Monday, November 7, 2011

Museums and entry charges

The National Maritime Museum (NMM) in the UK has seen a ‘drastic ‘drop in visits since they put in place an entry fee ( surprise, surprise) according to the latest UK Museums Association Journal. Visitors dropped from 706,952 to 470,800, but the entry fee generated an additional £521,000.

Meanwhile the Royal Ontario Museum (ROM) in Toronto under new director Dr Janet Carding (ex Deputy director Australian Museum, Sydney and prior to that the Science Museum, London) has made an early call in her directorate to cut admission prices by up to 35%, according to the Toronto Globe and Mail. Adult admission is now $15. Funding for the ROM is about 17% from visitor revenue, with 965,000 visitors in the last year. Janet is hopeful, based on survey results, that the reduction in admission will boost the numbers over 1 million.

Further south the opposite is happening with entry fee hikes going on (see two articles in The Art Newspaper). At the Met in New York prices have increased from $20 to $25, with MoMA following suit ($20 to $25) and the Museum of Fine Arts in Boston lifting theirs from $20 to $22.

Three interesting issues here:
  1. Do the numbers around charging for admission add up? In the case of the NMM their visitors dropped from 706,952 to 470,800, but the entry fee generated an additional £521,000. At a simplistic level the 706,952 pre entry fee visits generated no income at the turnstiles, but say £1,413,900 at an average £2 net in retail and catering sales. Now with entry charges the 470,800 visits generated £521,000 in entry fees and at £2 net in retail and catering sales a further £941,600, totalling £1,462,600. Once you deduct the cost of selling tickets and the related infrastructure it looks pretty line ball to me. In the UK of course this is academic where the Government makes the call that national museums have to provide free entry. They have found that increased retail and catering income tends not to cover the extra cost of dealing with larger crowds.
  2. Is pushing up the price, as in the case of the Met and MoMA or bringing it down as in the case of the ROM likely to significantly affect visitor numbers? My guess is that in New York an extra $5 for those who were probably going anyway is not going to make that much difference, and based on the numbers staying the same, it will mean an extra $8m a year into the Met’s coffers. 10% of their annual budget (currently a whopping $320m) comes from admissions. Conversely in a less affluent city like Toronto my thinking is that reducing the entry fee will have less effect, as those deterred from coming at $22 may well still be deterred at $15.
  3. Are members harder to attract if a museum does not charge, due to the loss of incentive of being able to offer free entry to members? It appears that the answer is yes, witness the astonishing 133,000 members that MoMA now has, driven in part by local visitors wanting to return regularly.
What everyone does know is that when charging museums turn to the free entry model, the numbers go roaring up. The Indianapolis Museum of Art saw numbers rise from 185,000 to 462,000 in a year after free admission was introduced in 2006.

And finally the problem of the reverse is not always a financial one, witness the political ramifications for the British Museum considering introducing paid entry. The model they were looking at was to make UK citizens free and everyone else pay. Hang on said the Europeans, isn’t the UK a part of the EU, so Euro citizens should be free? And then the Greeks joined in, pointing out that one of the key justifications for the BM holding onto the Elgin marbles is that they can be freely seen by anyone. Complicated!

Julian Bickersteth
Managing Director

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