Taylor Swift's Eras Tour Lands In Europe—Here's How It Could ...

10 days ago

Forbes

Topline

Taylor Swift's Eras tour landed in Europe this week and could be more than just a cultural phenomenon, potentially shaking up local economies—driven in part by thousands of American fans flying in.

Taylor Swift’s 18-city European leg of her Eras tour may spur economic uplift in host cities—with ... [+] the potential for inflation.

Getty Images for TAS Rights Management Key Facts

The pop star's 18-city European tour kicked off Thursday in Paris—attracting a crowd of around 42,000 each night—with stops including Stockholm, Lisbon, and Madrid, and concluding in London in August.

Cities across Swift’s tour itinerary are experiencing a spike in short-term rental prices and hotel accommodation rates, even ahead of her arrival, reported the Guardian.

In Paris, this week’s average room rates for luxury hotels shot up 36% from the same period last year, coinciding with the Grammy winner’s four-day stint, said Jack Ezon, founder of luxury travel agency Embark Beyond.

Stockholm, Swift’s next tour stop after Paris, anticipates her three concerts to inject more than $43.5 million (471.9 million Swedish Krona) into the city, said the city’s Chamber of Commerce in March.

The notable increase in Sweden's local GDP may be driven by an expected audience of 150,000 to 200,000—which is substantial relative to Stockholm's population, Michael Grahn, chief economist at Danske Bank, told Forbes.

Compared to last year's U.S. tour, Swift's European leg will bring “even greater economic impact” this summer, with robust transportation networks facilitating access to venues and enhancing economic benefits across Europe, suggested Natalia Lechmanova, chief economist at Mastercard Economics Institute.

“Similarly to the US, smaller cities like Liverpool or Lyon are likely to see a greater impact than major hubs like London or Paris,” Lechmanova added.

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Will Taylor Swift Spur Inflation Across Europe?

While Taylor Swift’s Eras Tour will likely have a “brief, but discernible” impact on local city economies across Europe—for example, in relatively smaller cities like Lisbon—it is “unlikely to have any major inflationary effect on national economies,” noted Brett House, an economics professor at Columbia Business School. The tour’s economic impact, although significant “for a cultural event,” remains minor compared to the annual output and aggregate demand of the market it enters. “Any local bump in prices is likely to be fleeting,” House told Forbes. In light of Beyoncé’s performance in Stockholm last year, which caused an unusual rise in hospitality sector prices, Grahn noted that hotel, restaurant and ticket prices need to have been hiked even more than that—if Taylor Swift’s tour were to drive regional inflation. “This might actually be the case, although it is very hard to gauge,” he told Forbes.

Tangent

The inflationary impact of celebrity tours on local economies is not unprecedented, as shown by Beyoncé's Renaissance world tour in Sweden last May. The two-night concert in Stockholm, which drew a full house of 46,000 fans, led to a surge in demand for hotels and restaurants. And clearly, the star ran the world—or at least a country. Sweden reported higher-than-expected inflation of 9.7% that month, to which the heightened prices of accommodation and dining “probably” added between 0.2 and 0.3 percentage points, according to Grahn. Visit Stockholm, the official tourism promotion agency of the city, attributed this boom in tourism to the "Beyoncé effect" in an email to the Washington Post.

Key Background

Americans are notably drawn to Taylor Swift's European tour for several compelling reasons, including the allure of significantly lower ticket prices—about 87% cheaper than in the U.S. The strong U.S. dollar is also “likely to boost spending” by American concertgoers in Europe, as noted by House. According to TripIt, a travel-organizing app, around 40% of Americans planning a pop-culture trip early this year aimed to attend Swift’s international shows, with many apparently succeeding in their goal: Americans purchased 20% of the tickets for her Paris shows, and in Stockholm, they represented 10,000 of the 120,000 attendees, as reported by The Associated Press.

News Peg

Beyond merely attending concerts, fans often extend their stays, fueling local economies through spending on dining, hotels, shopping, and guided tours. “Everyone can agree Taylor Swift is a cultural force to be reckoned with, but perhaps not everyone appreciates the economic impact she has on the places she visits,” Lechmanova told Forbes. During the pop star’s U.S. Eras Tour last year, spending at restaurants within a 2.5-mile radius of her concert stadium saw a 68% increase per day, while expenditures at hotels rose by 47% in the same area, according to Mastercard Economic Institute. The Summer tour in Europe allows fans to combine concerts with holidays, which is expected to “boost the economy of European cities further,” she wrote.

Crucial Quote

For all of our general clients flying to Europe for the summer vacation, “we literally have to treat the Taylor Swift show as if it's like the Olympics or the World Cup,” said Eric Hrubant, founder and CEO of a New York-based concierge travel agency CIRE Travel. “Taylor Swift has the same effect as a city-wide convention would have.”

Surprising Fact

Taylor Swift's concerts might not just entertain; they could potentially overshadow the Paris Olympics in terms of economic impact. “For every one Olympic booking we're doing, we've done five Taylor Swift bookings,” said Ezon. Swift’s tour appeals to a broader, younger audience and requires less of a time commitment than the Olympics—where most hotels have a seven to 14 night minimum. Additionally, the cost for a three-day Taylor Swift weekend through Ezon’s agency, Embark, is nearly four times less than the average cost for a seven-day Olympic trip, making it a more accessible option for many fans, according to Ezon.

Forbes Valuation

We estimate Taylor Swift’s net worth to be around $1.1 billion as of Friday. The pop star became a billionaire in October, in large part due to her record-breaking Eras Tour—the first tour in history to gross $1 billion—and its concert movie released in theaters in October.

Big Numbers

$1.4 billion. That’s how much the 34-year-old singer-songwriter’s world tour is estimated to gross in ticket sales by its conclusion, setting a new record as the most lucrative tour ever—and even eclipsing Elton John’s previous record of $939 million from his multiyear farewell tour.