Taylor Swift is selling out football stadiums, maxing out hotel capacities, and snarling public transit. It is estimated that her “Eras” tour that started on March 17, 2023, in Glendale, Arizona, and is set to conclude on August 17, 2024, in London, England, will reach one billion dollars in sales writes eToro analyst for Romania, Bogdan Maioreanu
There are 131 concerts across five continents including tour dates in 2024 in Europe, Asia, Latin America and some new concerts in the US. Tours are bringing temporary higher prices in respective cities but also increase in spending, lifting local economies. And the Eras tour is on track to generate an estimated economic impact higher than the GDP of countries like Barbados, Sierra Leone or Djibouti.
Taylor Swift is dominating the charts, being the current number one in Billboard artist 100 and present in the charts for 467 consecutive weeks. In the top 10 only Ed Sheeran is close with 464 weeks. In the all-time top of gross revenues of tours, the latest Billboard data is showing that Elton John’s farewell tour is number one as it was attended by 6 million people, had 330 shows and grossed almost 940 million dollars. He is followed by Ed Sheeran with his Divide Tour (2017-19) having an attendance of 8.9 million people, 258 shows and 776 million dollars gross revenues. But Taylor Swift, Beyonce and Metallica’s current tours are not counted yet as they are still on their way.
These big tours, besides creating jobs around them and grossing millions of dollars, are also bringing a lot of business and a temporary increase in prices in the transport and hotels in the cities where they perform, forcing tour goers to spend more. According to the Philadelphia Federal Reserve office, Swift is personally responsible for the spike in tourism, which has boosted their hotel revenues for the first time since the coronavirus pandemic began.
Analysts estimate that Beyonce induced a 0.2-0.3% increase in Sweden inflation at the beginning of her tour Renaissance in May this year. Taylor Swift’s tour in Australia had a direct effect on airfare tickets. Air New Zealand flights to Melbourne and Sydney have more than doubled in price in the days leading up to Taylor Swift’s concerts at the beginning of 2024, before tickets have even gone on sale. A technical term appeared – “tourflation”.
In Romania, the beginning of August means the Untold festival, four days and nights of concerts in Cluj-Napoca city park and center. For a week the hotels will be full and visitors will pay highly increased rates for lodging and transport in order to be able to attend the line-up of concerts that include this year Imagine Dragons, Bebe Rexha, Ava Max and many others.
Last year an estimated 360.000 people participated in the festival and more than 270.000 were from outside the Cluj county with 15% of all festival goers being foreign tourists. They spent an average of at least 225 euros on transportation, food, lodging and shopping in Cluj-Napoca. For the city, they brought an estimate of 60 million euros.
The data shows that the “tourflation” is much higher than the official one, with spectators prepared to pay high prices to see their idols live. Latest data from the US is showing that concert spending actually grew 32% year over year in May when adjusted for inflation. A study made by QuestionPro on the Taylor Swift concerts is revealing that concert goers are spending an average 1300 dollars per concert, putting her tour on track to generate over 5 billion dollars in economic impact. This high level of spending is good news for the respective economies.
Not very good news for the central bankers but as the concert comes and goes the inflation it might bring is truly transitory. For investors the perspective of GDP increase from spending is more important than the temporary inflation as eToro Retail Investor Beat survey revealed. Over 28% of Romanian investors fear a recession in the next 12 months versus only 4% who fear inflation.
