this year in Henley & Partners’ ranking of the world’s richest cities. However, it is still the only European city in the top 10. Social tensions and the rise in crime in the city have led many of the world’s wealthiest people to choose other places to live.
A royal halo effect
Whether it’s merchandise and other kitschy souvenirs, TV programs, other series, exhibitions, or cultural venues… It’s a fact the royal family sells, and the coronation on May 7 should prove it once again.
Sir Jon Ive will not say otherwise. This Chief Design Officer, veteran of the great hours of Apple, has just signed, through his company LoveFrom, the logo design linked to the coronation of Charles III: the Coronation Emblem. A bucket whose aesthetics “pays tribute to the king’s love for the natural world, unifying the flora of the four nations of the United Kingdom; the rose of England, the thistle of Scotland, the daffodil of Wales and the shamrock of Northern Ireland.”
The brand has a look not unlike the Terra Carta initiative. A distinction that highlights private sector companies demonstrating substantial efforts toward sustainability. This design is expected to be omnipresent during the coronation ceremonies and festivities.
The retail consultancy Centre For Retail Research (CRR) estimates that the event is expected to generate £245 million in souvenirs and over £1.4 billion if the tourism and celebration spin-offs around the various events are included.
Luxury brands have understood the appeal of royalty to the point of counting on the halo effect of being an official supplier to the crown. This honorary title is enjoyed by local brands such as Fortnum & Mason, Aston Martin, Burberry, and Barbour.
Although the impact on sales of such recognition is difficult to measure, companies such as tea supplier Fortnum & Mason state on their website that they are “proud to have held a warrant from Her Majesty since 1954, and to have served her and the rest of the Royal Family throughout their lives. The Queen has also recognized the House by her son Charles III, which guarantees the brand the durability of such a warrant, while the monarch’s death leads to its de facto revocation unless his successor decides otherwise. This precious mandate recognize, above all, know-how and tradition. Charles III added ethical conditions.
Some, like Burberry, supplier to Her Majesty with its trench coats since 1956, are fortunate to have two royal mandates: that of the late Queen and that of King Charles III.
Building on this bond of trust, the brand with the equestrian knight has also just signed a capsule collection Burberry Highgrove: a scarf whose floral motifs celebrating nature are inspired by the gardens of Prince Charles’ residence.
This British international icon is hoping to attract even more customers, thanks to the rebranding of its image by its new artistic director Daniel Lee. The latter has drawn a line under years of punk and gothic aesthetics led by Ricardo Tisci. Some international brands, such as the champagne houses Mumm, Moët & Chandon, and Veuve Clicquot, are also part of this closed circle of official suppliers to the crown.
This title, granted on a case-by-case basis, authorizes companies that regularly supply goods or services to the royal family to communicate about their proximity to the family and to use its heraldic arms in their communications or on their products. The coat of arms in question represents the English lion on the left and the Scottish unicorn on the right armed with a shield decorated with the emblems of the different regions of the United Kingdom. Queen Elizabeth issued 686 Royal Warrants during her reign, while Charles III granted 159 since his accession to the throne. On the other hand, an act of parliament dating from 1887 – The Merchandise Marks Act – punishes as an offense anyone who would avail himself of the title without having been previously authorized.
London shopping temple Harrods, not on the list of beneficiaries of these royal mandates, has also launched a collector’s item for the occasion: a tote bag in the coronation colors. This will boost its traffic in stores and on its website. On this last point, the Knightsbridge department store is counting on its strategic partnership with the luxury e-commerce platform Farfetch, revealed at the previous NRF trade show in New York, to further personalize its remote customer relationship.
Brand Finance, the leading brand valuation consultancy, estimates that the monarchy would stimulate the local economy to the tune of 500 million pounds per year. This is enough to compensate for the £350 million that its lifestyle costs the taxpayer.
The experience of a lifetime
“Once in a lifetime” is an Anglo-Saxon expression that seems to motivate a good number of tourists and residents who are enthusiastic about the idea of attending the coronation from near or far. A way for them to take part in a piece of British history. After all, this is the first British coronation of the 21st century!
To measure the significance of this, we need only remember that the coronation of Queen Elizabeth II – on June 2, 1953 – had been, in its time, “the event of the century,” while the union between Prince William, Duke of Cambridge with Kate Middleton on April 29, 2011, had been considered “the wedding of the century.”
So for those who missed the latter and the Queen’s platinum jubilee last June, a catch-up is needed.
Most want to immerse themselves in a world that’s nothing like a fairy tale. This is what the private chauffeur application Uber has discovered. The company is providing its users with a carriage from Carriage Drive in Dulwich Park to mark the occasion. For a confoundingly realistic experience, the vehicle is heavily inspired by the “Gold State Coach,” the golden carriage of royalty that has transported crowned heads since 1762. The pseudo-royal escapade will occur in Dulwick Park alone, a green space of more than thirty hectares in South London.
This experience results from a survey addressed to the British people where 48% of the respondents had declared to dream of riding in a royal carriage.
Taking advantage of the excitement in the British capital, the Accor group took the opportunity to promote its latest establishment, which is due to open next summer: The Raffles London at the OWO.
The group’s CEO, Sébastien Bazin, wants to make the address “one of the best on the planet.”
Many hotels have planned programs, activities, or menus to match the coronation of Charles III. The Dukes London offers its “Royal Connoisseur Experience.” A two-day stay in an executive room with breakfast with Exmoor caviar and champagne accompanied by its traditional four-course cream tea dinner.
The Royal Lancaster offers an “Afternoon Tea” composed of the favorite flavors of the future sovereign. The Dorchester Hotel offers a five-tiered cake in honor of the coronation, while its façade is covered with a theatrical drapery reminiscent of the coronation of Queen Elizabeth II.
A former haunt of Oscar Wilde, George Bernard Shaw, and Virginia Wolf, the five-star Café Royal Hotel is offering its “Crown Jewel Experience,” a memorable night in its royal suite, with a limousine ride to the Tower of London to see the crown jewels, for £12,995 ($16,000).
Finally, for those who would be sorry not to be able to attend the event, the British media Sky News had the idea to propose an experience in augmented reality, in partnership with Atlantic Productions, allowing them to get closer to the jewels of the crown, solidly guarded in the Tower of London.
You can contemplate the most exposed treasures, such as the solid gold crown of Saint Edward, made in 1661 for the coronation of Charles II, following the destruction of the original crown on the orders of Olivier Cromwell during the English Civil War. It is the crown that Charles III will wear during the ceremony on May 6.
LVMH was not mistaken. Communicating on the opening of the completely renovated 10-story flagship in the heart of Manhattan of the jeweler Tiffany & Co, the group did not hesitate to speak of “jewels of the New York crown.”
Read also > [Luxus+ Magazine] A short history of luxury: the House of Moët & Chandon and the British Royal Family
Featured photo :© London Luxury
