A UK bank holiday to mark Price Harry’s marriage to actress Meghan Markle could adversely affect the UK’s economic growth, but any slowdown is likely to be short-lived and costs could also be offset by an influx in related tourism spending.
Clarence House on Monday announced that Price Harry, who is fifth in line to the throne, will marry Ms Markle next spring. It’s not yet clear whether the UK will observe a bank holiday to mark the occasion, but a study conducted back in 2012 by the Centre for Economics and Business Research (CEBR) showed that, on average, a bank holiday costs the UK £2.3bn in lost economic output.
Separately, an article published in August this year, by the Open University Business School, citing official data on the UK’s gross domestic product growth, shows that in years when there is a one-off bank holiday – for example to mark a royal wedding or a jubilee – economic growth has been adversely affected.
One estimate cited by the article, put the cost of the bank holiday to celebrate the 2011 wedding of Prince William and Kate at 0.4 per cent of GDP in the second quarter of 2011. But it also states that this cost is estimated to have been recouped shortly afterwards.
Royal weddings, like jubilees, traditionally generate a surge in tourism spending so although a bank holiday could dent economic output temporarily, it’s highly unlikely to be significant.
Professional services firm PwC in 2012 estimated that the economic benefit from the 2011 Royal Wedding to London from visitors’ expenditure alone was around £107m.
A slump in the pound since June 2016’s Brexit vote has already bolstered tourism from abroad to the UK, so a Royal Wedding could well accentuate that trend.
The British Retail Consortium at the time of the 2011 Royal Wedding estimated the spending influx at around £500m as a result of the event, and a surge in demand for clothes by brands worn by the Princess also supercharged industry revenue.
The Open University research also shows that the UK has significantly fewer bank holidays than other countries, so an extra one would not mean we are “over-rewarding ourselves”, it said.
Spain, for example, has fourteen and France twelve. And the Open University notes that business lost in some areas of the economy could easily be recouped elsewhere – even on the same day
“Sure a business providing catering services to a company loses a day of earnings. But for others the work ‘lost’ on a bank holiday is just shunted to another day – for example when choosing the day to get your car serviced,” the research states.
“Elsewhere holiday related businesses like pubs, restaurants, cinemas and seaside venues can do good business.”