The wedding of Prince Harry to Meghan Markle will benefit the British economy by over £1 billion, spread across several different industry sectors, according to the analysis by Brand Finance, the world’s leading independent brand valuation and strategy consultancy.
Retail and Restaurants
The wedding is attracting remarkable public attention, especially in the United Kingdom, the USA, and the Commonwealth. As a result, the tourism industry is forecast to receive the greatest benefit at around £300 million in additional travel and accommodation spend.
This boost is expected to be led by increased inbound tourism to London and Windsor for the wedding day and throughout the year, especially from the USA. The economic impact analysis is based on a predicted 3% uplift in non-business visits from the USA, and a 2.5% uplift in non-business visits from the rest of the world. This is a conservative estimate, consistent with the inbound travel surge experienced during 2011, when Prince William married Kate Middleton.
David Haigh, CEO of Brand Finance, commented:
“It is natural that Meghan Markle’s royal wedding is attracting a lot of attention across North America both in her native USA and in Canada, where she lived for several years. But the event’s appeal extends far beyond those geographies. With the recession a memory of the past, global mobility increasing, the pound depreciated, and an incredible media interest in the event, tourist numbers are likely to exceed expectations.”
In addition to tourism-related boost, other benefits to the British economy include:
· PR Value: Earned media coverage for Brand Britain in the run up to the royal wedding and live from Windsor, with a value of at least £300 million. This is a conservative estimate of the expected total Advertising Value Equivalency (AVE) of television broadcast coverage planned within USA, Canada, Australia, New Zealand, and the rest of the world (£130 million), as well as the online and print coverage worldwide (£170 million).
· Retail and Restaurants: Approximately £250 million of benefits are projected to flow to retailers and restaurants through parties, food and celebratory drinks. A YouGov poll found that 39% of UK residents were pleased by the engagement and wedding, which projected to the overall population gives over 25 million people. An average spend of just £10 per person on royal celebrations will result in a total expenditure of over £250 million.
· Merchandise: Projected sales of wedding-related merchandise are expected to exceed £50 million, especially focused on commemorative coins, stamps, mugs, clothing and accessories. This corresponds to just a quarter of sales estimated by the Centre for Retail Research for the Duke and Duchess of Cambridge’s wedding in 2011.
· Fashion: Meghan Markle is a fashion leader, with numerous outlets monitoring her daily fashion choices. £150 million is expected in increased clothing sales associated with the ‘Meghan Effect’, creating export opportunities for British brands. Through research on Meghan Markle-focused fashion blogs, Brand Finance constructed a hypothetical outfit of clothes worn by Meghan, coming to an aggregate price of just under £3,000. £150 million would be generated by just over 50,000 sales of those complete outfits.
David Haigh, CEO of Brand Finance, commented:
“Meghan Markle is an accomplished actress in her own right, with a global popularity and a strong personal brand. It can be expected that, supported by her association with Brand Monarchy, she will become a powerful ambassador for British brands, especially in her native United States. Although we are observing only the beginnings of the ‘Meghan Effect’, it will undoubtedly match or even surpass the ‘Kate Effect’ in its influence on the fashion industry.”
The economic boost generated by the royal wedding is in addition to the general uplift that the monarchy provides to the UK economy annually, which the Brand Finance Monarchy 2017 report estimated at close to £1.8 billion last year.
Note to Editors
Brand Finance spokespeople will be present in Windsor throughout the day on the 19th of May.
Detailed explanation of calculations and methodology is available upon request.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
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The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.