Royal Wedding not likely to deliver promise of $1.9 billion to the UK economy

A UK consultant estimates the Royal Wedding to be worth about £1 billion (NZ$1.9b), but past events suggest it might not have as much economic impact as the hype suggests.

David Haigh, CEO of UK valuation and strategy consultancy Brand Finance, told Newstalk ZB's Mike Hosking the billion pound estimate is derived from influx of toursits to Britain.

"Visit Britain estimates that 350,000 additional tourists will come to the UK this year, that's on top of about 50 million tourists which come each year, and the incremental spend will be about £350 million - just for the extra tourists," Haigh said. "We also looked at the likely effect on retail sales, drink, restaurants, and we put a number of £250m on that."

He said the royal wedding was basically free advertising.

"The Royal Wedding basically gives free coverage worldwide to hundreds of TV stations and radio stations and its worth somewhere in the order of £300 million, so it's not difficult to get to a very high number contributing to the UK economy."

Haigh said estimations were based on spending from outside of the UK.

"We are [also] estimating somewhere near £50 to £75m worth of memorabilia will be sold this year; it's not just things like t-shirts, tea towels and mugs, it's also things like coins, stamps and very valuable things."

He also said the British monarchy contributed £1.5b to the UK economy annually.

"People say that's a ridiculously high number but the UK economy is [worth] £2.3 trillion so that is a fraction one tenth of the per cent of GDP."

These numbers sure do make for impressive headlines, but economic analysis from previous Royal Weddings suggests the impact might be overstated.

While retail spending will increase thanks to the event, past experience shows grand royal events don't usually produce the big bucks businesses would like.

The Financial Times reports the Royal Wedding will fall flat in terms of economics.

According to the UK Office for National Statistics, the 2011 wedding of Prince William and Kate Middleton did not result in a noticeable uptick for the economy.

Most workers were given an extra day off when William got married in April 2011, denting activity across the British economy that month.

Setting aside the hit from the day off, there was no noticeable lift for the economy, FT reports.

PwC estimated Prince William's wedding generated roughly £107 million (NZ$210 million) in extra spending, less than 4 per cent of the amount spent in the UK on Black Friday, one of the busiest shopping days of the year.

His nuptials were responsible a fall of 1.2 per cent in output in services industries, a 1.6 per cent fall in the index of production and a 1.4 per cent fall in manufacturing production in April 2011, compared with the previous month, according to the UK Office for National Statistics.