- Arts, Entertainment & Recreation
- Economic & Fiscal Impact Analysis
Chances are good that you’ve heard of Taylor Swift’s record-breaking Eras Tour, which started in May and is slated for 52 shows across 20 major cities within the US (plus an ever-expanding number of international shows). The tour has been making major headlines from the start, when it notoriously “broke” Ticketmaster, leaving even the United States Senate wondering how to get a ticket.
With the US tour well underway, concertgoers are fueling what is being called the “Taylor Swift Economy” as fans spend massive amounts of money on the experience. In ticket sales alone, Billboard estimates that the Eras Tour will generate $590 million in sales within the US.
Meanwhile, a recent national survey of Eras concertgoers found the average attendee spent over $1,300 to attend – including expenses like tickets, outfits, merch, travel, and food/drink – almost double the amount fans had originally budgeted for the event.
If this pace of spending continues, the US leg of the Eras Tour will generate an estimated $4.6 billion in total consumer spending. To help put this in perspective, “If Taylor Swift were an economy, she’d be bigger than 50 countries,” said the President of QuestionPro Research and Insights, Dan Fleetwood, in a recent Globe Newswire report.
Since the tour began, cities have been cashing in on the economic activity that is sweeping the nation. In Glendale, AZ, where the tour made its first stop, the city issued a proclamation that it would be temporarily renamed Swift City while the singer was in town. More than 150,000 fans attended those first shows in Swift City, more than double the number of fans that visited the city for the Super Bowl a month prior.
In Houston, Swift sold out three nights at the 72,220-seat NRG Stadium, drove occupancy at hotels higher than during the NCAA men’s basketball Final Four tournament held several weeks prior, and generated the highest hotel revenue in the city’s history.
Her Chicago dates resulted in record-breaking demand for hotel accommodations with an average of over 44,000 hotel rooms occupied each night, resulting in an unprecedented occupancy rate of 97%.
Cincinnati estimates Swift’s two-day visit in late June generated $48 million in concert sales and a total of $92 million in net new local spending. (Camoin Associates’ Senior Analyst Mara Klaunig was in attendance and reports that she had never seen so many people or sequins in her life.)Whether you’re a true blue “Swiftie” or an economic developer (or both), you might be asking the question: What are the economic and fiscal impacts of the Eras Tour? While the answer is complex and likely to vary from city to city, here are five key components to consider:
1. New Visitors
Out-of-region visitors, who may not have come to a city if not for the Eras Tour, generate net new economic impacts in terms of lodging, food and beverage sales, travel expenses, and miscellaneous spending. Anecdotal reports show that Taylor’s fans have traveled particularly long distances, with many traveling hundreds of miles to see shows.
Nearly half of the direct spending expected in Cincinnati as a result of the Eras Tour will come from new visitors, with out-of-towners each spending approximately $575 more on the event than local fans.
2. Off-Site Visitor Spending
While fans are spending upwards of $10 on bottled water and $20 on chicken tenders at the concert, they are also providing a dramatic influx of demand for goods and services in the local community before and after the concert, boosting demand for shopping, services, and other activities.
In Cincinnati, for example, concertgoers were expected to spike ticket sales for the Cincinnati Reds game that took place earlier in the day. Additionally, the Eras Tour is notably generating foot traffic at businesses that are less typically associated with tourism, from friendship bracelets studios to hair salons and spin classes. Other local niche clothing and accessories brands have reported a spike in sales as concertgoers put together their Eras outfits.
All things considered, it seems likely that the average Eras Tour visitor spends more than typical tourists do within the local economy.
3. Net New Employment
“Net New” jobs describe new jobs that would not exist if not for the event being evaluated. With the tour bringing tens of thousands of concertgoers into downtowns and stadium districts, there is an increased demand for workers both within the venue (security, concessions, janitors, maintenance, etc.) and offsite (hotels, restaurants, parking attendants, etc.).
For example, Cincinnati expected the Eras Tour would create 900 jobs. Nationwide, it’s driving a demand for flexible labor, with up to a 1,000% increase in demand for temporary workers by businesses near the stadiums.
It is important to note that while these events generate jobs within the local economy, the boost is likely to be very temporary during the length of the tour’s stay in the city. The multiplier effects associated with these new jobs will be much smaller than we might expect from the creation of longer-term job growth.
4. Tax Revenue
Economic activities often result in fiscal benefits due to tax revenues, which will vary heavily across cities depending on local tax codes. For instance, whether or not a city levies sales or lodging taxes will determine the total financial benefit it sees from the influx of visitors.
For example, Swift City (Glendale, AZ) levies a combined tax rate of 15.7% on all short-term and vacation rentals. Meanwhile, in Foxborough, MA, where Swift played at Gillette Stadium in May, visitors paid a 6% hotel room occupancy tax but no tax was collected on short-term rentals.
Overall, the economic benefits of the Eras Tour will have a major impact on federal, state, and local tax revenues, with tickets, food and beverage, lodging, and sales taxes each taking their cut.
5. The Costs
While the upside to hosting an Eras Tour stop is clear, the costs to the community must also be considered and planned for. Host cities will have to contend with a number of logistical issues and costly impacts, including vehicular and pedestrian traffic congestion, trash, and public safety.
If you’re interested in learning more about economic and fiscal impact analysis, and how Camoin Associates can help your community evaluate the impact of events, new developments, policy changes, and more, download our new Economic Impact Analysis white paper and check out some of our recent work.