Low Marriage Rates, Downturn Mean Less Total Wedding Spending
The recovery is firmly in place, and as many parents and grandparents are eager to tell their offspring, wedding costs have skyrocketed since back in the day. Still, though the wedding industry appears to have recovered nicely from the recession, data also suggest that over the longer term, increases in wedding spending aren't quite making up for the decades-long decline in couples tying the knot.
[See why low-cost carriers led in airline quality last year.]
Looking at the short-term picture of the recession and its aftermath, the outlook is once again sunny for the wedding business. Data show that spending on weddings has also rebounded from the rough recession. According to The Wedding Report, which tracks wedding data, average wedding spending in 2012 is expected to be just over $26,000. That's a substantial increase from 2009's dip to an inflation-adjusted $23,400.
But even with the increased pressure on the purse strings, there are certain aspects on which couples refuse to compromise, experts say.
"What brides will not skimp on is the dress and the honeymoon," says Anne Fulenwider, editor-in-chief of Brides magazine. According to popular wedding site theknot.com, 29 percent of brides said the economy affected their 2011 wedding budgets, down from 31 percent in 2010 and 34 percent in 2009.
However, the longer-term picture shows a tougher slog back from marriage's declining popularity. Marriage rates have been on the decline for decades. In 1960, 72 percent of all adults 18 and older were married. Now, that figure stands at 51 percent. And that decline could cap business' revenues from weddings.
According to data from past Brides American Wedding Studies, weddings were somewhat cheaper a few decades ago. The average wedding in 1984 cost $7,824. That sounds bargain-basement by today's standards, but adjusted for inflation, it is just over $17,100. With nearly 2.5 million weddings that year, according to the Wedding Report's figures, that makes for around $42.5 billion in revenues.
[See why Ben Bernanke is still iffy on the recovery.]
Figures from the Wedding Report show that by 1990, average wedding spending had picked up to an inflation-adjusted $26,500--making for more than $60 billion in revenues, despite only roughly 2.3 million weddings that year. Spending ultimately grew to around $31,000 per wedding on average just before the recession. Despite only 2.2 million weddings in 2006, data suggest that the average wedding cost more than made up for it, with an estimated $68 billion in spending.
Compare that to 2011, when the average wedding cost around $26,800, according to Brides. With just under 2.1 million weddings, that makes for around $56 billion in revenues.
But wedding photographers, caterers, and venue owners have reason for hope. Plenty of brides and grooms are willing to spend to make their special days absolutely perfect. The Wedding Report projects that the number of weddings will grow slowly, along with wedding spending, over the next five years.
In addition, many businesses get income from other events. And thanks to the recession, the trend of diversification is growing.
As a result of the economic downturn, says Fulenwider, "some of the [wedding] planners did start planning other events as well. They did go into planning other parts of the party, or also doing bar mitzvahs or corporate events, and became event planners."
It has also caused some entrepreneurs to branch into other areas of the wedding business, says Shane McMurray, founder of the Wedding Report, using the example of photographers. "I've seen a lot of them do photo booths. In fact, I've talked to several that say it's helped their business tremendously," he says. "They maybe sell invitations, favors, whatever."
[Read about Americans' February shopping spree.]
In short, businesses that make money from weddings can take heart; due to recovery and population growth, revenues have plenty of room to grow, and could be particularly beneficial to local economies. But until Americans get the itch to commit (and spend) again, it may be slow going.
