Top Line
Taylor Swift’s “Erased” tour hit Europe this week, and it’s more than just a cultural phenomenon — it’s also likely to shake up local economies as thousands of American fans fly into Europe.
Taylor Swift’s ERAS tour, which will take her to 18 European cities, could help boost the economies of the host cities. [+] Possibility of inflation.
Getty Images for TAS Copyright Management
Key Facts
The pop star’s 18-city European tour kicks off in Paris on Thursday and will include stops in Stockholm, Lisbon and Madrid, where he will play to crowds of about 42,000 each night, before wrapping up in London in August.
The Guardian reports that short-term rental prices and hotel rates have skyrocketed in cities on Swift’s tour dates ahead of her arrival.
In Paris, average luxury hotel rates are up 36 percent this week compared with the same period last year, coinciding with the Grammy winners’ four-day stay, according to Jacques Hezon, founder of luxury travel agency Embark Beyond.
In Stockholm, Swift’s next tour stop after Paris, her three concerts are expected to bring in more than $43.5 million (471.9 million Swedish kronor) for the city, the city’s chamber of commerce said in March.
Michael Grahn, chief economist at Danske Bank, told Forbes that the significant boost to Sweden’s national GDP could be due to an expected crowd of 150,000 to 200,000 people, a significant number compared to Stockholm’s population.
Natalia Rechmanova, chief economist at the MasterCard Economics Institute, suggested that Swift’s European tour will have an “even bigger economic impact” this summer compared to her U.S. tour last year, as stronger transport networks will make venues easier to access, increasing economic benefits across Europe.
“As in the United States, smaller cities like Liverpool and Lyon are likely to be more affected than larger ones like London and Paris,” Rechmanova added.
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Will Taylor Swift spark inflation across Europe?
Taylor Swift’s Hellas tour may have a “short-term but noticeable” impact on the economies of regional cities across Europe, including smaller cities like Lisbon, but it is “unlikely to have a significant inflationary effect on national economies,” said Brett House, a professor of economics at Columbia Business School. The tour’s economic impact is large “for a cultural event,” but small relative to the annual output and total demand of the markets it serves. “Any local price increases will likely be temporary,” House told Forbes. Noting that Beyoncé’s performance in Stockholm last year caused an extraordinary increase in hospitality prices, Grahn noted that if Taylor Swift’s tour were to spur local inflation, hotel, restaurant and ticket prices would have had to rise by even more. “It could, but it’s very hard to measure,” he told Forbes.
tangent
The inflationary impact of celebrity tours on local economies is not unprecedented. Take Beyoncé’s Renaissance World Tour, which took place in Sweden last May. Her two-night concert in Stockholm was packed with 46,000 fans, causing demand to soar for hotels and restaurants. And clearly, the star was ruling the world, or at least the country. Sweden’s inflation rate for the month was a higher-than-expected 9.7%, with higher accommodation and food and drink costs “probably” adding 0.2-0.3 percentage points to the increase. according to In an email to The Washington Post, Visit Stockholm, the city’s official tourism promotion agency, attributed the tourism boom to the “Beyoncé effect,” according to Grahn.
Main Background
Americans are especially attracted to Taylor Swift’s European tour for a few reasons, including significantly lower ticket prices (about 87% cheaper than in the U.S.). And, as House points out, a strong U.S. dollar is “likely to boost spending” among American concertgoers in Europe. According to travel-planning app TripIt, about 40% of Americans planning pop culture trips earlier this year aimed to attend Swift’s overseas shows, and many of them appear to have achieved their goal: Americans bought 20% of tickets for the Paris show, and in Stockholm, Americans made up 10,000 of the 120,000 people in attendance, according to the Associated Press.
News Peg
Fans not only go to concerts, but often extend their stays, boosting local economies with dining, hotel stays, shopping, and guided tours. “While everyone will agree that Taylor Swift is culturally influential, not everyone may understand the economic impact she has on the places she visits,” Rechmanova told Forbes. During the pop star’s U.S. Hellas tour last year, spending at restaurants within a 2.5-mile radius of concert venues increased 68% per day, while spending at hotels in the same area increased 47%, according to the Mastercard Economic Institute. A summer tour in Europe is expected to allow fans to combine concerts with vacations, “further boosting the economies of European cities,” Rechmanova wrote.
Important Quotes
For all the regular folks flying to Europe for summer vacation, “you literally have to treat a Taylor Swift show like the Olympics or the World Cup,” says Eric Hruvant, founder and CEO of New York-based concierge travel company CIRE Travel. “Taylor Swift has the same effect as a city-wide convention.”
Amazing facts
A Taylor Swift concert would not just entertain, it would likely surpass the Paris Olympics in economic impact. “For every booking for the Olympics, we get five bookings for Taylor Swift,” Ezon says. A Swift tour would appeal to a broader, younger audience and be less time-constrained than the Olympics, where most hotels require a minimum stay of seven to 14 nights. What’s more, the cost of arranging a three-day Taylor Swift weekend through Ezon’s agency, Embark, was nearly a quarter of the average cost of a seven-day Olympic trip, making it a more affordable option for many fans, Ezon says.
Forbes Rating
Taylor Swift’s net worth was estimated at about $1.1 billion as of Friday. The pop star became a billionaire in October, thanks in large part to her record-breaking “Eraser Tour” (the first tour in history to gross over $1 billion at the box office) and the release of her concert film in theaters in October.
Big numbers
$1.4 billion. That’s the amount the 34-year-old singer-songwriter is estimated to have made in ticket sales by the end of his world tour, setting a new record as the highest-grossing tour of all time and surpassing the $939 million that Elton John made in his multi-year farewell tour.
References
BloombergForbes Taylor Swift adds these songs to setlist for Paris leg of ERAS tour
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