The annual spending power of the global LGBT community has been estimated as $3.7trillion (€3.4trillion).
The figure was calculated by LGBT Capital, an asset manager that specializes in providing financial services and advice to the LGBT community.
It offers a further figure of $14trillion (€12.7trillion) for LGBT household wealth (LGBT-Wealth), and estimates that LGBT wealth in the US alone represents $5trillion (€4.6trillion).
‘It is estimated that the Global Spending Power of the LGBT consumer segment is US$3.7 trillion per annum, with an LGBT population estimate of about 450 million,’ said LGBT Capital in a statement.
‘Asia is fast developing, already with an estimated LGBT-GDP in excess of US$1 trillion and with China alone estimated to have an LGBT population of more than 80 million.’
In June, marketing giant Ogilvy and Mather announced the launch of a dedicated LGBT division, again putting an estimate on the global LGBT market in excess of $3trillion (€2.67trillion).
Paul Thompson, LGBT Capital’s Founder said ‘We believe these numbers to be extremely important in demonstrating the value offered to both countries and companies by the LGBT consumer segment.
‘The estimated population of the LGBT community worldwide is higher than the total population of the United States and the estimated LGBT-GDP nearly equals the GDP of Germany!’
‘This community is growing in voice and power, and we believe this will support the Global LGBT Diversity & Inclusion development and should be taken very seriously and command respect.’
LGBT Capital is the trading arm of Galileo Capital Management. It said in a press statement that the figures were reached ‘Using a base-line assumption that LGBT persons account for 6.5% of the total population’ and analysis of macro-economic data, including Government estimates where they exist.
On top of the wealth and spending power figures, LGBT Capital has also estimated the impact of LGBT travellers on global tourism and travel – estimating that international LGBT tourism to the US is worth some $21.5billion (€19.6billion) a year.
This compares with a figure of $65billion (€59billion) offered in 2012 by the World Tourism Organization, a specialist United Nations agency – which included both inbound and domestic US tourism.
This difference between international and domestic travel revenue demonstrates, says LGBT Capital, ‘the crucial importance for most countries of their domestic LGBT Community and its travel decisions and spending patterns.’
If anything, Thompson told Gay Star Business, LGBT Capital’s figures were likely to ‘err on the conservative side’.
LGBT Capital estimated that the LGBT spending power in the US is approximately $900billion (€821billion). This is only slightly ahead of the most recent annual figure produced this year by Witeck Communications, which estimated LGBT spending power for 2014 to be $884billion (€805billion).
Bob Witeck, of Witeck Communications, was cautious of taking an across-the-board approach to the global LGBT market, pointing out that it is a challenge to come up with an accurate figure for the US, let alone those countries where many LGBT lives remain hidden.
‘While the methodology might be sound, or at least, rational, I am not sure that we truly can assess global LGBT populations and their economic footprint in many societies,’ he said.
‘With a multicultural lens, it is a challenge to say we understand how same-sex attraction is known, identified, labeled and understood in some societies.
‘For example, with much deeper closets especially in the Islamic world, naturally if we merely estimate the assets and income of LGBT men and women living entirely covert lives, married to the opposite sex, and raising families under parental command, then that is a conundrum. Do we count them as part of the economic base?’
Thompson told Gay Star Business, ‘We ultimately believe that whilst it can be argued that the 6.5% number is quite high in some markets, other factors come in to play that mean people within the community could be argued to have higher spending power and even higher income as people are more likely to move to bigger cities where incomes are higher, focus on career and whilst in may cases people are not ‘open’ they are still part of the LGBT total spending power.’
In 2013, LGBT Capital launched a specialist wealth management service for the LGBT community.
The launch of its service followed the launch in 2012 of an LGBT initiative from Morgan Stanley that offers financial advisors and wealth-planning tools for LGBT clients.