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Compared to 2019, the Tate galleries in London are seeing ~2.2 million fewer visitors, representing an approximately 27% decline in patronage. Much of this is coming from a decline in international/European visitors. They're at 61% of pre-COVID levels, whereas domestic visitors are at 95%.
One of the biggest groups to fall off has been young visitors (aged 16-24) from the EU. Between 2019-2020, the Tate Modern alone welcomed 609,000 people from this segment. By 2023-2024, this had dropped to 357,000 and it remains depressed.
So now the Tate is cutting its staff and blaming two macro changes: the pandemic and Brexit. Though some people are arguing that it's really because the programming has been too woke and stuff.
In my mind, the Brexit excuse makes the most sense because it has clearly created additional friction. If you're a school traveller in France and want to visit the UK, you now need to complete a school trip information form (I'm assuming this wasn't the case before).
And if you're a student from any another country, you need a passport. In some cases you may also need a visa. So it makes sense that schools and teachers might say, "yeah, let's make our lives easier and just stay within the EU."
Based on a very cursory review of how other cultural institutions are doing, this possibly checks out. In 2019, the Centre Pompidou in Paris welcomed over 3.2 million visitors and in 2024 it welcomed 3.2 million visitors. In 2019, the musée d'Orsay and the musée de l'Orangerie welcomed over 4.6 million visitors, and by 2023, this number had jumped to over 5.1 million.
Could it simply be better programming? Yes, of course. But it's hard to argue that erecting barriers to become more closed off from the rest of the world, won't, you know, make you more closed off from the rest of the world. Here we're just talking about one cultural institution in the UK. But the lesson scales.
I'm thinking of you right now, America.
So this seems like a pretty cool strategy.
Amancio Ortega — who is the founder of the fashion brand Zara — is a ~59% owner of Inditex, which is the largest fashion group in the world and the parent company of Zara. This ownership stake sits in his investment vehicle Pontegadea and each year the dividends of Inditex result in many billions of euros being deposited into its accounts.
In 2022, it was ~€1.7 billion. In 2023, it was ~€2.2 billion. And this year, it is forecasted to exceed €3 billion for the first time. What Ortega has decided to do with these billions is diversify risk away from the fashion sector and preserve generational wealth through stable, income-generating real assets. In other words, the strategy is to go around the world, buy the coolest trophy assets, and build a wealth fortress.
For example, in 2022, Pontegadea acquired Royal Bank Plaza in Toronto for ~C$1.2 billion. This was one of the largest office building transactions in Canadian history and, as far as I can tell, it's the largest single-asset purchase made by the company to date.
This year alone, they've acquired an apartment building in Fort Lauderdale for €165 million, an office building in Barcelona for €250 million, and Hotel Banke in Paris for €97 million. This was their second acquisition in Paris this year, and hospitality seems to be a new push for the firm.
Having billions of euros show up every year to recycle into global real estate acquisitions is pretty neat in its own right. But I also think it's interesting to monitor where and what he's buying. Pontegadea is not trying to time the market or bet against short-term dislocations. They're methodically building a fortress of core assets in the world's top global cities.
Intuitively, we know what these core assets
Watching Pontegadea feels like a direct commentary on what he/they see as having enduring long-term value. And boy is it fun to watch.
Nationwide across the US, transit ridership is only at about 70% of where it was in 2019 before the pandemic. But this is not the case in all cities around the world. According to this recent Bloomberg article, Madrid, Hong Kong, and Paris are all above their 2019 ridership levels. Seoul and Shanghai are also close at just over 90%, and London is at 85%.
So this problem of fewer people riding transit seems to be a North and South American phenomenon. Rio de Janeiro is at 73%, Mexico City is at 70%, and San Francisco is somewhere near or at the bottom at 44%. The obvious explanations for this are that Europe and Asia are generally denser and less car-oriented, their return-to-office patterns have been much stronger (less WFH), and their governments probably care more about transit (and spend more money on it).
Broadly speaking, I think this is all true, but I'd love to know more precisely what's driving these differences. Because it's not exactly obvious. Consider, for example, Paris and London. Paris is at 103% of its 2019 levels, whereas London is only at 85%. Why is that? Both cities share a lot of similarities. They have a river that weaves through the middle, they're dense, they have lots of trains, and both are alpha global cities.
So why the delta? What exactly is Paris doing that is encouraging more transit usage?
Charts via Bloomberg
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