Taylor Swift performs on stage at Lumen Field in Seattle on July 22, 2023.
Mat Hayward/tas23 | Getty Images Entertainment | Getty Images
The devil is in the details, but the local economy has a friend in Taylor Swift.
The American pop star has spent almost a year traveling the US and the globe on her high-profile Eras Tour. The economic impact of the “Karma” singer’s show has caught the attention of everyone from the Federal Reserve to Wall Street.
According to a new report from Japanese investment bank Nomura, her tour undoubtedly helped the local industries she visited. However, the company questions what impact it had on the national data.
“Their increase in consumption has certainly charmed U.S. economic analysts, but we believe the overall macroeconomic effect is likely overstated,” Si Ying Toh, global economist at Nomura, wrote to clients last week.
Nomura estimates that Swift’s move increased nominal U.S. retail sales by 0.03% and real gross domestic product, a measure of economic performance, by 0.02% between the first and third quarters of 2023 alone.
According to the company’s calculations, the 14-time Grammy winner’s tour accounted for 0.5% of nominal consumption growth in all of 2023.
Although these data points may be viewed as marginal, Toh said the economic recovery – which some are calling a “swift lift” – was “undeniable” for the 20 U.S. cities she visited.
According to STR data cited by Toh, stops on the Eras Tour saw a 2.1 percentage point increase in nightly rates in the month of Swift’s visit. Data from hotel booking platform Trivago shows a similar increase, she added.
Looking at Chicago, Toh estimated that nightly rates rose 3.1 percentage points due to Swift’s three shows there. The city, which is the third-largest city in the U.S., saw an 8.1 percentage point increase in occupancy and a 59% increase in hotel revenue per available room during Swift’s tenure.
As a result, the consumer price index for the city of Illinois increased by 0.5 percentage points just because of the singer’s visit. The CPI is the measure of a basket of goods and services used to calculate changes in costs over time.
These local improvements are less likely to be reflected in the national statistics of larger economies such as the United States, Britain or Japan, Toh said. Still, these events are worth keeping an eye on as potential economic catalysts in countries around the globe, she said.
Internationally, Toh said small economies such as Singapore and Sweden could see the biggest macroeconomic stimulus from their tour.
“Exogenous shocks play a key role in economic modeling, whether in the form of an extreme weather event, a pandemic or… a pop concert,” Toh wrote to clients. “In recent years, concert tours have not only developed into major social phenomena, but also potentially into a significant economic driver.”
Swift’s tour is scheduled to end towards the end of 2024. The film version, which has already grossed more than $200 million worldwide from a theatrical release, will begin streaming on Disney+ on March 15.
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2024-02-23 18:00:11
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