‘Tourflation’: The impact of superstar tours on local economies

Taylor Swift is bringing her Eras tour to the UK. We know that’s not exactly financial news — although it does have financial consequences. In this article, we explore the good, the bad and the ugly effects of superstars’ mega tours on local economies.

Welcome to the ‘Swift Economy’

Taylor Swift’s Eras tour is touted to be one of the biggest ever, with 131 shows scheduled across the world. Swifty fever is currently spreading around the US, with her North American leg of the tour taking place from March to August 2023.

Now, according to Fortune, a data report from QuestionPro suggests that The Eras Tour has the potential to generate an incredible $4.6 billion (around £3.6 billion) in consumer spending in the US alone. 

The same QuestionPro report found that Swifties were spending an average of $1,300 (£1,000) just to head to The Eras Tour. Fans are sparing no expense to live out their Tay Tay dreams, splurging on clothing, hotels, travel and meals as well as the concert ticket itself to experience this ‘once-in-a-lifetime’ event. 

It’s not just Taylor Swift who’s causing economic waves. Swift’s pal, Ed Sheeran, had a similar impact on Ipswich’s economy back in 2019 when he played four gigs in the summer. These events reportedly boosted the local economy by an astonishing £9 million! 

Taylor Swift could be in her ‘recession-beating’ era

The US superstar is also bringing Swift-mania to Australia, performing five shows across Melbourne and Sydney in February 2024. Now, it’s being reported that the tour could come at a pivotal time, providing a much-needed boost to the economy.

According to the economist James McIntyre, fans could help boost gross domestic product (GDP) with the potential for an uptick in spending on hotels and travel in the first quarter of 2024. 

However, whether Swift is capable of preventing a recession remains to be seen. Australia is reportedly already on the brink of a recession, so Taylor could be too late to save the day. Only time will tell.

💡Gross Domestic Product (GDP) measures if and how much the economy is growing. It measures the total value of all of the goods made and services provided during a specific period of time. If the GDP figure is higher than it was in the previous month — the economy is growing.

Is consumer spending good or bad?

Consumer spending is a critical driver for the economy, as it directly impacts a country’s GDP (learn more below). However, too much consumer spending could have a negative effect by driving up inflation. 

For example, in the UK, the Bank of England is hiking interest rates in an attempt to increase saving and reduce spending. By discouraging spending, the Bank hopes to prevent businesses from raising their prices so quickly.

In essence, consumer spending is good most of the time, but too much at the wrong time can have negative effects, like the ‘Beyflation’ effect in Sweden.

‘Beyflation’: Did Beyoncé really fuel inflation in Sweden?

In May 2023, Beyoncé brought her long-awaited Renaissance tour to Sweden. The Stockholm concerts, where Beyoncé played to a crowd of 46,000 for two nights, reportedly attracted fans (or the ‘Beyhive’) from all over the world. The resulting frenzy of demand for hotels and restaurant meals has now shown up in the country’s economic statistics.

Sweden reported higher-than-expected inflation of 9.7% in May. According to Michael Grahn, chief economist in Sweden for Denmark’s Danske Bank, Beyoncé inadvertently helped drive a jump in hotel rates, which impacted inflation. Grahn explained to the BBC that while he wouldn’t blame the superstar for the high inflation point, she did ‘add a little to it’. 

💡Inflation is the rate at which prices for goods and services rise. You can learn more about inflation and what it means for you here.

Price-gouging: the costly reality for fans

Unfortunately, while big-name tours have the potential to bring in more money for local economies and businesses, on an individual level, people are being charged extortionate rates to see their favourite acts perform.

In Ireland, hotels were accused of rampant price-gouging. TD, Thomas Pringle, told the Irish Parliament (the Dáil) in June 2023 that the cheapest hotel he could find in Dublin for the Taylor Swift concerts next year was €350 (£302) a night. Others reported that some hotels were charging as much as €999. Similarly, hotel costs rose by up to 112% when Harry Styles toured in London in 2023, according to the latest study by personal insolvency provider, Creditfix.

There’s also been growing criticism of ticket resellers. For example, MP Kevin Brennan called for action against Taylor Swift ticket resellers after spotting one for £3,352 just one hour after the tickets originally went on sale in the UK. 

Costs to include in your concert budget 

If you’re planning on going to a concert soon, one of the best things you can do is plan ahead so you don’t overspend. Here are three items you need to think about when saving up for the event:

• Ticket prices: In the rush and excitement of an online sale, it can be tempting to buy the first ticket you can get your hands on. Avoid overspending by setting a limit and asking yourself how much you can afford to spend, bearing in mind other related costs.
• Accommodation: Will you be staying overnight? Remember that hotels nearer the venue will be more expensive, and rooms will sell out quicker. Before buying tickets, consider if this is something you can afford.
• Travel: Trains, planes or automobiles; whichever way you decide to travel, make sure you include it in your budget. 

How to save up for concert tickets 

Saving up money for a concert can be hard, especially during a cost of living crisis. Plum can help you set cash aside simply without leaving yourself short for life’s necessities.

By activating rules like PayDays and Round-ups, you can stash cash away without even noticing. Plus, our Interest Pockets* ensure you’re making a return on your savings to help you reach your concert goal even quicker.

The app is easy to use, and it’s free to set up an account and get started on your savings journey!

*Interest Pockets are provided by Investec Bank Plc. Terms & Conditions apply.

The information contained in this article is for general informational purposes only and is not intended to constitute financial, investment, tax or any other advice or recommendation. The information provided should be used at your own risk, and it is your responsibility to evaluate the accuracy, reliability, timeliness and completeness of any information provided herein or available on a linked website.