Not only are Taylor Swift fans closely following her Eras Tour in Europe, but Philip Lane, Chief Economist at the European Central Bank (ECB), also noted the superstar’s impact on the economy. area.

At the event earlier this week, the interviewer asked about the risk that inflation in the services sector could increase as the region enters a busy summer with Euro 2024 in Germany and the Paris Olympics, Mr. Philip Lane added. : “You said all that and forgot to mention Taylor Swift”.

Swift will travel around Europe this summer, performing a total of 51 shows in 18 cities, attracting millions of “Swifties” (Taylor Swift fans) to spend on airfare, hotels, restaurants and merchandise. Souvenir.

High-end travel company Embark Beyond (New York) said last month’s stop in Paris attracted 5 times more luxury tourists from the US than expected for the Paris Olympics, even though most had already seen it. She performed in her hometown many times.

In London, research by Barclays bank said nearly 1.2 million fans will spend about 848 pounds (about 1,070 USD) each on tickets, travel expenses, accommodation and merchandise to see the show. , which is 12 times the amount the average person would spend on an average night out in the UK.

“When it comes to cultural icons like Taylor Swift – just like we saw with Elvis and Beatlemania in the ’50s and ’60s – fans have such a strong connection to the artist that they expect to spend heavily. stronger,” said Peter Brooks, behavioral expert at Barclays.

The influx of visitors to selected cities demonstrates a clear impact on the European hotel industry. During the Eras Tour, hotel prices in concert cities are expected to increase by an average of 44%, according to Lighthouse’s report.

Cities such as Liverpool, Warsaw and Stockholm will see hotel prices increase by more than 100% during this time. “Taylor Swift is not just a music icon, she is an economic driver,” Lighthouse CEO Sean Fitzpatrick stated.

Analysts are debating the “economic footprint” she left behind. Starting in March 2023 and lasting until December 2024, the Eras Tour earned a record of one billion USD last year alone. Every city Taylor Swift goes to helps businesses grow, from retail, food and beverage, to hospitality.

This superstar’s influence is so great that some experts even use the term “Swiftonomics” to refer to the phenomenon of financial impact she creates on the economy. It is estimated that the spending on tickets, merchandise and tourism that the tour could generate in North America alone is $4.6 billion.

American economists evaluate the Eras Tour as a “great economic achievement”. Meanwhile, central banks are right to consider her potential impact on inflation. On June 20, the Bank of England (BoE) kept interest rates unchanged at 5.25% even though inflation had dropped to the target level of 2% last month.

Before the BoE announced the decision, analysts predicted the agency would postpone interest rate cuts as Swift’s tour could change inflation figures. “Increasing hotel prices could cause inflation in the service sector to increase by 30 basis points, and general inflation to increase by 15 basis points,” said Lucas Krishan, strategist at TD Securities.

In Europe, central banks have or started cutting interest rates as inflation has slowed significantly over the past year. However, the demand the Eras Tour creates for hotel rooms and flights across the continent could push up prices, affecting each country’s inflation rate.

Central banks are very sensitive to small changes in data. If anything creates worries that inflation is not slowing as expected, they could delay cutting interest rates.

Last month, inflation in Portugal accelerated, partly due to a spike in hotel prices in Lisbon “due to a major cultural event”, according to the country’s statistics office. That is Swift’s concert in Lisbon on May 24 and 25.

TD Securities’ Krishan said that Swift’s return to performing in the UK in August could increase service inflation, especially because one of her tour dates could coincide with the date that the country’s statistics agency uses to record it. price data.

If hotel prices then increase similarly to when she performed in Liverpool this month, service inflation could increase by up to 0.3 percentage points. Higher-than-expected inflation in August could cause the BoE to postpone interest rate cuts in September.

However, some economists do not think Taylor Swift can leave an economic footprint in Europe. “Taylor Swift doesn’t have the ability to influence central bank policy. She also doesn’t have the ability to influence government policy,” said George Moran, an economist at Nomura.

He believes the tour can only have a significant impact on individual cities and certain industries. When tickets went on sale last summer, searches on Airbnb in host cities increased more than 300% above average. It is estimated that 8 shows in London will bring in 300 million pounds to the city.

“The impact will be more local than macro. Taylor Swift is clearly a huge phenomenon. The areas she goes to see a huge wave in the hospitality industry,” said Moran.

Even Professor of Economics Victor Matheson at Holy Cross University said that the view that the Eras Tour helps boost the local economy is “more perception than reality”. He said the majority of spending during this time will come from ticket and merchandise sales, most of which will go to tour operators, event staff and Taylor Swift. “When you spend money on concert tickets and merchandise, it doesn’t stay in the local economy, it goes out with the artist,” he argues.

In addition, hotel prices increase temporarily but can be seen as an unexpected revenue gain instead of contributing to long-term economic benefits. Locals attend the performances and many of them save for months for this musical party. That means they have to reduce spending before and after the event.

Phien An ( NYT, Euronews, Le Monde )