The decision of Prince Harry and his wife, Meghan, the Duchess of Sussex, to take a step back from senior royal duties is packing not only a punch to the gut of royal enthusiasts, but it’s also expected to wallop the British economy.
“There will be a huge reputational hit to the royal family as a brand as a direct result of Meghan and Harry’s announcement,” Charles Scarlett-Smith, a client and marketing director at Brand Finance, said.
“The royal family is fairly essential to the British economy,” Scarlett-Smith said. “The income of £1.8 billion they add to the British economy each year is enormous, and therefore any development that can affect them negatively is going to have a remarkable effect on the British economy.”
According to a report released by Brand Finance in 2017, the royal family’s worth is valued at about $88 billion, thanks to the economic power they possess in the realms of tourism and fashion, and to their assets, which include the crown jewels.
Brand Finance also reports the monarchy generates an estimated £1.8 billion ($2.3 billion) for the economy of the United Kingdom each year.
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“The impact they have on the British economy is unequaled,” Scarlettt-Smith said. “It’s really very powerful.”
For decades, a debate has raged in Britain, pitting republicans, who wish to do away with the royal family, against monarchists and others who support them.
The debate picked up considerable steam in the 1990s, when Princess Diana and Prince Charles, and Prince Andrew and his wife, the former Sarah Ferguson — two of Britain’s most popular royal couples at the time — both divorced in a very public and, some would argue, disgraceful fashion.
While many in Britain question the logic of continuing to support a fractured family with taxpayers’ money, the saving grace of the royal family has remained the income they continue to generate for the British economy.
The enormous popularity of the royal family has even “considerably” softened the potential negative impact of Brexit, according to one survey.
Britain’s national tourism agency reports the royal family generates some $767 million every year just from drawing visitors to historic sites. Of the 30 million foreign visitors who came to Britain annually, 20 percent visit a castle.
In recent years, tourism to Britain has increased as a direct result of notable royal events, including the marriage of Prince William to Kate Middleton in 2011 and the marriage of Harry to Meghan Markle in 2018.
Harry and Meghan’s wedding alone pumped an estimated $1.4 billion into the British economy.
Scarlett-Smith said the couple’s decision to step back from their royal roles comes during an already difficult time for the royal family. In December, Andrew, the queen’s second oldest son, bowed out of public life after a disastrous interview with the BBC, in which he failed to express remorse for his friendship with convicted pedophile Jeffrey Epstein. Earlier in the year, the royals were dogged by rumors of a reported rift between Harry and William.
Scarlett-Smith said that there will be all kinds of ramifications in the wake of Harry and Meghan’s departure from senior royal duties. Among them: a number of British companies that may have benefited from Meghan and Harry and their baby, Prince Archie, wearing their brands will not see the economic boost they’d hoped for, as the royal couple may take their influence elsewhere.
Still, Scarlett-Smith said, he anticipates the royal family will ultimately bounce back from the curve ball it’s been thrown.
“This is an opportunity for the royal family to reinvent their image,” Scarlett-Smith said. “I think the net positive will be we’ll see a much more modern and relatable royal family at the end of it. Prince Harry and Meghan have shifted our understanding of what a royal family can be. Coming out of this, we’ll see a new generation of royals much more involved in society.”