Taylor-made: Economic trends from the Eras Tour
Swiftonomics’ is in full swing, inducing tourism and retail spending – and notable supply responses – against the backdrop of the cost of living crisis
Dear reader: It’s been a long time coming.
The Eras Tour dominated the news cycle in 2023 and now Taylor Swift is slowly lurching towards two of our favourite cities. The multi-award-winner will perform seven sold-out shows across Melbourne and Sydney, kicking off tomorrow night.
Call it what you want, but Swiftmania is no champagne problem: the Eras Tour is a recognised cultural and economic phenomenon, making global headlines, swaying airline behaviour, garnering mentions in major economic and government reporting, and even inspiring an academic Swiftposium here in Australia. Estimates suggest the tour generated close to $5 billion in consumer spending in the US during 2023.
With stops only in Melbourne and Sydney, Swifties are travelling from across the country for the concerts, with the tour inducing intrastate, interstate and international trips. Some neighbouring countries missed out altogether, with New Zealand and the Philippines key international source markets for the Australian tour. Drawcard events such as the Eras Tour are playing an important role in the continuing tourism recovery of our major cities with their electric touch – major airlines report putting on additional capacity for the concerts, while hotel occupancy is notably higher over the concert weekends.
Based on the trips induced by the tour, internal modelling by Deloitte Access Economics suggests the Eras Tour is expected to generate $346 million in spending, including approximately $126 million on 620,000 concert tickets and $220 million in visitor expenditure (includes accommodation, food and drinks and airfares).
Beyond typical trip expenditure, however, the Eras Tour is anticipated to induce significant additional spending on fashion, merchandise and crafting goods and services. Australians have taken up the call to ‘make the friendship bracelets’, with a marked uptick in demand for beads, reflected by the spike in searches for ‘friendship bracelets’ in 2024.
For many, a custom outfit in true Swift Style is an essential part of the Eras experience. Many will be donning outfits specifically acquired for the Eras Tour, with 82% of concertgoers polled indicating at least part of their outfit has been purchased or made specifically for the concert. While this indicates a sales spike for Eras-themed outfits, much of this expenditure will flow offshore, especially for online retailers, with 50% having bought their outfit entirely online from traditional or fast-fashion suppliers. This makes the economic proposition delicate.
Figure 1: The Eras Tour in Australia in numbers
Source: Deloitte Access Economics (2024), using Tourism Research Australia, Google Trends, MCG, Accor Stadium, ABC News, NZ Herald, The Guardian, and survey data.
The cost-of-living crisis clearly hits different when it comes to Taylor Swift. In this context, why is spending on the event still so strong? Academics cite the connection between Swift and her fans as a key driver of willingness to spend, with the star building relationships with fans over 17 years through her lyrics, Easter Eggs, and online engagement.
Earlier this month, the RBA Governor Michelle Bullock was asked about the potential impact of Eras on service price inflation. Bullock emphasised that monetary policy does not directly impact services inflation and stated that many Swifties have foregone other purchases to afford the Eras experience: "People are deciding what's really important to them and what's not ... clearly for a lot of people, Taylor Swift is very important".
Despite the cost in these trying times, many Swifties would do it over and over and over again if they could.
Long story short, we know all too well that Taylor’s tour will dominate headlines and cause a gold rush in consumer spending for a subset of Aussies over the coming weeks. The only question…? that remains is … Are you ready for it?
This newsletter was distributed on 13th February 2024. For any questions/comments on this week's newsletter, please contact our authors:
This blog was co-authored by Adele Labine-Romain, Partner, Laura Bills, Manager, Rhiain Powell, Graduate Economist at Deloitte Access Economics.
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