'Swiftonomics': How the Eras Tour Boosted the Global Economy

Introduction

The COVID-19 pandemic has greatly dampened consumer confidence and induced a surge in personal saving. Data from Statista reveals that the personal saving rate has reached a historically high 32% during the pandemic, compared to the pre-pandemic average of 6% (Statista, 2024). This sharp increase underscores people's reluctance to spend amidst economic uncertainty and fears of a potential recession. However, Taylor Swift's concerts, now regarded as a cultural phenomenon dubbed “Swiftonomics,” have inspired millions of fans to engage in the entertainment industry (Mitra, 2024). This article will explore various economic impact of Taylor Swift's Eras Tour, examining its direct and indirect economic lift to the GDP, tourism boost and destination marketing, and the phenomenon of "fun-flation," where people continue to spend freely on entertainment and leisure activities despite rising prices.

Direct Economic Impacts of The Eras Tour

In late 2022, Taylor Swift announced her upcoming U.S. The Eras Tour, set to commence in March 2023. This post-pandemic live music immersive experience sparked excitement among people eager to engage in social events once again. Unlike Taylor's previous album tours, The Eras Tour stands out as it is designed as a tribute to Swift's discography across her 17-year career, and it covers all styles of music from her 10 studio albums, ranging from country and pop to folk and alternative rock genres (Capital FM, 2024). The tour's unique concept captivated fans worldwide: demand for concert tickets soared, with over 3.5 million fans pre-registered for Taylor's verified fan program, but only 1.5 million were given the chance to purchase tickets (Ticketmaster Business, 2022). Among those, only 40% were successful in acquiring tickets. Ticketmaster noted the unprecedented volume of traffic to their site, suggesting that Taylor would need to perform over 900 stadium shows, nearly 20 times the number scheduled, to accommodate the demand (Sharf, 2022).  

Fans paid an average of $254 for tickets through Ticketmaster, yet resale prices soared into the thousands and even tens of thousands of dollars. The Eras Tour generated an astounding $2.2 billion in gross ticket sales, exclusively from North America (TIME, 2023).

Indirect Economic Impacts of the Eras Tour

Apart from ticket sales, indirect revenue from the tour, such as merchandise sales and The Eras Tour Movie, also made significant contributions. Reports from various venues indicate that “Eras” attendees were spending an average of $40 per person on merchandise during the initial 60 Eras shows (Pollstar, 2023). This suggests that Swift's tour merchandise revenue amounted to an estimated $240.8 million, excluding purchases made on non-concert days (Gensler, 2023). Furthermore, the concert film Taylor Swift: The Eras Tour has been showcased in more than 100 countries and has grossed a total of $261.7 million in global box office revenue (Office Mojo, 2024). Surpassing all previous records, it now stands as the highest-grossing concert film of all time, unseating the former titleholder, "Michael Jackson's This Is It," which premiered in 2009 and earned $261.2 million worldwide (Horowitz, 2024).

Tourism Boost and Destination Marketing

Taylor’s concerts also boost the local economy, which contributes to increased restaurant profits and hotel revenue within the host cities. According to a survey by QuestionPro, concertgoers spend about $1,300 per show for hotels, transportation, and food (QuestionPro, 2023). An interesting research conducted by MasterCard Economic Institution closely investigated the economic impact on local businesses surrounding concert stadiums, examining areas within a 2.5-mile radius up to a broader 10-mile radius. They found that spending growth at restaurants was lifted by an average of 68% per day over the duration of the tour in the immediate vicinity (2.5-mile radius) of the stadium, with a more modest average boost of 7% observed in the broader area (10-mile radius) (MD&S, 2024). Similarly, spending growth at accommodations, including hotels and Airbnb, saw a notable increase of 47% within the immediate vicinity of the stadium, with a comparable rise of 32% extending to the 10-mile radius (MD&S, 2024). Moreover, the researchers discovered that stadiums in or close to smaller cities experience a more substantial boost than the larger, more densely populated cities. This trend could be attributed to the relatively smaller scale of economic activity in smaller cities, where the influx of concert attendees has a comparatively larger impact on local businesses and services (MD&S, 2024).

Figure 1. The Swift Lift within 2.5 miles of concert (MD&S, 2024)

Figure 2. The Swift Lift within 10 miles of concert (MD&S, 2024)

The surge in hotel and restaurant revenue significantly contributes to the expansion of local GDP. For instance, a study shows that Taylor Swift’s two Eras shows in Denver alone added $140 million to Colorado’s GDP, which is approximately 0.3% of Colorado’s total monthly GDP (Mueller, 2023). Similarly, the six Taylor Swift concerts in Los Angeles had a combined economic impact of $320 million, which included the creation of 3,300 jobs across different sectors. From this economic boost, $20 million was generated in sales and local sales taxes, which are taxes collected on goods and services sold during the concerts, such as tickets, merchandise, and food. In addition, the concerts also contributed an additional $9 million in hotel room taxes, which are taxes specifically applied to the rental of hotel accommodations (Hebert, 2023). Even the Federal Reserve acknowledged the impact of Swift's concerts in its June 2023 Beige Book that “despite the slowing recovery in tourism in the region overall, one contact highlighted that May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, in large part due to an influx of guests for the Taylor Swift concerts in the city (FRB, 2023).”

Because of the profitability of The Eras Tour, numerous countries like Singapore are eager to host Taylor Swift concerts to draw tourists from neighboring nations and stimulate their local economies (Taylor Swift's The Eras Tour, 2024). Therefore, competition among countries to secure Taylor Swift's concerts is inevitable. Thailand’s prime minister has raised objections to Singapore's offer of subsidies ranging from $2 million to $3 million per show, in exchange for making Singapore the exclusive venue in Southeast Asia. This strategic move proved highly lucrative, as the six concerts held in Singapore generated an estimated $225 million to $300 million for the city-state's economy, at a relatively modest investment of about $15 million from the government (Mai, 2024)

“Fun-Flation”

For all the joy it brings to concertgoers and the economic benefits it offers, Swift’s concerts have also contributed to what economists are calling "fun-flation," the trend that consumers are willing to spend money on fun experiences like concerts despite high inflation. This phenomenon is evidenced by Taylor Swift-themed doughnuts priced at $63 for a dozen, hotels charging exorbitant rates while maintaining over 90% occupancy, and even plane tickets being priced at twice their usual cost, all of which undoubtedly contribute to inflationary pressures (Pisani, 2023). In May 2023, the core inflation index in the US soared to approximately 4.7%, a stark contrast to the 1.7% recorded in January 2021. According to Torseten Slok, chief economist at Apollo Global Management, it seems that rather than abruptly raise interest rates, the only viable method to reduce inflation back to 2 percent is to crush demand and slow down the economy in a substantial way (Financial Times, 2023).

Conclusion

To sum up, Taylor Swift's The Eras Tour has emerged as a powerful economic force in revitalizing the entertainment industry in a post-pandemic world. As consumers increasingly prioritize experiential spending despite ongoing inflationary pressures, Swift's influence underscores the lasting capacity of entertainment to foster economic growth and reshape consumer spending behaviors.

Edited by Disha Kumar

References

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