Last year, before Taylor Swift set off on her highly anticipated Eras Tour in March, experts predicted it would boost the American economy by a staggering $4 billion.
However, according to a Japanese investment bank, Swift’s tour’s initial impact on the U.S. economy may have been exaggerated.
The Eras Tour
For the past year, Taylor Swift has been touring around the United States and beyond for the past year on her iconic Eras Tour.
Last year, QuestionPro, a research company, predicted the “Karma” singer’s tour could bring over $4.5 billion to the American economy, per Fortune.
Local Economies Set to Receive Influx of Cash
Swifties set to attend the concert were predicted to spend, on average, over $1,300 on the tour, which included travel, accommodation, tickets, and food.
While a multibillion dollar increase in consumer spending would have been a great addition to the recent economy, financial experts may have exaggerated the amount Americans would spend during the Eras Tour, according to Japanese investment bank Nomura, per CNBC.
Nomura Economist Uncertain of Earlier Claims
Si Ying Toh, a global economist at Nomura, recently wrote to several clients suggesting the initial financial expectations of Swift’s tour were over-exaggerated.
“Her boost to consumption has certainly enchanted U.S. economic analysts, but we believe the total macroeconomic effect is probably overstated,” he said.
Nomura Estimates on the Effects Swift’s Tour Had on the U.S. Economy
Financial experts at Nomura released estimations that surmise Swift’s Eras Tour increased U.S. retail sales by approximately 0.03% over 2023’s first to third quarters.
For the entirety of 2023, the Japanese investment bank estimated that Swifties who attended their favorite singer’s tour accounted for around 0.5% of nominal consumption growth.
Swift’s Concerts Have a Positive Effect on Local Economies
Toh alludes to the idea that the margins are smaller than first predicted.
However, he says the economic boost associated with the Eras Tour, often referred to as the “Swift-lift,” is “undeniable,” per CNBC.
Chicago Experience Significant Increase in Lodging
In the cities where the Eras Tour stopped, lodging inflation saw an average increase of around 2.1% due to Swifties.
In Chicago specifically, where Taylor had three shows, Toh mentions that it saw an increase of nearly 60% in hotel revenue during the period.
Swift’s Impact on Larger Economies
Toh admits that while it’s unlikely local improvements will be witnessed in the statistics of larger economies, including the U.K., U.S., or Japan, it’s still worthwhile observing the effects Swift’s tour has on entire economies as a whole.
According to the economist, smaller national economies such as Sweden and Singapore could potentially see the most significant macro boosts from the Eras Tour.
Unforeseen Shocks Play Key Role in Economic Modeling
Toh explains that several factors play a crucial role in economic modeling. In the modern era, this could be anything from an unforeseen weather event to a beloved pop star’s presence in a major city.
“Exogenous shocks play a key role in economic modeling, whether in the form of an extreme weather event, a pandemic, or a pop concert,” he said.
Concerts Become a Driver of Economic Activity
Writing to several clients, the economist said that concerts from many of the world’s most prominent stars now significantly drive local economies thanks to tour stops.
“In recent years, concert tours have grown to become not just major social phenomena but also potentially a significant driver of economic activity,” he said.
Taylor Swift Makes Millions per Show
While the experts likely overshot their estimates on how well the tour would do for local economies, Taylor Swift still made millions per show.
According to Bloomberg News, the pop star made over $10 million each night she performed during the Eras Tour.
Swifts Tour Comes to an End
The Eras Tour is set to end by late 2024. A movie version of the tour has already brought in over $200 million from theaters.
While experts may have originally over-exaggerated the effects it would have on the U.S. economy, it undoubtedly had a net positive effect on local economies around the world.
