Economic Impact of Taylor Swift’s Eras Tour: Is It Overstated?

The devil’s in the details, but local economies have certainly benefited from Taylor Swift’s Eras Tour. The economic effect of the “Karma” singer’s show has garnered attention from industry experts and financial analysts alike. However, a new report from Japanese investment bank Nomura questions whether the tour’s impact on national data may be overstated.

Boosting Local Economies

Between the first and third quarter of 2023, Swift’s tour elevated nominal U.S. retail sales by 0.03% and real gross domestic product (GDP) by 0.02%, according to Nomura estimates. For the entire year, the tour accounted for 0.5% of nominal consumption growth.

While these figures may be considered marginal, Nomura’s global economist Si Ying Toh emphasizes that the economic boost, dubbed the “Swift-lift,” is undeniable for the 20 U.S. cities she visited. Notably, lodging inflation in these cities saw an increase of 2.1 percentage points during the month of Swift’s visit, based on data from STR. Data from hotel booking platform Trivago also indicated a similar rise.

Local Impact Examples

In Chicago, lodging prices rose by 3.1 percentage points due to Swift’s three shows, resulting in an 8.1 percentage point increase in occupancy and a 59% surge in hotel revenue per available room. As a result, the consumer price index for Chicago increased by 0.5 percentage points solely due to the singer’s visit. It is worth noting, however, that these local improvements may not be reflected in national-level statistics in larger economies such as the U.S., U.K., or Japan.

Potential Macro Boosts

Toh suggests that small economies like Singapore and Sweden could see the most significant macroeconomic boosts from Swift’s tour. “In recent years, concert tours have grown to become not just major social phenomena but also potentially significant drivers of economic activity,” Toh noted.

Overall, while the economic impact of Taylor Swift’s Eras Tour on local economies is undeniably positive, Nomura’s report raises questions about its national-level significance. Nevertheless, these events remain noteworthy as potential economic catalysts in countries around the globe.

Business Today